Small group testifies against WAPA base rate increase
Published: September 11, 2013
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ST. CROIX - Nine residents showed up to offer their thoughts on a proposed V.I. Water and Power Authority electric base rate increase during a V.I. Public Services Commission hearing Tuesday night.
A small group also came to listen to the testimony.
According to those involved in the hearing process - there have been hearings across the territory during the last week about the proposal - Tuesday's meeting had the largest public turnout. One member of the public showed up to testify on St. Thomas on the electric rate proposal and none showed up on St. John, officials said.
Those who spoke on Tuesday talked about how their WAPA bills are affecting them.
Charles George said he thinks the utility is too top-heavy and needs to fix that situation before a base rate increase is granted.
"You all need to cut the fat off the bacon, and then we can sit and talk seriously," said George, who held up his WAPA bill as he described how the price of electricity in the territory has been a "real devastating burden" on him and how he can't pay his $600 monthly WAPA bill.
WAPA's initial request for a permanent base rate increase, filed in November, was aimed at making permanent an emergency interim base rate increase of $8.6 million annually that the Public Services Commission granted in July 2012 and giving the utility an additional $18 million annually over and above the emergency interim relief, for a total of $26.6 million.
However, since then, WAPA has agreed to a lower request, based on an actuarial study that was completed on WAPA's other post-employment benefits, said WAPA Chief Financial Officer Julio Rhymer. Decisions were made for a different type of benefit and the obligation went down, meaning that the utility did not need to generate as much money with the base rate increase, according to Rhymer.
Therefore, the total annual amount that WAPA is requesting for the permanent base rate increase was lowered to $24.3 million, comprising the $8.6 million from making the emergency interim increase permanent and an additional $15.7 million instead of $18 million, he said.
Ratepayers have been paying the emergency interim increase in their base rates since August 2012. The proposal for an additional $15.7 million increase is expected to push that base rate up a further 2.3 cents per kilowatt hour, Rhymer said.
On Tuesday, WAPA executive director Hugo Hodge Jr. told The Daily News that the higher base rates will assist the utility with capital projects, efficiency improvements and maintenance projects that affect the electric system's performance. Ratepayers will see a return on that investment in greater efficiency and lower overall rates, according to Hodge.
A number of those who spoke at Tuesday's public hearing were retirees on fixed incomes who said they simply can not afford the increase.
Scott Liburd said he is flatly against the increase and referred to WAPA's requests every three months for an adjustment to the Levelized Energy Adjustment Clause, or LEAC. He noted that those increases send other prices soaring.
"By the end of the month, what I have? Nothing," he said.
Phyllis Nielsen said she is against anything that would raise the cost of living.
Noting that retirees are facing an increase in their insurance rates, Eurman Fahie asked the Public Services Commission not to increase the WAPA rates.
"St. Croix people can't take no more," he said.
St. Croix Chamber of Commerce President Mark Eckard spoke about the problems that the high cost of electricity has created for the local community - and particularly the business community. He spoke of closed businesses and how high energy costs keep new businesses from opening.
However, he stopped short of asking for a particular vote on the proposed increase, saying that chamber members are not energy experts.
"And so, commissioners, we rely on you to make this decision. We must have faith that you are educated as to all of these issues and more," Eckard said. "Our only request today is that you consider the impact your decision will have on the businesses of St. Croix. Although we cannot quantify an exact number, we have certainly lost a lot of businesses on this island from the insanely high cost of energy. And as stated above, our energy crisis is the number one impediment to the creation of new business."
Eckard also raised the question of what it would take for the energy crisis to improve, and said that the chamber has chosen, for now, to work with WAPA.
"Nevertheless, at this particular moment in time, a hike in WAPA's base rate is nothing less than a slap in the already bruised face of St. Croix's businesses," he said.
Hearing examiner Kye Walker will compile the information, along with information from testimony by WAPA and the Public Services Commission's consultants, Georgetown Consulting Group, and eventually will make a recommendation to the Public Services Commission about the proposal.
- Contact Joy Blackburn at 714-9145 or email email@example.com.