Progress Halted on WAPA’s Wärtsilä Generator Installation Due to Financial Dispute

The latest endeavor to modernize the US Virgin Islands’ energy infrastructure has encountered a significant roadblock. The installation of the Water and Power Authority’s (WAPA) four new Wärtsilä generators, heralded as a cornerstone for bolstering energy efficiency and reducing operational costs, is currently at a standstill. During a recent Public Services Commission (PSC) meeting, a revelation by ex-officio PSC member Senator Carla Joseph unveiled that the project has been frozen for months due to a lingering contractual dispute.

PSC consultant Jim Madden elaborated to Senator Joseph that while the initial three units are operational, the subsequent four, which arrived on the island in 2021, have yet to be activated. He mentioned, “The next four, which have been on island since 2021, have not been put into operation.” Despite expectations for these units to become operational within the previous year, with a successful test of one unit in June 2023 hinting at completion by August, unresolved financial disagreements between WAPA and Wärtsilä have brought the project to a halt.

This impasse has not only affected the generator units but also the associated battery storage components, with no current timeline for their activation. Madden highlighted the lack of progress, stating, “Because of that, work on the units has stopped, work on the battery units has stopped, and they are not in service.” The standstill, which began in early January, leaves the future operational status of these units uncertain.

The ongoing dispute marks another chapter in the challenging relationship between WAPA and Wärtsilä. In 2021, Wärtsilä sued WAPA for breach of contract over a 2017 agreement to construct an LPG-fired reciprocating engine power plant at St. Thomas’s Randolph Harley Generating Complex. The lawsuit, filed in the District Court of the Virgin Islands, was settled in December 2021, yet the current disagreements underscore persistent challenges in executing essential infrastructure projects in the USVI.

The resolution of this dispute is eagerly anticipated, as the operationalization of these Wärtsilä units is crucial for advancing the US Virgin Islands towards a future of reliable, cost-effective, and efficient energy solutions.