Virgin Islands seeks relief plan for WAPA

Register now

U.S. Virgin Islands Gov. Albert Bryan forged an agreement with lawmakers to work collaboratively in identifying funding for outstanding debt tied to the island’s Water and Power Authority.

Governor Roach and all 15 senators reached the cooperative agreement in an emergency session on Saturday a day after WAPA’s propane fuel supplier, Vitol, issued a default notice saying it would suspend deliveries. WAPA switched to a more expensive diesel energy at Noon Saturday after defaulting on the Vitol payments.

“We do have a real crisis,” Gov. Bryan said in a statement Saturday. “The most immediate need right now is for relief to the Authority.”

Vitol’s default notice came after a denial by the Public Services Commission (PSC) of a base rate increase, which Roach said would allow WAPA to refinance its debt. WAPA officials have said the utility does not have revenues to pay the higher fuel costs and will not be able to sustain electrical generation without an immediate infusion of cash.

Following Saturday’s meeting between Governor Bryan, Lt. Gov. Tregenza Roach, senators and WAPA CEO Larry Kupfer, lawmakers agreed they would consider meeting in a special Session Monday to appropriate upwards of $3 million to meet the utility’s immediate shortfall to begin the resupply of propane gas. Governor Bryan also requested that lawmakers work alongside his Administration to develop a long-term solution to addressing WAPA’s mounting debt that includes supporting a base rate increase.

The PSC noted that the central government has already been making payments to assist WAPA with its liquidity issues, but stressed that this assistance is not sustainable. The governor and lawmakers are seeking a long-term solution and are also asking for WAPA be transparent about how funds from previous rate increases to pay Vitol were utilized. WAPA agreed at the meeting to work toward improving its billing practices. according to Bryan.

“Our intent is to create a solution that is well-thought-out and holds WAPA accountable,” Bryan said. “Our goal, always, is to have a more reliable and affordable power grid.”

Moody’s Investors Service downgraded WAPA’s senior electrical system bonds to Caa2 from Caa1and its subordinated bonds to Caa3 from Caa2 in September with negative outlooks citing increase default risks. Fitch Ratings rates WAPA’s debt at CCC with a negative outlook.

For reprint and licensing requests for this article, click here.
Speculative grade bonds Virgin Islands Water and Power Authority Government of the Virgin Islands U.S. Virgin Islands
MORE FROM BOND BUYER