WAPA board approves buying new parts for unit overhaul at St. Croix power plant

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ST. CROIX - The V.I. Water and Power Authority Governing Board approved buying replacement parts in preparation for an upcoming overhaul of St. Croix's Unit 17 and OK'd setting up bank accounts for various special funds during its regular meeting Thursday.

Unit 17 - which last underwent an overhaul in 2004 - is in line for a major overhaul, said Ira Bowry, plant superintendent for the Richmond Power Plant.

While down, Unit 17 also will be reconfigured to accommodate the switch to propane scheduled for the last quarter of 2014, according to WAPA.

A first-stage nozzle, a part that evenly distributes gas to the turbine, is needed, Bowry said.

WAPA tries to keep one of the first-stage nozzles as a spare part in storage, but that one was used during the overhaul on Unit 16, he said.

"We are now replenishing," he said.

The new part would be on hand to be used if necessary once workers start the overhaul on Unit 17, then the old one would be taken out, repaired if possible, and kept in stock as the spare, according to Bowry.

On Thursday, the board voted to award a purchase order for $217,600 to ACT Independent Turbo Services, Inc. for the purchase of a gas turbine first stage nozzle.

Board members Gerald Groner, Juanita Young, Noel Loftus, V.I. Energy Office Director Karl Knight, Planning and Natural Resources Commissioner Alicia Barnes and Licensing and Consumer Affairs Commissioner Wayne Biggs Jr. voted yes. Members Cheryl Boynes-Jackson and Elizabeth Armstrong were absent.

Bowry also said certain other gas turbine parts for the overhaul of Unit 17 should be purchased in advance to limit the downtime while the unit is undergoing maintenance.

The board agreed and voted unanimously to issue a $270,705 contract to GENEX for the purchase of the parts, which include one set of first stage Shroud blocks, one set of combustion liners, one set of transition pieces, one set of first stage buckets and a first stage nozzle support ring.

Ordering the items now, ahead of time, will reduce the length of the overhaul, according to Bowry.

The board also approved establishing three separate local bank accounts for funds that need to be kept track of separately for different reasons.

One of the bank accounts is for Other Post Employees Benefits funds, abbreviated OPEB. The OPEB funds, which include promised benefits other than pensions for future WAPA retirees, must be segregated by order of the V.I. Public Services Commission, officials said.

Officials said these funds also will need to be invested for WAPA to reduce its liability for those benefits.

The second account is for VIenergize Services, a new business unit at WAPA that is focused on helping consumers become more energy efficient.

WAPA intends for VIenergize to be self-funded through its business initiatives and having a separate account will allow for proper tracking of the funds, according to Chief Financial Officer Julio Rhymer Sr.

The third account is for fuel tax proceeds.

The 29th Legislature in 2012 passed a law raising the gasoline tax from 7 cents per gallon to 14 cents per gallon. The law calls for the revenue to be used to purchase new generators for WAPA and to help with WAPA bond issuances.

Officials said the V.I. Finance commissioner will distribute the fuel tax proceeds to WAPA quarterly. The new bank account will keep them separate from other WAPA funding, according to Rhymer.

The board voted unanimously to authorize the establishment of the bank accounts for those purposes.

In other action, the board:

- Approved entering a one-year $350,000 contract with BDO as the independent external auditors to perform the audit for the Fiscal Year ending June 30, 2014.

This is an optional one-year renewal that was in an existing contract, WAPA officials said.

The board had approved the initial $340,000 contract on June 27, 2013, for the FY 2013 audit. Rhymer said the company had done "exemplary" work on that audit, enabling WAPA to become compliant with a bond covenant. Officials said the extra $10,000 for the FY 2014 audit had been built into the contract.

- OK'd a resolution to amend the governing board bylaws.

WAPA Executive Director Hugo Hodge Jr. said that some upper management restructuring had been done at the utility in an attempt to become more efficient. He said he had too many people reporting directly to him.

According to the request for governing board action, the responsibilities for the position of director of Corporate Services have been reduced, while the position of director of Transmission and Distribution - a territorial position - will have enhanced responsibilities when the Smart Grid System is implemented in the territory.

The board amended its bylaws to remove the position of director of Corporate Services as an officer of WAPA and to add the position of director of Transmission and Distribution as an officer.

Also during the meeting, after an executive session, Loftus said the board had discussed legal matters and personnel.

- Contact Joy Blackburn at 714-9145 or email jblackburn@dailynews.vi.

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