GOVERNMENT OF THE VIRGIN ISLANDS

PUBLIC SERVICES COMMISSION



IN THE MATTER OF THE



LEVELIZED ADJUSTMENT CLAUSE OF PSC DOCKET NO. 289

THE VIRGIN ISLANDS WATER AND POWER



AUTHORITY Order No. 68/2018



ORDER



WHEREAS, the Commission approved the purchase of three Wartsila generators in

January 2017 (Interim Rate Agreement) which will burn less costly propane; and



WHEREAS, on June 29, 2018, the Virgin Islands Public Services Commission

(hereinafter “PSC” or “Commission” held a special meeting at its office located at No. 1003 Estate

Ross, Suite 4, Barbel Plaza on the island of St. Thomas, United Virgin Islands and via

teleconference at the Port Authority conference room located at the Henry E. Rohlsen Airport on

the island of St. Croix, United Virgin Islands; and



WHEREAS, at the June 29, 2018 meeting the Commission ordered that:



1. For all future LEAC applications for periods beginning January 1, 2019, WAPA shall

submit its application for fuel costs recovery to reflect the projection that Wartsila units

approved by the Commission in the 4th quarter are dispatched as the initial and primary

sources of electric power base load generation in the St. Thomas/St. John district of the

U.S. Virgin Islands without respect to further delays in their availability (PSC Order No.

39/2018).



WHEREAS, at the meeting, the PSC expressed its dissatisfaction with the continued

delays in bringing more efficient propane gas-burning units online; and



WHEREAS, the Commission’s consultants Georgetown Consulting Group (“GCG”)

previously testified that the increased fuel costs on its own is not the cause of the increased

Levelized Energy Adjustment Clause (hereinafter “LEAC’’) rate; GCG further testified that not

utilizing the Wartsila units is a significant factor in the high fuel expense; and



WHEREAS, on July 27, 2018, WAPA filed a Petition for Reconsideration of both Orders

37/2018 and 39/2018', asking that the PSC reconsider and vacate its orders because: (1) the orders



were made at a meeting when the issue was not on the agenda and thus no notice or a meaningful

opportunity to be heard on the motion was provided to the Authority in violation of its statutory

due process rights; (2) No. 2 fuel oil is required for certain prudent utility operations such as the

start-up and shut-down of WAPA’s converted gas turbines on both St. Thomas and St. Croix; (3)



' This order will only discuss WAPA Petition for Reconsideration as it pertains to PSC Order No. 39/2018.