WAPA Board Authorizes Employment Offer to Prospective CFO and Releases 2019 Audit Financials

The Water and Power Authority generating plant on St. Croix. (Source file photo)

The Water and Power Authority Governing Board voted to authorize that an employment offer be made to a prospective Chief Financial Officer candidate and also approved the release of the fiscal year 2019 audited financial statement for the electric and water systems, in an emergency meeting Thursday.

The electrical system statements can be viewed here: WAPA FY 2019 Electrical System Audited Financial Statement. The water system statement can be viewed here: WAPA FY 2019 Water System Audited Financial Statement.

The meeting immediately went into an executive session where board members discussed both legal and personnel matters and voted to move forward with an offer to the prospective CFO. After 30 minutes, the board then ended the executive session and said that once negotiations were met an official statement will be made.

The board then dived into the unanimous approval of the 2019 audited financial statement for release. Chief Financial Officer Debra E. Gottlieb said that the authority is required to produce audited financials within 120 days of the closure of the fiscal year. “The audit is late, but we are working feverishly to get caught up with our audits and we are pleased to announce that we are ready to release the 2019 audited financials,” Gottlieb said.

The 2019 audit comprises two reports due to the electric generation and water production being separately financed and require separate accounting and reporting. According to the report, the authority provides electric service to more than 37,000 customers as of June 2019. This includes customers on St. Croix, St. Thomas, St. John, and Water Island. Water service was provided to 13,000 customers as of June 2019.

Some notable financial highlights for the electric system audit included:
– The net position increased by $268.9 million from a $47.9 million deficit as a result of fiscal year 2019 operations.
– Assets increased from $135.3 million to $154.3 million due to an increase in grants receivable of $43.2 million, prepayments of $3 million plus unbilled revenues, which grew by $8.8 million, offset by decreases in fuel oil and materials and supplies inventories of $6.9 million and decreases in derivative investments of $12.6 million.
– Fuel costs recoverable balance increased by $18.1 million to $28.7 million in 2019 as the Levelized Energy Adjustment Clause (LEAC) permitted by the Public Services Commission allows the authority to recover a significant amount of the cost of fuel during the year.

Other notable financial highlights for the water system audit included:
– The Water System’s Levelized Energy Adjustment Clause (LEAC) factors approved by the Public Services Commission were able to fully recover the cost of fuel in the current period leading to a fuel rate revenue refundable of $4.2 million in the current period.
– During 2019, the water system’s total operating revenues increased by $3.4 million.
– Operating and production expenses decreased by $0.2 million from $30.3 million to $30.1 million, compared to the prior year. This was due to an increase of $2.6 million in administrative and general expenses offset by an increase in production cost of water distributed and customer service cost of $2.4 million.

Board members in attendance included Chairman Anthony D. Thomas, Secretary Juanita Young, Cheryl Boynes Jackson, Directors Kyle Fleming and Joel Lee. Vice Chairman Jed JohnHope, Hubert Turnbull and Elizabeth Armstrong were absent.