By Jaime Elliott
A Monday evening, June 2, Public Services Commission public hearing at the St. John Legislature drew only three residents who heard about the V.I. Water And Power Authority’s proposed base rate increases.
The three Love City residents’ opinions were the sole St. John voices heard by PSC officials conducting the rate investigations into the territory’s water and electric utility. The Monday meeting was the first of three planned public hearings; the PSC also hosted hearings on St. Thomas and St. Croix last week.
After working closely for weeks, PSC and WAPA officials hammered out an agreement to hike the average residential electric bill 5.7 percent, the average commercial eltrical bill 6.1 percent and the average water bill 12.7 percent.
PSC officials decided to combine the routine five-year investigation into WAPA’s electric rates with the first investigation into the authority’s water rates since 1994. After being raised 9.7 percent in 2003, the electric rates were actually decreased 5 percent in 2004.
Under the proposed agreement — which has not been accepted by PSC’s appointed hearing examiner Attorney Kathleen Mackay or voted on by the commission’s board of directors — the increases to WAPA’s electrical rates are based on an average residential customer consumption of 500 kilowatt hours each month.
With that scenario, the proposed base rate hike would increase an average person’s bill from $121.37 to $128.34, or about 5.7 percent.
The commercial electrical bill is based on an average usage of 1,200 kilowatt hours per month. After all costs are added, an average commercial bill would increase from $322.31 to $341.92, or about 6.1 percent, under the proposed agreement.
The average water consumption per person as determined by WAPA is 2,400 gallons per month with the first 1,000 at one rate and usage for additional 1,000 gallons and more at a different rate.
The proposed agreement would raise the first 1,000-gallon rate from $14.90 to $17.58, and after that from $16.90 to $19.64, per thousand gallons. That adds up to a 12.7 percent increase in an average person’s monthly water bill.
“We must balance the interest of the rate payer and the interest of the public,” said Attorney Boyd Sprehn, a PSC counsel. “WAPA must maintain independent water and electrical production. Many of the goals and objectives of both the PSC and WAPA were similar and it was possible for the parties to agree to an overall settlement.”
The agreement includes funds for WAPA to investigate alternative energy sources and move away from its dependence on oil, explained Sprehn.
WAPA is also mandated to complete a management assessment audit within 18 months and reduce line loss, according to the attorney.
The three residents who did attend the public hearing explained how high electric rates can drive people out of business.
“I feel this is a tremendous burden on the taxpayers and businesses,” said Albert Willis. “Last summer the price went as high as 50-cents a kilowatt hour when you added up all the charges. It almost put a lot of people out of business.”
“Over all these years, I haven’t seen the service you provide increase as our rates have increased,” Willis said. “There were so many lost opportunities and hopefully this time WAPA will take advantage of the opportunity to improve service.”
The proposed base rate increases are not related to the Levelized Energy Adjustment Clause (LEAC) which fluctuates according to the market price of crude oil and can drive up electric bills.
In order to lessen electric bills, WAPA must end or at least lessen its oil dependency, explained the authority’s executive director Hugo Hodge.
“To ward against high rates in the future, we have to get off our dependency on oil,” said Hodge. “Our goal is to create other sources of energy.”
WAPA is exploring constructing a reverse osmosis plant in the Coral Bay area to produce between 1,000 and 2,000 gallons a day to start water distribution on the eastern portion on St. John.
The authority has already received a grant for more than $900,000 for the project and expects to be approved for a second grant shortly, Hodge explained.
The WAPA executive director declined to comment on a potential site for the R/O plant in the Coral Bay area, but hoped to find an inexpensive parcel in order to use most of its funding for the actual construction of the plant, according to Hodge.