Major infrastructure improvements will aid the U.S. Virgin Islands Water and Power Authority’s funds in the approaching months and years, officials said.
WAPA is under extreme financial pressure, in keeping with board members, and its electric system revenue bonds were rated CC, before Fitch Rankings withdrew the rating in December.
The Federal Emergency Management Agency approved funding the alternative of the authority’s often non-functional electric meters for residential and institutional customers, the board announced at its meeting Thursday. The agency has promised $138 million to cover the complete costs of replacing them.
Installation and operation of Wärtsilä generation, like this one received in 2021, will help WAPA lower its operating costs, a WAPA skilled said.
The authority had been operating a newly installed battery with a 9-megawatt capability in St. Thomas since Aug. 16, which has prevented outages by covering demand peaks, WAPA Director of Project Management Chavanté Marsh-Bultes told the board.
The brand new battery is a component of Phase II of what WAPA calls the Wärtsilä project, after the name of the provider of the battery and power generation units. Wärtsilä provided 4 units in the primary phase and is providing three more within the second phase.
The U.S. Housing and Urban Development Department is paying for the units.
The brand new units are expected to operate 95% of the time on propane and 5% on light fuel oil, which should save the utility money, since they’re cheaper than the diesel utilized by a lot of the prevailing units.
“The completion of the Wärtsilä phase II project may have a major impact on operational savings, putting us on a path to recovery and can greatly enhance energy reliability with the smaller, more efficient units,” said WAPA CEO Karl Knight. Marsh-Bultes said she expected the brand new units can be operating within the Robert Harley Power Plant in St. Thomas by December.
WAPA currently has a roughly $5 million monthly operating loss, Knight said.
WAPA plans two major power generation alternative projects in the subsequent few years, along with the Wärtsilä units, Interim Chief Operating Officer for Electricity Ashley Bryan said.
FEMA has agreed to completely fund the alternative of power generation units 14 and 15 on the Harley power plant. The units date to the Forties and Fifties. Unit 14 has not worked for several years and unit 15 has been unreliable and might’t be fueled with propane.
FEMA has also promised to pay for 50% of the fee for maintenance and repairs on Unit 23 on St. Thomas, Bryan said. Ultimately, St. Thomas will see an essentially all latest generation fleet, she said.
WAPA plans for the southern island of St. Croix is “much larger,” Bryan said. WAPA plans to exchange six electric generators, boilers and other features of the island’s Richmond Power Plant.
The authority is currently working on a fixed-cost and scope alignment, to find out the dimensions of and what the FEMA grant will cover.
Knight said he expected the upgrades to St. Thomas to be accomplished in a “much shorter time period” than the rebuild of the Richmond plant. WAPA also hopes to place in a battery in St. John.
The work in St. Thomas is predicted to cost about $130 million and the work in St. Croix is predicted to cost about $600 million, Bryan said, with FEMA grants covering nearly all of it.
“In the subsequent couple of years, it’ll be a really different WAPA with the support of the federal government, all of the grants they’ve provided to us,” Bryan said.
In other developments, the board approved a latest term sheet for the conversion of 2022 bond anticipation notes to 2024 BANs. The board also approved a one-year extension of a Banco Popular credit facility.