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WAPA: Inspector General Advances Audit Amid Fitch Ratings’ Withdrawal

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The main office of the V.I. Water & Power Authority at Sunny Isle, St. Croix. Photo Credit: V.I. CONSORTIUM

In a decisive move towards transparency and accountability, the Office of the Inspector General, following discussions with Senator Kenneth Gittens, has initiated a comprehensive audit of the V.I. Water & Power Authority (WAPA). This critical examination, a directive of Act 8731, will scrutinize several pivotal aspects of WAPA’s operations. The focus areas include the VITOL propane contract, the intricacies of the electronic metering system, the terms of various leases, the transfer of WAPA equipment to the British Virgin Islands, and the troubling loss of over $2 million to an offshore account.

Senator Gittens, voicing significant concerns, underscored the importance of this audit: “Without a thorough understanding and accountability for what transpired, how can we safeguard WAPA from repeating these errors?” His statement highlights the necessity of this audit in providing a detailed insight into WAPA’s internal mechanisms and in ensuring accountability for previous decisions and actions.

Inspector General Delia Thomas has acknowledged a minor delay in the one-year timeline mandated by the Legislature for this audit. Initially vetoed by Governor Albert A. Bryan, Act 8731 was later enacted following an override by the Senators on June 14, 2023, thus mandating the start of the audit.

The Importance of the Audit in Light of Fitch Ratings’ Withdrawal

The imperative nature of this audit is further accentuated by the recent decision of Fitch Ratings to withdraw most of its ratings for WAPA’s bonds. This withdrawal, attributed to a lack of sufficient financial information and ongoing concerns about transparency, underscores the need for meticulous scrutiny. Fitch Ratings, a renowned credit rating agency, has ceased providing ratings for WAPA primarily due to the utility’s limited transparency and the non-availability of audited financial statements.

Highlighting the essential role of WAPA in the everyday lives of the territory’s residents, Senator Gittens called for genuine accountability and improved governance within the utility. He pointed to a persistent pattern of mismanagement that must be resolved for the utility’s prosperity and the overall well-being of the territory. This audit represents a significant step towards rectifying past issues and setting a course for a more accountable and transparent future for WAPA.

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WAPA

PSC Commissioner Calls for Hiring of Hearing Examiner Amid Concerns Over Water Safety in St. Croix

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During a recent meeting with representatives from the Water and Power Authority (WAPA), Public Services Commission (PSC) member David Hughes expressed significant concerns about the current state of water testing in St. Croix, following last year’s alarming discovery of elevated levels of lead and copper. Hughes pressed for immediate action, questioning the delay in hiring a hearing examiner—a role outlined on the PSC’s website as crucial for overseeing utility compliance with regulations.

Hughes emphasized that the role of the hearing examiner is to work closely with utilities to ensure they meet the commission’s standards, particularly in regular testing to safeguard public health. “The PSC should be actively ensuring that WAPA maintains a consistent testing program that we can trust on behalf of consumers,” he stated.

The dialogue grew tense when Hughes criticized the commission’s efforts, responding to PSC Executive Director Sandra Setorie’s assurances that progress was being made with, “We as a Commission are not fulfilling our obligations.” He pointed to WAPA’s reactive measures—conducting 65 water tests in response to complaints about water discoloration—as insufficient and indicative of a need for a robust, ongoing testing program.

WAPA’s Director of Water Distribution for St. Croix, Don Gregoire, defended their practices, stating that the water is tested daily in their own laboratory, following EPA guidelines which now mandate biannual testing. However, Hughes countered that without full transparency and understanding of the testing procedures, the commission could not confidently endorse the program.

The urgency for better oversight was further highlighted by a lawsuit alleging serious deficiencies at the St. Croix laboratory, including outdated certifications and improper sample collection. These revelations support Hughes’s argument for enhanced oversight to ensure WAPA’s accountability and transparency.

Hughes also pointed out a broader issue of information deficit and lack of transparency from WAPA, underscoring the PSC’s duty to keep the public informed. “We’re not doing our job in regulatory oversight,” he lamented.

In a positive note, WAPA Chief Operating Officer for Water, Noel Hodge, announced a substantial FEMA grant aimed at overhauling St. Croix’s water infrastructure over the next two decades, with a detailed capital improvement plan underway and initial construction expected to start within three years.

Hughes’s call for the appointment of a hearing examiner underscores a critical need for PSC to enhance its regulatory role and ensure that such public health emergencies do not recur, reflecting a commitment to uphold safety and transparency in public utilities.

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Nearly All Impacted by WAPA Billing Error Receive Refunds

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The Virgin Islands Water and Power Authority (WAPA) has resolved a billing error that inadvertently affected around 3,000 customers due to a glitch during system testing. The mishap occurred on Monday evening when, during a routine trial in their billing system’s test environment, unintended charges were mistakenly applied to customer accounts.

WAPA acted promptly to address the error, successfully reversing the incorrect charges for all affected accounts except two. Customers who were impacted should see a reversal transaction on their account statements, which will display as a negative amount reflecting the refund.

The utility also clarified that for those customers whose charges are still showing as pending on their bank statements, these will automatically be removed without any action needed from the customer. WAPA stressed that these pending charges will simply disappear, and the customer’s balance will adjust accordingly.

WAPA expressed regret over the confusion and inconvenience caused by the glitch. They are currently making efforts to ensure all remaining issues are swiftly corrected to prevent future occurrences.

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Rotational Power Outages Scheduled in USVI Due to Weather and Equipment Challenges

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The Virgin Islands Water and Power Authority (WAPA) has scheduled rotational power outages across the St. Thomas/St. John and St. Croix districts. This decision stems from challenging marine weather conditions and malfunctioning generation units. The authority views these outages as a strategic approach to circumvent more extensive power disruptions and to keep electricity flowing in critical areas.

Ashley Bryan, WAPA’s Chief Operation Officer, emphasized the necessity of these outages. “While we recognize the disruptions our decision may cause, these measures are crucial to prevent broader outages and ensure ongoing electrical service over the weekend,” Bryan stated. She further highlighted the efforts to balance the impact of short-term outages on fewer customers against the risk of more widespread blackouts.

Specifically, in the St. Thomas/St. John district, the combination of adverse weather and a dwindling fuel supply raises the potential for widespread power failure. To counter this threat, WAPA plans to initiate rotational outages from late Friday or early Saturday, continuing through Sunday, prioritizing electricity for essential services.

In St. Croix, the problem is compounded by several offline generation units, which will lead to reduced power output from the Estate Richmond Power Plant beginning Saturday. To manage this, the authority will implement outages during peak times—noon to 1:00 p.m. and 4:00 p.m. to 7:00 p.m.—until further notice. WAPA is calling on all residents and businesses to conserve energy, which is vital for stabilizing the grid and ensuring functional feeders.

WAPA is actively working on these challenges to reduce the frequency and duration of disruptions and extends its apologies for any inconvenience these necessary measures may cause.

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