WAPA moves ahead in transition to relying on liquefied natural gas
Published: September 28, 2012
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ST. THOMAS - The V.I. Water and Power Authority is taking the next step in moving the territory away from high-priced fuel oil and toward liquid natural gas.
WAPA Executive Director Hugo Hodge Jr. told board members Thursday that a request for qualifications will go out the first week in October for a company to provide liquid natural gas and liquid propane gas as a fuel for the authority's power generators in both districts.
The authority actually is issuing two separate RFQs, one for propane and one for natural gas. According to the RFQ, propane would be used as a "bridge" fuel until the natural gas infrastructure is in place and operational.
Requests for qualifications differ from request from proposals in that RFQs are chance for companies to introduce themselves, share their experience and present financial information about the company. In addition, the responses will include proposals to develop a system for WAPA to use gas or propane and provide prices for the various services.
An RFQ allows a company to submit a proposal that offers an open-ended opportunity to present a more comprehensive plan, whereas an RFP generally has more rigid parameters that companies to which companies must adhere.
WAPA is looking for a gas supplier, but the proposals must include the whole system - obtaining, shipping, unloading and storage.
Hodge said WAPA would prefer to choose one company for everything but will consider selecting multiple vendors for different aspects of a liquid natural gas system.
In conjunction with the RFQ, WAPA is working on converting its oil generators to burn gas. Hodge said the conversion process is largely the same for liquid natural gas or liquid propane gas, only the nozzle is different.
Hodge said that while the process is beginning now, it will be several years before a working system is in place and WAPA is able to generate power from gas.
Although WAPA anticipates that propane is suitable only as a bridge fuel - because of pricing - the utility will consider it as a long-term alternative if respondents can provide competitive pricing for a long-term supply, according to the RFQ.
Hodge said the RFQ will go out next week, and the top proposals will be selected by January.
The RFQ will go out globally, he said. The ads will appear in trade magazines and will be given to trade associations to circulate to members, in addition to sending the requests directly to multiple liquid natural gas companies.
"This is a big step," WAPA board chairman Gerald Groner said. "We all know that getting off oil is our burden."
In a different effort to move WAPA away from 100 percent reliance on oil, the board adopted a draft Energy Generation Action Plan on Thursday.
The 22-page document compiles information about the utility's existing infrastructure and policies for the future of the utility.
Once the plan is finalized, it will be available to the public and given to the WAPA staff to use as a guiding document.
The plan includes guidelines for converting oil-fired generators to liquid natural gas, interconnecting to the Puerto Rico grid, diversifying the territory's power generation with solar and wind and exploring biomass and thermal energy solutions.
In other business, the board:
- Amended an existing contract for the Estate Whim waterline rehabilitation project. The board already had approved the contract, but the total was incorrect and short by about $122. The new project total is $2,192,202. The completion date was extended to Nov. 30.
- Extended the deadline to Dec. 8 for contractor Elephant Construction to complete the East End and Tutu substations project. The extension does not affect the $215,349 cost of the project, which will construct four metal air conditioned buildings to protect the two substations.
- Approved the $435,274 purchase of six utility vehicles: two new utility trucks for St. John; two used bucket trucks for St. Thomas; and a used bucket truck and new utility truck for St. Croix.
- Extended the contract to Dec. 31 for CIMCON Software for the utility's new streetlight control system. The time extension will not cost WAPA any additional money.
- Approved a contract with RG Engineering for the implementation of new fire suppression systems at the Richmond and Harley power plants. The total project will cost $3.8 million but will be spread out over three fiscal years. When the project is complete, it will reduce the utility's property insurance premiums by about $500,000 per year.
- Extended the completion date to Nov. 30 for repairs to Unit 15. The time extension will not cost WAPA any additional money.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.