Virgin Islands commission denies rate increase to struggling utility
The Virgin Islands Public Service Commission refused to approve a rate increase for the island Water and Power Authority, which some see as near default.
The commission rejected the authority’s request for an electrical increase at a hearing held Thursday, a commission spokesperson said.
This is the second time this year that the commission has declined an authority request for a base rate increase.
The cost of fuel determines a part of electrical customers’ bill. The board ordered this Levelized Energy Adjustment Clause, or LEAC, charge cut by 5.93 cents to 16.39 cents per kilowatt-hour.
The board said it would investigate the money that WAPA owes for past fuel deliveries before considering a base rate increase.
The board expressed concern that the authority hadn’t yet submitted an audit of its financial affairs with VITOL, its fuel supplier.
In September Moody’s Investors Service lowered the authority’s senior bonds to Caa2 from Caa1 citing seven factors pressuring the authority.
WAPA has $252 million in bonds and $633 million in total debt outstanding.
WAPA can appeal the board’s decision within 30 days.
Virgin Islands residents pay the highest electrical rates in the U.S.