WAPA starts new phase of propane storage project
Published: June 3, 2014
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ST. THOMAS - The V.I. Water and Power Authority finished blasting rock last week and is now beginning construction on the storage systems needed to convert the territory's oil fired power plants to propane.
Once the territory's electricity is largely generated by propane, customers can expect to see a 35 percent reduction in the Levelized Energy Adjustment Clause portion of their bill, WAPA Executive Director Hugo Hodge Jr. said.
Hodge said customers will begin to see a reduction in October, and the full reduction will be in place by the end of the year.
"For sure by January they will see the full savings," Hodge said.
The final blast on the St. Thomas hillside overlooking the Harley Power Plant was made Thursday.
The St. Croix propane conversion project has already moved ahead into the construction phase.
On St. Thomas, the blasting began April 9. A total of 24 blasts, making about 60 holes per blast, have been conducted with 38,756 pounds of explosives, according to WAPA officials.
Approximately 46,000 cubic meters of rock was taken from the site and will be temporarily stored, crushed and returned to the site to use as fill during the construction phase.
On St. Croix, 11 rock structures were demolished and about 9,000 cubic meters of soil was excavated to accommodate the new facility, according to a WAPA news release.
A public sewer line crossing the construction site was also relocated, the release stated.
The 18 propane storage tanks are under construction in Belgium and are almost finished, Hodge said. The tanks will begin to arrive in the territory at the end of June or beginning of July, he said.
Ten tanks - each measuring about 174 feet long and 21 feet in diameter - will be placed at the St. Thomas facility. The eight tanks to be installed on St. Croix are slightly smaller, about 157 feet long and 21 feet in diameter.
The propane will be delivered to the territory on a "very large gas carrier" and smaller vessels will take the propane to the power plants every three days, Hodge said.
The two delivery boats are being built in Japan and will be christened later this month.
The authority is finalizing the plans and permits required to make the necessary upgrades to the WAPA docking facilities in each district.
In July, WAPA signed an agreement with Vitol Virgin Islands Corp. to build storage terminal facilities at the St. Thomas and St. Croix power plants and to upgrade eight turbines to burn liquefied petroleum gas - better known as propane.
The agreement with Vitol is a "build, own, operate, transfer" project, according to earlier statements by Hodge.
WAPA will use about 250,000 tons of propane annually, according to Vitol officials. The utility will pay only for the propane that gets used and does not have to buy propane up front.
Vitol is financing the $93 million project up front at no cost to WAPA.
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.
With the recent federal push to curb carbon emissions, the switch to propane now will prevent the utility from having to spend a lot more money on lower sulfur fuel oil in the future, Hodge said. Higher fuel costs would have to be passed on to the consumer through the LEAC. With the propane - and the solar projects expected to come online by the end of the year - consumers will be seeing lower bills, even with any new federal regulations that may be implemented.
"We're extremely excited. We can't wait for people to open that first bill and see that reduction," Hodge said.
For more information about WAPA's propane project, go to www.poweringvi.vi.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.