Home News Local news WAPA Won't Be Forced Into Power Agreement

WAPA Won't Be Forced Into Power Agreement


May 30, 2005 – For the second time, Gov. Charles W. Turnbull, on Saturday, vetoed a bill mandating the V.I. Water and Power Authority to enter into a power-purchase agreement with a company proposing to invest heavily in St. Croix.
The measure was first offered by Sen. Norman Jn Baptiste in the 25th Legislature as an amendment to the Financial Services Act, but was vetoed by the governor. Jn Baptiste reintroduced the measure with minimal changes in the 26th Legislature as a bill, under the name the Job Creation and Economic Stimulus Act of 2005. Senators approved the measure on May 5.
The bill, sponsored solely by Jn Baptiste, sought to force the utility to negotiate and purchase an alternative source of power from any small power producer or co-generator that is certified by the Public Services Commission that would invest no less than $150 million on the island of St. Croix within a four-year period. The legislation required WAPA to enter in the agreement by September.
In vetoing the measure, Turnbull called the bill "special legislation" and told senators they were overstepping their authority in approving the measure.
"This bill is far-reaching and infringes upon the statutory mandates and authorities of WAPA and the Public Services Commission," Turnbull stated in his veto letter.
The PSC has certified three companies thus far as small power producers: Caribe Waste Technologies, Caribbean Energy Resources Corp. and St. Croix Renaissance Group.
WAPA had sent out requests for proposals in its quest for purchasing an alternative source of power. However, the PSC banned WAPA from continuing with the competitive bidding process, mandating the utility to only negotiate with companies that were PSC-certified. The two entities are now battling before Superior Court to determine whether WAPA can use the competitive bidding process and to define clearly the areas where the PSC has jurisdiction over the utility. (See "Legal Battle Between WAPA and PSC Gets Expedited ").
Turnbull said the final decision about the utility purchasing alternative power should be made by legal authority or by any compromise between WAPA and the PSC. He said Jn Baptiste's legislation would only complicate matters further and "negatively impact the process."
"In addition, this bill favors one company, which actually forces WAPA to enter into an agreement with a particular company whether or not it is determined to be the best small power producer or co-generator," Turnbull said. "It should be duly noted that WAPA is an autonomous governmental instrumentality of the government and is governed by a board. Therefore, the Legislature is sidestepping its authority to mandate that WAPA enter into an agreement with a particular entity by a particular time."
WAPA's Executive Director Alberto Bruno-Vega said Monday the purpose of the bill – to stimulate the economy of St Croix – was "praiseworthy," but it used a wrong approach.
"There is no one in the Virgin Islands that opposes stimulation of the economy on St. Croix," Bruno-Vega said. "Our position is that the end does not justify the means."
Bruno-Vega said he believes that WAPA would be better able to assist in stimulating the economy if it is given the opportunity to provide the "most reliable and economic electric system." He said this would draw more investors to the territory, but that goal could not be achieved if WAPA's hands were tied.
Bruno-Vega said it was clear that the legislation was intended for Caribbean Energy Resources because it would have excluded all other companies certified by the PSC as small power producers.
For one thing, the legislation makes mention that "using an environmentally friendly waste-derivative fuel source, in addition to burning conventional oil to produce power, would pass on savings to the consumers."
Bruno-Vega said CERC planned to use petroleum coke, which is a byproduct or waste from the oil manufactured by Hovensa, to produce energy. Bruno-Vega said entering an agreement with CERC was like putting a straight jacket on the territory because the company was still dependent on oil.
"If there is no fuel around, there will be no petroleum coke," Bruno-Vega said, adding it would still be a dependence on fuel and not a true alternative source of power. "This will not be diversifying our fuel sources."
CWT planned on converting the territory's solid waste to energy through gasification, but Bruno-Vega said that company was ruled out. CWT planned to build facilities on St. Thomas as well.(See "PSC Certifies Caribe Waste as Power Producer").
The mere fact that the company had to invest no less than $150,000.000 within a four-year period disqualified Renaissance Group, Bruno-Vega said, because the company claims it already invested a good portion of that money on St. Croix when it bought the old St. Croix Alumina plant. However, according to the legislation that would not count.
Bruno-Vega found fault with other parts of the legislation as well. One section said the small power producer "shall create and maintain a workforce of no less than 400, ensuring 400 permanent jobs, wherein bona fide residents of the Virgin Islands shall hold 90 percent of the permanent jobs." However, towards the back of the legislation, a note says "permanent jobs" means employment positions that will be available for at least "40 hours per week and two years after the execution of the agreement."
"We believe that is an empty promise," Bruno-Vega said, adding by the time the company gets the necessary permits from the Planning and Natural Resources Department and the Environmental Protection Agency, two years would more than likely have passed and then they could hire any number of people they wanted.
Bruno-Vega said, "This is drastically negative for the community as a whole. It sets a dangerous precedent for special interest legislation."
On Saturday, Turnbull also vetoed a bill for a zoning request in Strawberry Hill, St. Croix. The bill sought a rezoning on 14 parcels of land in the area from R-2 (residential – low density, one and two family homes) to B-3 (business scattered). Various businesses had been planned for the Strawberry Hill area, including a laundry, a day-care center, a real estate office and a doctor's office.
Turnbull wrote, "DPNR recommends only home-based businesses on this property, because if the area is further developed, the property owners will need to seriously address re-channeling the flow of floodwaters, since development would likely increase the impact of floodwaters on the Queen Mary Highway."
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