The Virgin Islands Water and Power Authority released the following statement Tuesday night in response to the Public Services Commission’s vote to reduce the LEAC charge:
The Virgin Islands Water and Power Authority (“WAPA” or the “Authority”) is deeply discouraged and profoundly disappointed by the action taken today by the Public Services Commission (PSC). In what appears to be a deliberate, ill-considered decision – deliberately overlooking facts, the PSC has ordered WAPA to lower electric rates, reducing WAPA’s budget by $2.5 million per month in a move that is not only irresponsible, but harmful to the public interest.
“I fully understand the desire to provide rate relief to the customers of the Virgin Islands Water and Power Authority,” stated WAPA CEO and Executive Director Karl Knight.
“We all share that same desire, and WAPA has been working aggressively to get to that point, but we must do so in a responsible manner that does not immediately jeopardize our ability to provide electric and potable water services in the Virgin Islands.”
While the PSC may believe that they are advocating on behalf of ratepayers, the decision by the PSC, made without fully considering the operational and financial consequences, places the Authority at risk of defaulting on its obligations to vendors, contractors, and employees. As we approach hurricane season, already fiscally challenged, it is the people of this territory who will pay the price for the PSC’s unsound decision-making, placing the entire Virgin Islands at great risk.
WAPA has been fighting on every front to maintain stability amidst rising fuel costs, aging infrastructure, and legacy debt. WAPA is only now, after many years, beginning to realize the operational savings necessary to dig itself out of its deep financial hole. Within the last year, WAPA has significantly reduced its monthly deficit, allowing us to improve the timeliness of fuel payments and continue addressing outstanding balances with local vendors. Today’s action reverses the very real progress we are making and decreases our annual budget by $30 million.
Teaching WAPA a so-called “lesson” or placing a government instrumentality “in the penalty box for three months” through these tactics as was stated in today’s hearing is irresponsible governance. That mindset is unfit for a regulatory, quasi-judicial entity like the Public Services Commission who we depend on for sound and rational decision-making. Rate adjustments must be data-driven, deliberate, and made with full understanding of operational realities and facts. There is no room for political grandstanding in that environment.
There is a sustainable pathway to increase service reliability and cut rates, but this is not the way. This cripples the Authority and will hurt its customers.
We call on the Public Services Commission to immediately reconsider this decision before irreversible harm is done to the Virgin Islands community.
St. Croix Source
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