The V.I. Water and Power Authority (WAPA) has successfully repaired Feeder 13, resolving issues from a damaged underground cable. This extensive repair effort, completed last Friday evening, has brought relief to numerous customers in the St. Thomas-St. John district.

Despite this progress, challenges remain as Unit 23 is still offline, necessitating ongoing rotational power outages. These outages affect various feeders, contributing to the region’s power instability.

The Feeder 13 repair involved WAPA’s line department, transmission, and distribution teams, along with contractors Haugland VI and F&R Electric. They conducted a meticulous inspection and testing of the approximately five-mile-long cable, including a two-mile underground segment with 29 manholes. This process was essential to pinpoint the fault location and execute necessary repairs, according to a WAPA release.

The repair process faced challenges, particularly heavy rainfall last week, which required pumping water from manholes and prolonged the preparatory phase. WAPA utilized a fault indicator system to narrow down potential causes and streamline the repair process.

“We sincerely understand the major inconvenience this situation caused and assure you that crews were committed to quickly and safely restoring power,” stated WAPA.

Concurrently, WAPA faced additional challenges as Unit 23 at the power plant went offline last week for testing, leading to unexpected rotational outages. Customers on Feeders 6A and 7A experienced intermittent two-hour service interruptions due to the reduced generation capacity.

As of Monday, WAPA reported that the Wartsila Phase 1 Unit 3 has completed regular maintenance and is back online, helping to alleviate the generation shortfall. However, an updated rotational outage schedule remains in effect for the St. Thomas-St. John district until Unit 23 is fully operational again. WAPA plant personnel are exploring two potential solutions to expedite the return of Unit 23, including acquiring a new Megawatt transducer.

The Public Finance Authority (PFA) has appointed Ernst & Young (E&Y) to manage the turnaround of the Water and Power Authority (WAPA). This decision emerged from an emergency PFA meeting on Wednesday, where the board unanimously agreed to E&Y’s proposal following an executive session reviewing four bids.

Lorelei Farrington, PFA’s staff counsel, detailed that an evaluation committee comprising PFA and WAPA representatives had meticulously reviewed the proposals earlier this year. The most expensive bid was discarded due to its significantly higher cost. The remaining proposals were assessed on project understanding, approach appropriateness, project plan effectiveness, and overall value.

“Based on the results of that evaluation, the committee recommends that a contract for the turnaround management services be awarded to Ernst & Young,” said Ms. Farrington. She highlighted E&Y’s extensive experience in addressing financial and operational distress and their broad capabilities in restructuring and turnaround practices.

E&Y’s existing relationship with WAPA positions them uniquely to provide further insights into the turnaround process. At an estimated cost of $450,000, E&Y’s proposal was the most economical among the bids, which ranged from $450,000 to $9 million.

The turnaround project is structured into three phases:

1. Phase One: An initial assessment of WAPA to be completed within 120 days, resulting in a report for the legislature and governor on the authority’s financial status. This phase includes data collection on WAPA’s programs and projects, energy plans, debt consolidation, water quality, and service improvement plans.
2. Phase Two: A 60-day period to submit a report detailing short-term measures to reduce the LEAC, recommendations for base rate reductions over 24 months, and strategies for incorporating renewable energy and reducing fossil fuel dependency over five years. It also involves organizational restructuring, debt management, and ensuring reliable water quality standards.
3. Phase Three: Implementation assistance for all recommendations from phase two.

Board member Dorothy Isaacs expressed skepticism about spending more funds on WAPA without guaranteed improvements but ultimately supported the contract as a “final last-ditch effort” to resolve ongoing issues. The board approved a contract extension to E&Y, not exceeding $500,000.

PFA board chair Governor Albert Bryan Jr. noted that legislative mandates necessitated this move. Despite initially vetoing the legislation, which was later overridden, Governor Bryan now views this initiative as a positive step. “In retrospect, I think it will be a valuable tool,” he stated, acknowledging the complexity and unknown challenges within WAPA that the report aims to clarify.

The governor also appreciated the legislature for pushing this directive, despite it being an unfunded mandate from the 35th Legislature.

Governor Albert Bryan on Tuesday outlined his administration’s plans to address the ongoing challenges faced by the V.I. Water and Power Authority (WAPA). His remarks, delivered during his weekly press briefing, came amidst a series of power outages and rolling blackouts that have disrupted daily life in the territory.

Governor Bryan began by acknowledging the hardships caused by the power disruptions. “I understand the significant disruption and hardship these events have caused for families, businesses, and essential services in our community,” he said, empathizing with the public’s frustration, which he has personally experienced over the years.

He emphasized the complexity of WAPA’s issues, which include financial, operational, and maintenance challenges. “This is a very complex situation that has presented some significant challenges,” he said. “But we remain committed to finding solutions, not just complaining.”

Governor Bryan reminded the public of the state of emergency declared weeks ago to ensure WAPA had the necessary resources to meet its financial obligations and maintain adequate power generation. He noted that this move saved St. Croix from the power rotations currently plaguing St. Thomas. The state of emergency, declared on April 22, has been extended to June 21.

Jennifer O’Neal, the Director of the Office of Management and Budget and the Incident Commander for the state of emergency, outlined several initiatives to improve WAPA’s operations and financial stability. These include the acquisition of the VITOL propane terminals, expected to retire a significant portion of WAPA’s debt and reduce fuel costs. Additionally, efforts are underway to restart the Wärtsilä project, which stalled due to contractual disputes.

Ms. O’Neal detailed other measures, such as ensuring Seven Seas is paid for water production and securing funding to onboard a management turnaround company mandated by the legislature. The Public Services Commission has concluded the procurement process for this company, with a contract expected within 30 days.

Further plans involve renegotiating a fuel transportation agreement with Vitol, fast-tracking an interconnection study for new renewable battery agreements, and advancing the Estate Petronilla solar site project. Delayed projects are costing WAPA’s ratepayers approximately $3 million each month in elevated costs.

Ms. O’Neal disclosed that court orders had frozen about $6 million in WAPA accounts, although one order has been quashed. WAPA’s attorneys are working to lift the freeze on the agency’s First Bank account.

WAPA is currently facing a monthly shortfall of approximately $2 million, with receivables totaling about $19 million and payables amounting to $21 million for critical vendors. Additional vendors have not been paid due to WAPA’s lack of liquid assets, partly because of high balances owed by some government agencies.

The administration cleared the bills of three delinquent agencies using over $10.2 million from the budget stabilization fund. This payment enabled WAPA to remit owed funds to Aggreko and Seven Seas, with a payment to Wärtsilä expected next. The Wärtsilä project, expected to restart within 30 days, will significantly improve reliability in the St. Thomas-St. John district and reduce fuel expenses across the territory.

Additionally, funding from the Department of Housing and Urban Development, expected in mid-July, will help WAPA address its debt to Vitol. A new LPG transportation rate with Vitol will save WAPA about $900,000 monthly.

Ms. O’Neal committed to daily incident command meetings to address WAPA’s preparation for the upcoming hurricane season and continuing summer heat.

Governor Bryan stressed the importance of transparency and communication from WAPA, urging the utility to keep the public informed about ongoing efforts and issues. “Get out there and tell the public. People are waiting for me to show up to tell them why there’s a power outage,” he said.

In closing, Governor Bryan reiterated the administration’s commitment to addressing WAPA’s challenges and finding long-term solutions. “There’s no private company coming to buy WAPA and all its troubles,” he said. “We must fix this problem ourselves.” He urged WAPA to expedite critical cost reduction and sustainable energy projects to alleviate the financial and power distribution pressures currently affecting the agency.