WAPA receives $13 million loan from USDA

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ST. THOMAS - The V.I. Water and Power Authority has received a $13 million low-interest loan from the federal government to revamp its metering system, making it more efficient and more convenient and saving the utility millions of dollars over the next 15 years.

The U.S. Department of Agriculture's Rural Utilities Service Program announced the loan for WAPA on Friday.

The Virgin Islands was the only territory, along with 25 states, to receive a piece of the $1.8 billion made available for electric utility infrastructure projects.

The long-term, low-interest loan will fund WAPA's Advanced Metering Infrastructure and Distribution Automation projects.

The Advanced Metering Infrastructure program, also known as AMI, will replace all electricity meters in the territory. The system will help WAPA reduce energy theft, improve the billing process and reduce line loss with the use of new meters and accurate meter reads. The new system will allow WAPA to read customers' meters from the office instead of having to go out into the field, according to WAPA Executive Director Hugo Hodge Jr.

"It will be the backbone for our smart grid system and our automation," Hodge said.

In anticipation of getting the federal loan, Hodge already has advertised for and awarded contracts for the project.

One year ago, the WAPA board approved a $9.9 million contract with Tantalus-Itron to supply the technology and hardware for the project. In August, the board approved an $843,239 contract with Power Systems Engineering to provide the installation of the meters, Hodge said.

Now that the funding has been released, the project can proceed, he said. The anticipated deadline for completion is June 2014, but Hodge said he expects to be done sooner.

The second project funded by the federal loan is a Distribution Automation program, which will improve the reliability of the electric grid.

The new system will allow the switches in the field to "talk" to each other and re-route power in an outage to get customers restored more quickly, Hodge said. The new switches will sense the condition of the grid and communicate with the utility's system, sending out technicians to precisely where the problem is located.

"With the new system, that whole process takes minutes," Hodge said.

The loan has a low interest rate, between 3 percent and 4 percent and a 15-year term, according to Hodge.

Hodge said the utility has worked hard for the last several years to get a 100 percent rural designation from the federal government. That designation was required to apply for assistance.

He said they originally applied for the funding to be a grant, but were denied. Then the application for a loan was submitted.

"Once you're in the program, we can go after more USDA funds and grants," Hodge said.

He expects that with the new technology in place, the utility will save about $13 million over the next 15 years.

"I think this is a culmination of a lot of planning, a lot of research and it's good to see it come to fruition," Hodge said.

- Contact reporter Aldeth Lewin at 714-9111 or email alewin@dailynews.vi.

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