GOVERNMENT OF THE U.S. VIRGIN ISLANDS

PUBLIC SERVICES COMMISSION



In re Water and Power Authority's

Emergency Petition for Approval Of

Electric System Rate Relief



Docket 603



And Order No. 28/2012

In re Water and Power Authority's

Emergency Petition for Approval Of

Water System Rate Relief



Docket 604



eed



FINDINGS OF FACT AND ORDER



WHEREAS, the Commission, having received the Petitions of May 31, 2012 and the Amended

Petitions filed June 28, 2012; and



WHEREAS, the Amended Petitions contain testimony of the Authority's Executive Director and

Chief Financial Officer; and



WHEREAS, the Amended Petition for the Electric Department seeks $16.2M per year in

additional revenues; and



WHEREAS, the Amended Petition for the Water Department seeks $2.576 M per year in

additional revenues; and



WHEREAS, the Commission, having heard the testimony before this Commission of the

Authority’s witnesses and the Commission’s technical consultants; and



WHEREAS, the most recent base rate investigations of the Water Department (Docket 576) and

the Electric Department (Docket 575) were conducted in 2009; and



WHEREAS, these matters were filled as emergency proceedings, and the Commission seeks to

prevent any harm to either the regulated utility or its rate-paying customers.



WHEREFORE, the Commission now makes the following findings of Fact:



A. The Water Department has failed to meet its bond obligations for debt service coverage for the

past three fiscal years (ending 2009, 2010 and 2011) and without an increase in its revenues will

fail to meet that coverage again in 2012.



B. Ifthe Water Department fails to meet its bond covenants it may face action by the bondholders

or bond trustees, and an immediate downgrade in its bond rating;



C. The Electric Department is meeting its debt service coverage requirements.



Both the Electric and Water Departments must make adjustments to their books to account for

Other Post Employment Benefits (“OPEB”), costs which the Authority will have to pay for its

retired employees other than direct pension costs, which costs must be reflected currently; and