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The high cost of energy is a major challenge for the USVI, so WAPA has launched a project to lower energy bills while switching to a cleaner burning fuel.

Switching to propane will lower fuel costs by approximately 30 percent and decrease greenhouse gas emissions by about 20 percent.

The Smart Choice

Propane is a safe, practical and environmentally friendly fuel choice. It’s the same fuel used to heat countless outdoor grills, and has even been used to light the Olympic torch.

Myth

Ever-increasing power bills are just a fact of life in the Virgin Islands.

Fact

Switching to propane will save approximately $90 million in annual fuel costs at today’s prices, and those fuel cost savings will translate into significant reductions … More

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Partnering with the global energy company Vitol, WAPA plans to outfit its existing facilities to use propane for power generation. Propane is the best near-term option to significantly reduce the cost of fuel for power generation and lower customers’ utility bills. Ultimately, WAPA’s initiative will deliver an environmentally friendly, lower cost, safe, and reliable source of energy to the USVI.

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WAPA Announces Rate Decrease for January 1, 2015

December 17, 2014

39.19The Virgin Islands Water and Power Authority

Corporate Communications

NEWS RELEASE

Contact:  Jerain Fleming, Public Information Officer

340-774-3552 extension 2065 or 340-244-1245

communications@viwapa.vi / www.viwapa.vi

December 16, 2014

WAPA Announces Rate Decrease for January 1, 2015

The Virgin Islands Water and Power Authority (WAPA) announces a rate decrease for the first six months of 2015. The new rate will be 39.19 cents per kilowatt hour, down from the current rate of 48.6 cents per kilowatt hour. The lower charge is due, in part, to WAPA’s ongoing propane conversion project, which will begin utilizing the more affordable fuel in the first quarter of 2015, as well as the reduction worldwide in fuel oil prices.

Since signing the initial contract in July 2013, WAPA and its partner and supplier for the project, Vitol, have implemented an aggressive schedule to deliver the benefits of the fuel switch to the Territory and its residents as swiftly as possible. WAPA plans to use propane as its primary fuel source by the Spring of 2015, which will mean a 20% decrease in greenhouse gas emissions and a 30% reduction in the cost of fuel. These fuel cost savings will directly lead to significantly lower power bills for WAPA customers, as we are already seeing with today’s announcement.

Commenting on the rate decrease WAPA Executive Director Hugo V. Hodge Jr. said, “We are pleased to pass along these initial cost savings to our customers and look forward to further rate decreases as our propane conversion project becomes fully implemented. Delivering affordable and reliable power to our customers throughout the Territory remains our top priority and this rate reduction exemplifies why WAPA has spearheaded the fuel switch project.”

“This is only the beginning,” Hodge went on to say, “and on behalf of the Authority, Merry Christmas and Happy New Year to All.”

WAPA rate image

Rates are approved by the Public Services Commission of the Virgin Islands

Other benefits of WAPA’s switch to propane include:

  • Propane is the best near-term option for lowering power generation costs. WAPA customers will realize savings in the fuel cost component of their bills, commonly known as the LEAC.
  • As expenditures on electricity drop, many households will have more disposable income to partake in other economic activity.
  • Propane will help improve the quality of indoor and outdoor air as it produces less soot and NOX than diesel or oil.
  • The use of propane is an excellent complement to renewable sources of power like wind and solar. Developing the ability to use propane is consistent with the USVI Energy Road Map initiative and WAPA’s Energy Action Plan.
  • The project has been carefully planned to ensure that employee and public health and safety are protected with world class systems and technology.
  • Propane will be stored on-site at the power plants in St. Thomas and St. Croix in buried tanks with 100% redundant safety mechanisms.

WAPA Announces Updated Budget for Propane Conversion Project

November 20, 2014

The Virgin Islands Water and Power Authority

Corporate Communications

NEWS RELEASE

Contact:  Jerain Fleming, Public Information Officer

340-774-3552 extension 2065 or 340-244-1245

communications@viwapa.vi / www.viwapa.vi 

November 20, 2014

WAPA Announces Updated Budget for Propane Conversion Project

Anticipated 30% Fuel Cost Savings will Not be Impacted by New Budget

Today the Virgin Islands Water and Power Authority (WAPA) and Vitol, WAPA’s partner and supplier for the propane conversion project, announced an updated project budget. The revised budget, for the projects on St. Thomas and St. Croix, does not impact the benefits of the propane conversion for the Territory.  WAPA’s use of propane is still expected to begin in the first quarter of 2015.

Since signing the initial contract in July 2013 the project partners have implemented an aggressive schedule to deliver the benefits of the propane conversion to the Territory as soon as possible. The project commenced with an initial estimated project budget before the front end engineering and design (FEED) was complete.  Following the completion of the FEED, the project leadership anticipated needed adjustments to the budget. The need for the adjustment to the project budget was realized as unforeseen complications arose.  These complications have resulted in the need to increase the project budget. The new total project budget is $150 million.

It is important to note, that although the project’s costs have increased, customer savings from the switch to propane will not be impacted. WAPA remains committed to maintaining savings for all customers, and fuel costs will still be reduced 30% due to the conversion from fuel oil to propane.  These fuel cost savings will be passed along directly to customers.

Commenting on the revised budget WAPA Executive Director Hugo V. Hodge Jr. said, “I want to assure our customers that the adjusted project budget will not impact the amount of savings expected for WAPA customers, or the improvements to air quality that the conversion project will deliver for the territory.  We continue to anticipate a 30% reduction in the cost of fuel and a 20% reduction in greenhouse gas emissions.  While the amortization period will be longer, the economic and environmental benefits will not be forfeited. We continue to look forward with great anticipation to providing these benefits to the community as soon as possible.”

The increased cost of the project is being shared by the project partners, WAPA and Vitol. Vitol is still paying all upfront costs and WAPA will now repay Vitol according to a new amortization schedule. WAPA and Vitol had previously agreed to an amortization period of seven years with the option to complete payment in five years. The amortization period has been extended to ten years, with the option to complete payment in seven years.

The primary reasons for the project cost increase are improvements in the scope of the project and the cost of permitting and materials to complete the project. For example, the offshore propane storage vessel will now be held in place using a permanent mooring instead of being anchored in place. This is a safer and more secure way to keep the fuel in place during periods of inclement weather. Another driver of the cost increase was undocumented soil conditions and underground obstacles at the St. Croix site.  On St. Thomas the volume of rock needed to be removed from the site was far greater than anticipated. Weather-related delays, maintenance, and clean-up after storms have also impacted the project budget.

Project Background

On July 25, 2013, WAPA signed a contract with Vitol Virgin Islands Corporation to build the infrastructure needed to handle and store propane, and to convert seven of WAPA’s existing GE turbines to burn propane.  The project is expected to reduce WAPA’s fuel cost by approximately 30%, or $90 million annually, which will be realized by ratepayers.  The project will also reduce emissions of greenhouse gases by approximately 20% and greatly reduce emissions of particulate matter from both power plants. The preliminary budget estimate for the project was $87 million. That number was determined before final front end engineering and design (FEED) work was completed, and before permitting activities had begun. The project always envisioned adjustments to this number following the FEED process.

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Safety Features of WAPA’s Propane Storage Tanks on St. Croix Exceed Recommended Safety Requirements

November 10, 2014

The recommended safety distance between a property line and an industrial propane storage tank is 30 meters, approximately 98 feet. At WAPA’s St. Croix power plant new propane storage tanks are being installed 106 feet from the nearest fence line, which is greater than the recommended safety distance.

For maximum safety the propane storage tanks are being buried and encased in concrete mounds, which will serve as a barricade and protect the tanks in any type of hazardous situation, such as a hurricane or earthquake.  The distance from the outer wall of the mound to the Authority’s property line is 70 feet, and the distance from the wall to the nearest storage tank inside the mound is 36 feet, bringing the total distance to 106 feet, well above the minimum safety distance.  Furthermore, there is an additional 20 feet from WAPA’s property line to the nearest building.

The St. Croix facility will also be equipped with gas monitoring and leak detection systems so that if a leak or breach occurs it will be identified and stopped immediately.  The project engineers and designers also commissioned an independent “Fire Risk Assessment and Hazardous Area Classification” study, to help guide design of the propane tank storage facilities safety features.  All of the recommendations from this study are being implemented.

WAPA’s propane conversion projects on St. Croix and St. Thomas are an important improvement for the USVI. The new facilities will help WAPA lower power bills for all residents, provide reliable power and help keep the community safe.