PSC To WAPA: You Do Not Have The Authority To Raise Base Rate

ST. CROIX — The Public Services Commission said on Thursday that WAPA did not have the authority to go ahead with a planned February 1 base rate increase that would raise some $14.5 million for WAPA annually, while raising the power bills of about 29,000 WAPA customers anywhere from $16.21 to $1,115.98 monthly.

In its release, the PSC said it had received WAPA’s January 31 Petition for Reconsideration, which challenges the PSC’s January 26 action rescinding the January 12 approval of an interim base rate increase. By law, according to the PSC, the filing of a petition of reconsideration results in a stay on a PSC’s order for up to 30 days.

As a result of the filing of the reconsideration petition, the January 26 PSC order rescinding the approval of the interim base rate increase, is stayed, while the January 12 order authorizing the increase remains in effect temporarily, according to the release. If the PSC does not act within that 30 days (ending March 2), the petition is deemed denied by operation of law, the stay is ended and WAPA would no longer be entitled to bill any increase based on the January 12 order after March 2, according to the release.

“If WAPA intends to proceed with that rate increase, we assume that WAPA intends to fully comply with the Interim Rate Agreement and Base Rate Increase Preconditions,” said the PSC.

According to the release, at present time the PSC has received the completed IRP – one of the preconditions. The PSC said it had not received any evidence that WAPA has complied by submitting an executed lease extension for Unit 25 for not more than 1 year, an executed lease for Unit 26 with a notice to proceed, an executed lease/purchase of 3 – 7MW Wartsila units, and the order that WAPA shall issue an initial RFP to procure additional generation as described in the IRP.

“Without submission of such evidence, which is a prior condition to the implementation of the new rates, there is no authority for WAPA to implement the $14.5M rate increase,” wrote the PSC.

A statement was issued from the PSC to WAPA that they must comply with the IRP and submit the required evidence, or issue public notice that the rate increase will not be going into effect at this time, PSC said. It is reviewing the petition for reconsideration, and will continue to act deliberately, prudently and reasonably based on facts and the law before it, the release concluded.

Meanwhile, in a separate press release also issued today, WAPA said it had implemented the base rate increase on Wednesday, contending that the PSC had unlawfully rescinded its prior approval.

“The rescission of the rate increase violated the Sunshine Act and the ten-day statutory notice requirement that the PSC must comply with before holding a meeting on an issue. The PSC also acted in violation of previous Superior Court rulings WAPA obtained in 2006, requiring a ten-day notice of a PSC meeting be given to WAPA along with the opportunity to be heard at meetings of the commission,” Mr. Rhymer said.

WAPA said contrary to what was published by the PSC in the newspapers as a Letter to the Editor, the authority does not challenge the right of the PSC to set rates. Instead, the utility challenges the right of the PSC to deny WAPA its due process rights when the PSC takes actions that are contrary to the rule of law.

“WAPA is committed to bringing about meaningful change in the cost of electricity. We are on that path with a plan to introduce new, more efficient, reliable and right-sized generators to our power plants. What leaves us all at a loss is the about-face the PSC did on January 26th when it reversed the rate increase it granted to WAPA two weeks before — the same rate increase the PSC and its consultants signed off on last November 4,” Mr. Rhymer said.

According to WAPA, this week’s news release and editorial by the PSC failed to acknowledge that the vote to rescind the rates granted on January 12 stemmed from the fact that commission members became angry when the Authority filed a petition asking the PSC to reconsider a LEAC order the commission had entered in December last year.

“That is what has brought us to this juncture—the anger of the commission at the Authority for exercising its lawful right to appeal a PSC decision—through the filing of a petition for reconsideration. This process is similar to appealing a court decision. A verdict or judicial ruling can be appealed, in this instance, any PSC decision is subject to appeal or reconsideration by WAPA through the filing of a petition for reconsideration. It is the due process afforded the regulated company, by law,” Mr. Rhymer said.

On Thursday, Rhymer again outlined the anticipated changes that customers will see in their monthly bills, given the base rate adjustments that took effect on February 1:

For all residential customers, the interim rate increase would only apply to consumption of more than 250 kilowatt hours. The first 250 kilowatt hours of usage, while not affected by the interim base rate increase, will undergo a $7 increase resulting from the transfer of LPG-related charges to the base rate from the LEAC. The LPG related charges include maintenance and infrastructure fees, reflecting the substantial completion of LPG facilities in both districts. 

• For those residential customers who use 251 or more kilowatt hours per month, the increase will average about $16.
• The average commercial customer utilizing 1,200 kilowatt hours per month will experience an increase totaling about $78.64. 

“While the PSC attempted in its press statement to mischaracterize decades of old history between WAPA and the PSC, it failed to point out that WAPA has consistently prevailed in court over the last 40 years when it challenged the unlawful actions of the PSC. Now the Commission and WAPA must put differences aside and work together for the benefit of the territory,” Mr. Rhymer said.

He said Governor Kenneth Mapp summed up the issue at hand succinctly in the annual State of the Territory Address this week, when the chief executive suggested that a three to five cents per kilowatt hour increase simply cannot stand in the way of WAPA’s progress when rates have decreased by some 45 percent over the last two years.

The 45 percent decrease in rates experienced by WAPA’s customers since 2015 is due to not only fluctuations of the world oil markets, but also with WAPA introducing the lower cost LPG to the electricity rates long before either power plant was ready to burn propane to generate electricity, according to the release.