GOVERNMENT OF THE VIRGIN ISLANDS

PUBLIC SERVICES COMMISSION



IN THE MATTER OF THE VIRGIN ISLANDS

WATER AND POWER AUTHORITY’S PETITION PSC Docket No. 676

FOR APPROVAL OF THE TEMPORARY

HURRICANE RECOVERY SURCHARGE AND PSC Order No. 18/2020

LEASED GENERATION SURCHARGE



ORDER



WHEREAS, on December 27, 2018, the Virgin Islands Water and Power Authority

(“Authority” or “WAPA”) filed a Petition for Approval of a Leased Generation Surcharge in the

amount of $0.030842/kWh beginning on or after January 1, 2019 and continuing for such time

until a permanent base rate is completed; and



WHEREAS, the Authority stated that it is in need of the Leased Generation Surcharge to

cover its leased payments for St. Thomas generating units 26 and 27 and the temporary St. Croix

generating units (“Aggrekos” or “Aggreko Units”); and



WHEREAS, on March 20, 2019, the day after the Commission meeting, the Authority

submitted a “Renewed Petition for Temporary Base Rate Relief,” seeking only the previously

requested "Leased Generation Surcharge"; and



WHEREAS, at the Commission’s meeting on April 15, 2019, the Commission received

testimony and reports from the Authority and the Commission’s Staff: and



WHEREAS, at the April 15, 2019 meeting the Commission now found that:



a. at this time the use of Leased Generation is critical to keeping the electrical system of

WAPA reliable and providing continuous electric service to all consumers;



b. the use of Leased Generation is more fuel efficient than WAPA’s owned generation

and has the capability of reducing fuel costs substantially if properly utilized;



c. for these reasons, the Commission has encouraged the use of Leased Generation

pending the implementation of the recommendations of the Management Audit and the

Integrated Resource Plan for the replacement of WAPA’s current generation with new

and more efficient generation, as well as compliance with the Virgin Islands Energy Act

mandates;



d. it is critical that the Leased Generation and the new generation be brought on-line in

a prompt manner at the lowest net present cost to consumers and that WAPA use all

necessary internal and external resources, if needed, to do so; and

Order No. 18/2020

Docket 676: Extension of Leased Generation Surcharge

Page 2 of 2



e. WAPA’s LEAC forecasts have historically been optimistic in assuming that

improvements in generation efficiency will be made by improvements in its existing plant

or the implementation of new generation that are often delayed, to the ratepayers’

detriment.



WHEREAS, the Commission ordered in PSC Order No. 45/2019 that the requested

Leased Generation Surcharge was approved for the payment of generation equipment leases and

training for the operation of the new Wartsila units in the amount of $0.030842 per

kilowatt/hour, conditioned on meeting specific requirements prior to collection from ratepayers,

and that the collection of the Leased Generation Surcharge was limited to six (6) 30-day billing

periods once collection begins; and



WHEREAS, the Authority satisfied the condition and began the collecting the surcharge

as of July 1, 2019, which was therefore to expire as of December 31, 2019; and



WHEREAS, the Commission having only received the hearing examiners report on

December 11, 2019, the evening before the December 12, 2019 meeting, has not yet concluded a

base rate proceeding; and



WHEREAS, the expiration of the Leased Generation Surcharge may jeopardize the

continued generation of electricity by the Authority and would cause a worsening of the

Authority’s fuel and cost effectiveness; and



WHEREAS, the Commission met in an emergency session on December 27, 2019, to

consider the extension of the Leased Generation Surcharge;



NOW THEREFORE, the Commission ORDERS that the Leased Generation Surcharge,

in the amount of $0.030842/kWh is extended for a period not to exceed 120 days, which ends April

30, 2020.



So Ordered.



For the Commission,



Dated: January 8, 2020



ughgs, Chairman