Jan. 31, 2006 – The governing board of the V.I. Water and Power Authority voted unanimously Tuesday to use wind to generate power and reduce energy costs.
In a process that has been ongoing for almost two years, board members approved the recommendation of WAPA's technical team, led by Alberto Bruno-Vega, executive director, to offer Innoventor Technologies of Maryland Heights, Mo., a power purchase agreement for 15 to 20 years. Innoventor proposes to use 12 wind turbines, each supplying 1.65 megawatts for a total of 19.8 megawatts of power — or about one-third of WAPA's daily need for St. Croix.
Innoventor proposes to be operational by 2008, 24 months after a contract is signed with the authority. The board's recommendation must be sent to the Public Services Commission for review by Feb. 16.
Bruno-Vega said Innoventor met all of the criteria in the Request for Proposal as mandated in the Rate Reduction, Job Creation and Economic Stimulus Act, as well as met WAPA's technical requirements.
Bruno-Vega said that a very important requirement was that the company would be able to provide energy at the lowest cost of all bidders and below WAPA's avoided cost.
In this case, the avoided cost is what it will cost WAPA to generate a similar amount of electrical energy in its power plants or purchase from another source in the year 2008, when it is anticipated that WAPA will have installed its Waste Heat Recovery Boiler on St. Croix and proponents could be commercially available to sell energy to WAPA.
WAPA's production cost is projected to be reduced to 11.10 cents per kilowatt hour (kWh) from its present 18.3 cents/kWh. Innoventor has proposed a flat charge of 10.93 cents/kWh for the life of a 15-year contract with an option to renew for five more years. There will be no fuel charge. Renaissance Group of St. Croix and Energy International of Puerto Rico also submitted bids.
Ben Rivera, executive director of the St. Croix Chamber of Commerce, announced at the beginning of the Chamber's meeting Tuesday that the Chamber's campaign to get WAPA to choose Renaissance as an alternative energy supplier had failed. He said he had learned that WAPA was choosing Innoventor. Although he said he was for wind energy, he thought Renaissance would have been a good short-term solution because wind energy might not be supplied within five years.
According to a press release from WAPA, Renaissance proposed to burn coal to supply energy at a cost of 15.9 cents/ kWh with an escalating component linked to the Consumer Price Index. Its fuel pricing formula provided "past through" fuel price costs to WAPA. The cost per kilowatt hour would escalate over the years of the contract based on the higher price of coal (based on a coal index) or the actual delivered price to the Renaissance port. This arrangement could be compared to the present Levelized Energy Adjustment Clause (LEAC) factor, the cost which WAPA passes on to its customers based on the cost of delivered fuel oil. While Renaissance could begin operation in 18 months, after a contract is signed, it requires WAPA to accept an agreement for both water and electricity.
The press release further stated that Energy International proposed to generate energy using diesel or light heavy fuel — an operation similar to WAPA's existing generation. The cost of Energy International would be 15.8 cents/kWh compared to WAPA's 11.1 cents/kWh and also requires the utility to purchase both water and power.
WAPA Board Chairman Daryl "Mickey" Lynch and the other governing board members spoke highly of the research and effort put into the selection of Innoventor by Bruno-Vega and his technical team made up of engineers, power plant personnel, a technical consultant from R.W. Beck and other legal and finance personnel.
Members of the technical team visited several wind farms and the administrative offices of Innoventor to ascertain the stability of the company and its operations.
"The board has done its due diligence and is convinced that this is the right decision and in the best interest of the authority," Lynch said.
Bruno-Vega said that the island of Curacao and also Denmark are leaders in using wind-generated energy. There is also a strong movement in the United States to use wind technology, he said.
Bevan Smith, V.I. Energy Office director, announced a cost/benefit analysis to determine the viability of wind turbine systems in the Virgin Islands last year. A tower was erected on St. Croix late last summer and devices were attached to existing towers on Crown Mountain, St. Thomas; and on Bordeaux Mountain, St. John. Each tower has devices measuring wind 10 meters and 30 meters above ground level. (See "Energy Office Testing the Winds as Power Source"). Bruno-Vega said wind turbines have proven to be reliable and sturdy and can sustain up to three events of 150 miles per hour.
WAPA will now draft a power purchase agreement for Innoventor and present it to the governing board.
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