PSC Sounds the Alarm on Utility Oversight, Assessment Disputes, and Rate Hikes Ahead

The Virgin Islands Public Services Commission is preparing to launch a series of high-stakes investigations into the territory’s public utilities — while warning lawmakers Monday that chronic mismanagement, outdated infrastructure and nonpayment of regulatory assessments are threatening the commission’s ability to carry out its duties.

Testifying before the Senate Committee on Government Operations, PSC Executive Director Sandra Setorie laid out a packed agenda for 2025 that includes full-scale rate reviews of the V.I. Water and Power Authority’s electric and water systems, along with local ferry franchises and both arms of the Waste Management Authority. The process is mandatory, Setorie said, and long overdue. “It is the statutory responsibility of the commission to undertake rate investigations of each of the regulated utilities at least once every five years,” she said, citing the V.I. Code.

For WAPA, a new electric system rate case will begin April 8, with the commission expected to appoint a hearing examiner. The last full rate investigation concluded in January 2020, and Setorie emphasized the urgency of the upcoming probe — especially with WAPA facing ballooning debts and questions about whether it is charging ratepayers enough to cover real costs. The process, she added, will incorporate the long-awaited final report from Ernst & Young, the turnaround firm hired last year to assess WAPA’s operations. That report is due March 29.

The PSC is also watching closely as WAPA receives more than $800 million in federal recovery grants — $660 million for St. Croix’s electrical system, $205 million for St. Thomas, and $30 million for a full rebuild of the territory’s metering infrastructure, she said. Setorie shared that those funds, along with the future of WAPA’s renewable energy commitments, will be evaluated as part of the new rate case. Solar generation on St. Croix is expected to reach 25 megawatts by April, she noted, with similar gains projected for St. Thomas by the end of the year.

But, the commission’s oversight responsibilities are being tested by an escalating assessment dispute with the very agencies it regulates. Setorie revealed that neither WAPA nor the Waste Management Authority has paid its annual regulatory fees to the PSC – contributions that fund the commission’s entire operating budget. “We should also acknowledge that the commission did not receive any of its annual assessment from WAPA in fiscal year 2024,” Setorie said. “WAPA simply asserts that it is too financially strained.”