St. Thomas CZM Committee OKs permit for WAPA propane project


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ST. THOMAS - The V.I. Water and Power Authority's project to use propane to make electricity now has received two thumbs up.

WAPA received its first go-ahead on a major permit from the St. Croix District's Coastal Zone Management Committee on Tuesday night, and its second go-ahead from the St. Thomas District's CZM Committee on Wednesday night.

"This is another big step in the process," WAPA Executive Director Hugo Hodge Jr. said Wednesday evening after the brief committee vote.

The permit approval comes with a number of conditions, including a two-day advance notice to the committee before beginning development, similar to a condition set by the St. Croix CZM committee.

The notice is expected to be issued to the committee today for the St. Thomas District, and notice was scheduled to be given to the St. Croix District on Wednesday.

Additionally, the committee asked that they receive copies of all necessary permits that the project requires before building begins.

The St. Thomas committee also requested that the appropriate steps be taken to protect the environment surrounding the project, as well as any property with historical value, including two World War II bunkers in the vicinity.

"We look forward to breaking ground," Hodge said.

WAPA signed an agreement with Vitol to build storage terminal facilities at the St. Thomas and St. Croix power plants and to upgrade eight turbines to burn liquefied petroleum gas - also known as propane.

The agreement with Vitol is a "build, own, operate, transfer" project, according to earlier statements by Hodge.

Vitol is financing the $93 million project up front at no cost to WAPA. The utility will purchase the propane from Vitol, but only what it uses to create energy, Hodge said.

After seven years of operation, when Vitol has recouped its investment with a 10 percent return, the ownership of the facility will transfer to WAPA.

Vitol is the permit applicant because it will own the facility for the next seven years, Hodge said.

According to the permit application, Vitol will install 10 storage tanks, buried under two raised mounds on the hillside above the Harley power plant on St. Thomas. A two-story office building and a road, along with drainage infrastructure, will be included in the construction.

The top of the hill will be cut down some to build the storage facility.

The overall size of the mounds will be 128 feet wide, 420 feet long and 30 feet high.

Converting the utility's fuel source from oil to propane will reduce fuel costs by about 30 percent - about $90 million - a year, Hodge said. The territory could reap the benefits of the cost-decrease as soon as this fall, he said.

For more information about WAPA's propane project, go to www.poweringvi.vi.

- Contact Jenny Kane at 714-9102 or email jkane@dailynews.vi.

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