The V.I. Water and Power Authority governing board approved a $367,050 increase to its contract with West Peak Energy Thursday — for a total of $4.719 million — for project management services related to the utility’s four newest Wartsila generators on St. Thomas.
Those engines arrived in the territory in 2021 but sat idle for years. The generators’ long-awaited commissioning was celebrated with a ribbon-cutting ceremony in January attended by WAPA leadership, government officials, Wartsila representatives and members of the media, who were treated to a tour of the Randolph Harley Power Plant on St. Thomas. WAPA Chief Executive Officer and Executive Director Karl Knight called the commissioning a “significant evolution” in power generation.
“On any given day,” he said, the generators would be able to run entirely on liquid petroleum gas or diesel. “And we can switch that on a dime.”
One month later, the V.I. Public Services Commission learned that three out of the four engines were offline, and the utility was waiting for Wärtsilä personnel to fix them.
WAPA Automations, Data Acquisition and Technical Support Director Vernon Alexander told the board Thursday that West Peak will “contribute to the overall success of the Wartsila Phase Two project by assisting internal staff with effectively managing risks, controlling costs, and ensuring that the project is executed according to the highest technical standard.”
Board member Maurice Muia acknowledged that the Wartsilas are being repaired under warranty but raised concerns about how the contract with West Peak was funded. Knight said the project was funded through a U.S. Housing and Urban Development Department grant, “and we have made a decision to use a portion of that allotment for the continued engagement with West Peak as we work through these issues with Wartsila.”
In response to follow-up questions from Muia, Knight said getting the expenditure refunded by HUD would amount to forfeiting that part of the grant.
“I’m just worried that once West Peak is closed out and they demobilize — what kind of situation we’re going to be in if this persists,” Muia said. “It’s not on us necessarily, but if this persists, this is going to be challenging for us, because then it would have to come from rates.”
The board next approved a six-month, $96 million fuel supply contract with energy supplier Vitol.
“I think — as everybody is well aware — propane remains the most cost-effective fuel utilized by the authority currently,” said WAPA general counsel Dionne Sinclair, who added that the authority is in the process of issuing a request for proposals to secure a long-term supply of LPG. “We’re extending the contract with Vitol just to give us time in which to complete that process and get the data we need in order to make informed decisions.”
Knight said the temporary extension will give WAPA “enough time to test that market, select a vendor, make sure that vendor has the logistics in place and can begin supplying this.”
