PSC Approves Temporary Base Rate Increase for WAPA

Generating Unit on St. Thomas (James Gardner photo)
Generating Unit on St. Thomas (James Gardner photo)

It’s not in effect yet, but if the V.I. Water and Power Authority meets certain criteria, it has the go-ahead from the Public Services Commission to enact a base rate increase that would cover the cost of new leased generating units, along with running a set of Wartsilia generators that are not currently covered by existing rates.

The commissioning and testing phase for the three new Wartsilia units are almost complete, WAPA announced a few days ago. The announcement was made after WAPA’s board voted to enter into an agreement with Warsilia Caribbean that would allow the company to oversee the maintenance and operations of the units over a three year period until the authority’s staff is able to take over, and WAPA has met a critical set of performance targets.

At Monday’s meeting on St. Thomas, the PSC determined that WAPA would have to certify that the units are in commercial operation on St. Thomas before the increase can be implemented, along with another set of units leased from Aggreko LLC on St. Croix. Finally, the authority would have to complete an official base rate application, PSC members said.

The temporary “leased generation surcharge” amounts to about 3.1-cents per kilowatt hour, which would be added to the existing base rate of 38.26-cents per kilowatt hour for the first 250 kilowatt hours, and 40.56-cents for each kilowatt hour after. Despite a bit of back and forth during Monday’s meeting, PSC members indicated that maintaining WAPA’s reliability and providing continuous electric service to customers is the top priority, and that the more fuel efficient leased units have the ability to lower future fuel costs.

Once WAPA meets the “preconditions,” however, any surcharge implemented can only last for six billing cycles, PSC members voted.

According to WAPA officials, testing for the Aggreko units on St. Croix began in March, and to round out capacity on St. Thomas, the authority is also looking at bringing on another four Warsilia generators, which its board has already approved.

Speaking to the Source in follow ups later this week, PSC officials said WAPA would have to provide its customers with a month’s notice before implementing the temporary surcharge.