💧 Water and Power · U.S. Virgin Islands
WAPA scheduled emergency board meeting on June 26, 2022 to seek approval for Unit 27 purchase
Official document: https://www.viwapa.vi/docs/default-source/news-(docs)/wapa-governing-board-emergency-meeting-scheduled-for-june-26-2022.pdf?sfvrsn=855298b9_2
The Virgin Islands Water and Power Authority said it scheduled an emergency meeting of its governing board for 10 a.m. Atlantic Standard Time on June 26, 2022, to seek approval to buy Unit 27 at the Randolph Harley Power Plant from GE.
WAPA said GE's lease for the unit ended on June 23, 2022, and the two sides reached an agreement on June 24, 2022, after several months of negotiations. According to WAPA, GE had made Unit 27 unavailable pending the close of the transaction, which the authority had expected to present for approval at its regular June 30, 2022 board meeting.
WAPA said it had been operating Unit 23 while Unit 27 was unavailable, but Unit 23 went out of service late on June 24, 2022. That left the Randolph Harley plant unable to produce enough electricity for the St. Thomas-St. John district without either Unit 27 or Unit 23, resulting in rotational outages, according to the authority.
The authority said it then reached an agreement with GE to return Unit 27 to service immediately. In exchange, WAPA said it agreed to expedite board approval of the acquisition and to make one week of lease payments at the current rate, about $145,000, until the transaction closed.
WAPA said Unit 27 had operated for several years under a lease with GE and was its most efficient generating unit after the three Wartsila reciprocating engines in service at the plant. The authority said it had been leasing the unit for $631,053 a month, or $7.57 million a year.
According to WAPA, it owed GE about $5.4 million in past-due lease payments, and the lease also included a buyout option of about $5.2 million at the end of the term. The authority said it negotiated a $6.75 million purchase price that would resolve all outstanding claims or obligations to GE and transfer ownership of the unit to WAPA.
The meeting agenda listed a single action item: acquisition of Unit 27 at the Randolph Harley Power Plant.