The U.S. Virgin Islands Water and Power Authority plans to execute a major solar energy deal in October to help insulate itself from fossil fuel price spikes.
WAPA Chief Executive Officer Andrew Smith said the authority, after considering proposals from several companies, is particularly interested in two companies that would install solar panels and batteries for storing electricity on St. Croix.
At a monthly WAPA board meeting, Smith said he hopes the system will cover 45% to 70% of the electrical load on the island. While the electricity would only serve St. Croix, which is about 42 miles from St. Thomas and St. John, it would affect the electric rate for all the islands, Smith said, since WAPA sets one rate for the entire territory.
Earlier this year, Gov. Albert Bryan Jr. said St. Croix should transition to being supplied 100% by solar energy, since it’s a cheaper and cleaner power source.
Moody’s Investors Service said in August the authority’s high fuel costs, which were not being immediately passed on to customers, were a credit challenge. WAPA’s senior bonds are rated Ca2 by Moody’s Investors Service and CCC by Fitch Ratings.
WAPA hopes to have a proposed power purchase agreement ready for the board in October, Smith said.
St. Croix will be the first island to try solar because it is flatter than the other two main islands.
Whichever company is picked for the St. Croix project would build, operate, and own the facilities. It would sell electricity to WAPA as part of the agreement.
In deciding which company to enter into a contract with, Smith said, the authority was considering price, the company’s potential performance, and the existence of buy-out options.
Smith said Leeward Energy seemed to be the best offer at this point because it was offering the lowest price, could serve a significant annual load, had panels and storage in inventory, and could potentially be in service in 12 months. It is offering WAPA a 13.9-cents per kilowatt hour 30-year levelized cost of energy.
He said VIElectron LLP recently submitted an attractive proposal for St. Croix solar and batteries, which the authority is considering alongside of the Leeward Energy proposal.
Smith said WAPA would have to maintain a fossil-fuel backup generator on the island to cover periods of extended cloud cover.
WAPA is also exploring bringing wind power to St. Thomas and St. Croix, Smith told the board.
The presentation on Thursday was just informational, with no board decision.
In March, WAPA’s electric system had $470 million long-term debt, of which $213.4 million was bond debt, according to unaudited figures WAPA posted to EMMA. It had $1.275 billion in total liabilities and $468.2 million in net assets. Total current liabilities were $435.9 million.