WAPA on Brink of Financial Collapse as LEAC Remains Unchanged Amid Rising Costs, PSC Reveals

With no Water and Power Authority representative present at the Public Services Commission meeting on Tuesday, PSC General Counsel Boyd Sprehn began the discussion of WAPA’s financial crisis and the energy emergency with a summary of developments to date. Following a lengthy debate, commissioners voted to maintain the current LEAC rate despite the growing specter of ballooning excess fuel costs.

Mr. Sphrehn began by noting the settlement agreement with Warstila that the WAPA board approved last week. “That should result in Wartsila resuming work on the premises within the next two weeks,” he said. The additional generation capacity, combined with battery storage on St. Thomas due to come online “within the month” would “greatly increase WAPA’s reliability and its ability to meet customer demand,” Mr. Sphrehn told commissioners. When those Wartsila generators are converted to propane “some time between the end of September and the beginning of next year,” WAPA’s fuel costs are expected to drop by $2 million a month, savings critical to addressing the utility company’s severe cash flow deficit.

Despite recent emergency interventions by the executive branch, Mr. Sprehn said that WAPA’s cash position is so fragile that it is “in fact in great jeopardy of being unable to meet its commitments within this month.” He also noted the belated selection of Ernst & Young as the company to provide turnaround management services to WAPA.