US Virgin Islands Legislature Can Change WAPA’s Governance Form, Court Confirms

The U.S. Virgin Islands Supreme Court upholds a 2021 law to replace the Water and Power Authority’s governing board, a decision that could be positive for fighting authority.

“This is clearly the first step in reforming operations at WAPA,” Muni Credit News publisher Joseph Crist said last year after the Supreme Court’s earlier ruling. “The existing structure along with the policy has not solved the problems of WAPA. If the new board is open to change and not tied to the status quo, there is a huge opportunity to affect real improvement in the energy system and economy. must be credit positive.”

“This is a step in the right direction, and I will continue to push for reform,” said Senate Majority Leader Kenneth Gittens, one of the authors of the legislation. “We finally have a decisive victory for ratepayers, and we can continue to push for greater utility accountability.”

The court issued its decision Tuesday, upholding Act 8472 2023 decision of the Supreme Court of the Virgin Islands.

The law requires board members to have extensive knowledge in energy, technology, economics and finance; reduces to seven of nine members; and repeals the requirement that three members of the governor’s cabinet sit on the board.

In 2021, Governor Albert Bryan sued, claiming the law violated his prerogative to appoint whomever he wished to the board.

Neither Briana nor WAPA immediately responded to a request for comment.

In other WAPA news, the utility said earlier this week it had successfully tested Wärtsilä engines at its St. Thomas power plant. The integration of the engines has been delayed for two years, but their introduction should take place allow the unit to run on propane, which is significantly cheaper than the oil it currently burns.

The authority hopes to start using the engines full-time in December or January, and is now using them for a long day.

As of May 31, the power system had liabilities, including restricted assets, of $562.2 million. It had $178.6 million in electric system revenue bonds due in more than 12 months, plus about $20 million in bond principal and interest due in the next 12 months, and 1,157 billion of US dollars in total liabilities.

Moody’s Ratings withdrew its Caa2 rating on WAPA and Fitch Ratings withdrew its CC rating in 2023, citing a lack of up-to-date audited financial information. The data for May 31 have not been verified. Moody’s and Fitch declined to comment for this story.