A Real Plan for WAPA

Warren Mosler's response to the article: Fonseca, Plaskett seek emergency declaration for WAPA; Roach disagrees, Gittens wants audit results

They don't have a full understanding of the WAPA problem which precludes a constructive solution. First, lowering the cost of power generation isn't going to reduce WAPA bills. It will only reduce the size of the USVI gov subsidy that covers WAPA's losses. The total cost of generation was reported to be .65/kw. WAPA charges only .43/kw. Gov kicks in .22/kw to cover the shortfall. Fuel costs are less than .22/kw so even if fuel is free it only reduces the gov subsidy. So all these proposed solutions to lower generation costs will not bring down your WAPA bill!

Second, there's no getting around the fact that a lot more money has to be spent on preventative maintenance which requires a high level of experience just to come up with a detailed comprehensive plan to do that.

This was caused by the PSC years ago when they refused a rate hike needed for maintenance. The commissioner said to me "We need to put WAPA's feet to the fire to force them to cut waste by not giving them the money." Depleting the maintenance budgets is not the way to cut waste as we've discovered the hard way. That has to be a separate initiative to get results.

Third, it's WAPA's fixed costs that have caused costs to increase disproportionately, including costs associated with the propane conversion fiasco that we're still paying for. What the then head of WAPA and the board chairman did was criminal but that's another story. In any case that and the consequent debt service continues to add to fixed costs.

Fixed costs per kw increase when power sales go down, and WAPA has been in a death spiral as high rates caused people and businesses to go off the grid leaving the burden of the same fixed costs to whoever remains on the ground. And WAPA policy continues to encourage this and make matters worse.

My proposals recognize these three aspects of the WAPA problem and address them head on. It's not a quick fix, but it will get us the desired outcomes. And my Citizen's Dividend will at least give a bit of needed relief to those struggling to pay their bills.