Urgent response needed - WAPA's Stakeholders Presentation for LPG
I recieved the following from the USVI Hotel & Tourism Association when I returned home this afternoon that I would like to share:
We need your response no later than 4pm today.
Good evening Board of Directors – Bill Newbold (Treasurer for STT/STJ BOD) and I attended a meeting at Government House this evening regarding a proposal WAPA has to convert the existing WAPA plant to be able to process Liquid Propane Gas (LPG) and Liquid Natural Gas (LNG) in addition to oil which it’s already processing.
In short, they would like to convert the existing WAPA plant to be able to process LPG and in phase two be able to process LNG. This will allow WAPA to utilize three source of energy to produce power (LPG, LNG and oil) versus the current status which is only using oil to produce power. This gives flexibility when markets for the aforementioned sources change in pricing and availability.
They are guaranteeing a 30% reduction in the LEAC (currently at 41 cents a Kw - meaning a 13 cent reduction based on today’s costs) by October of 2014 and it will reduce greenhouse gases by 20%.
Please see attached presentation. They are asking us for a public endorsement of the project. The STX Chamber and STT/STJ Chamber of Commerce were in attendance along with several Government Agencies. After the meeting, both Chambers stated they are in support but needed to verify with their BOD and membership.
WAPA Government House meeting notes:
- LPG is part of rebranding of WAPA
- Switch fuel from fuel oil to propane. Saving 30% on total cost. Reduces emissions and greenhouse gas by 20%
- In August a solar will be launched.
- Partnering with global energy company. Largest in the world. They pay for infrastructure build out estimated at $100 million. WAPA pays for monthly operations and maintenance. The capital is amortized over 5-7 yrs. Price for LPG is based on global index.
- Agencies that will be a part of the process:
o DPNR needs to assist with permits. Be on line Oct next year.
o Vi energy office
o DOL: It will create new jobs. 80 during the build and 20 full time on both districts
o Licensing and consumer affairs
o P&P. assist with temporary use of public land
o VITEMA. Advance planning on safety and disaster planning.
o BER to track efficiency.
o Fire service for emergency response.
o IRB. Ongoing importation of equipment.
o PA. They need their land.
- COC HTA DOT. We need public support
- Construction would start 4th quarter
- Oil, propane and natural gas will be used vs. one option now. Solar wind and bio fuels will be included
- We are at 41kw. It will reduce by 13 cents.
- LNG will start after LPG. 5 yrs estimated start time.
Thank you for responding as soon as possible.
USVI Hotel & Tourism Association
4002 Raphune Hill, Ste 304
St. Thomas, VI 00802
KEEP READING: Here is the attachment from WAPA. Sorry but couldn't insert the pie charts and renderings they created.
It is important to note that they expect to keep using 40% fossil fuel and that nasty "waste to energy" has crept back in there to supply
8%, with land fill gas 3% and biomass 2%.
They listed solar PV 1%, Solar water heating 2% and wind energy 6% and drumroll...energy efficiency at 38%
WAPA’S SWITCH FROM FUEL OIL TO PROPANE July 23, 2013
The high cost of energy is a major challenge to residents and businesses of the USVI
WAPA has launched a project to switch from fuel oil to propane as its primary fuel source for power generation
Switching to propane will reduce fuel costs by approximately 30% and decrease greenhouse gas emissions by about 20%
Provide general project information to identified stakeholders
Seek support and public endorsement
Expedite processing of requested authorizations or services
Get involved in advance response planning
The company will:
Engineer, design and develop the necessary state of the art infrastructure
Convert WAPA’s combustion turbines to support the fuel switch
Operate the new infrastructure
Supply propane for the production of energy
The company pays up front capital costs for infrastructure and turbines conversion.
WAPA is partnering with a global energy company
There will be no payment from WAPA until propane is used as primary fuel source to produce energy
The capital cost is amortized, at WAPA’s choice, over 5 or 7 years, with an option for complete repayment any time after the 5th year
WAPA will pay for monthly operations and a maintenance fee
The propane price will be based on market standard Mont Belvieu index
All new facilities will be constructed on existing WAPA property on St. Thomas and St. Croix.
Rendering of St. Croix onshore terminal
The 30% fuel cost reduction factors in all costs for construction, operations, maintenance and propane supply
WAPA fully owns the facilities and infrastructure after repayment
Afterwards, costs are limited to propane price based on Mont Belvieu index and O&M of storage and supply facilities
Need of Stakeholders
Department Planning & Natural Resources
Assist with expediting local permits, and to the extent possible, assist with federal counterparts, as applicable (Permit delays are one of the biggest concerns of the developer regarding project’s timely completion)
V.I. Energy Office
Further the understanding that the project significantly benefits the Territory and is consistent with the Territory’s overall plans going forward for future energy generations
Department of Labor
Meet with developer on front end and provide guidance to assure that developer knows, and adheres to, local labor requirements and uses local registries to avoid unnecessary public outcry on the back end (This company will be here for a minimum of 5 years and will require construction workers for the building phase and a labor force to operate and maintain the new infrastructure and facilities)
Need of Stakeholders Cont’d
Department of License & Consumer Affairs
Assist with expediting license processing and approval for specialized crafts, contractors, workers, etc. and other services under the purview of your Department
Department of Property & Procurement
Assist, on an expedited basis and at no cost, with temporary use of government- owned land for lay-down sites for material and supplies on STT & STX during the project construction phase and with acquisition of government-owned land if determined necessary to relocate any of WAPA’s operation or resources outside of plant sites
V.I Territorial Emergency Management Agency
Gain awareness of, and provide, advance planning and advance government coordinated training of potential hazards and management of any emergency response incidents (Public endorsement and support of the project are key to giving public a sense of comfort that the project is well designed and engineered with state of the art technologies and systems to protect public health and safety)
Need of Stakeholders Cont’d
Economic Research and Development
Assist with ongoing macro & micro statistical evaluation of the project’s impacts related to the lowering of fuel costs to WAPA’s customers and to the V.I. economy as a whole
Virgin Islands Fire Services
Commit to early involvement of fire services with orientation, planning and training for emergency response as the project is being developed, taking a proactive rather than a reactive approach as a lead emergency response agency (Public endorsement and support of the project are key to giving public a sense of comfort that the project is well designed and engineered with the state of the art technologies and systems to protect public health & safety)
Internal Revenue Bureau
Assist with expediting and processing of services related to IRB (There will be ongoing importation of equipment, machinery, and supplies for the project)
Need of Stakeholders Cont’d
V.I. Port Authority
Gain awareness of the project to ensure advance planning for services that will be required of the marine unit; expedite requests for services and assistance; assist, on an expedited basis, with temporary use of VIPA-owned land for lay-down sites for material and supplies on STT & STX during the project construction phase; assist with acquisition/lease of VIPA-owned land if determined necessary to relocate any of WAPA’s operation or resources outside of existing plant sites
Chamber of Commerce, Hotel Association & Tourism Department
Publicly support and endorse – as an organization and by your members – the project; encourage your businesses, colleagues, etc. to base their planning on the lower cost of electricity resulting from the project (We need to communicate the facts that WAPA’s use of propane as its primary fuel source will be a reality and will be a significant factor in revitalizing economic activity and creating more business opportunities in the Territory)
Employees’ and the public’s health and safety are protected with the best available systems and technologies
Environmental impact is considered at all times
No known adverse impact to environment
Air quality significantly improves
Construction is anticipated to begin in the 4th quarter 2013 and completed by the 4th quarter 2014
Project is consistent with the U.S. Virgin Islands’ long term energy goals
This project represents the best near-term option to significantly reduce the cost of fuel for power generation while ensuring widespread benefits for the Territory.
Your support and endorsement are needed!
They seriously need to make it all public because it affects all of us!
38% energy efficiency does not impress me. What about 90%?
Plus they are sneaking in "waste to energy" again which we already got shot down in a hard won battle.
Nothing has changed there to my knowledge? WTE? WTF!
I don't trust anything WAPA/Hodge or our VI Government does, sad to say.
They prove over and over again, they are completely inept and we continuously pay thru the nose for their lack of foresight, intelligence and diligence. not to mention, honestly and integrity.
According to a friend who knows:
"The VI should be able to rely on over 50% solar according to clean energy experts. Probably over 75 % with the right energy storage and grid management systems."
From a different source - Right now:
"Just 60 miles off the coast of Louisiana, a natural gas rig is burning out-of-control after the well blew-out.
The good news is that the 44 crew members were all safely evacuated. The bad news is that natural gas continues to leak from the well, firefighting vessels have not been able to get close enough to put out the fire, and the well has partially collapsed.
Natural gas should not play a role in our country's energy future. Instead of fracking in our communities, on our public lands, and off our coasts, we need to double down on clean energy like wind and solar. Although it is too early tell what kind of environmental damage this well blow-out and fire have caused, we already know the impact of fracking in communities across the country -- polluted air, poisoned water, and more climate pollution."
I think that a 40% continued reliance by WAPA on fossil fuels is ridiculous in this day and age tho I agree something must be done in the short term while we await the powers that be to make a proper decision on a long term solution. The 8% reliance on Waste to Energy concerns me. Bad idea, once again. Hodge and Cornwall, staunch defenders of Alpines WTE, have not yet giving up on their "golden parachute" for their retirement. Beware.
So as of today...market cost of propane, no freight is about $0.94/gallon in bulk trading US Gulf Coast, versus fuel oil that today was market cost $2.94/bulk gallon same coast location supply.
With the differential in BTU ratings for the two fuels...the equalized productive BTU cost of propane goes to about $1.26 versus the $2.94 or about a 60% operational fuel cost reduction...Btu to Btu.
According to WAPA...the next 5 to 7 years that the 58-60% differential will only be about 30% to the consumer, as announced in the papers and press....and that the balance difference is the structured costs to convert the operational fuel system to propane....which in all is probably a whole lot of money, millions of dollars...but nowhere is there any statement as to the estimated cost that the new facility storage and processing is going to be...with nothing stated about the huge fluctuations in the cost of bulk propane...let alone all the regulations for shipping, and storage!
Guess that there are still some missing values that will answer the total amount of the volume of gallons necessary to operate the system over those 5 to 7 years to get a cost of doing the operational system change.
I have no numbers for cost of transit between the gulf coast terminal and STX...but that should be fairly equal for either fuel.
This could be one great improvement for the islands. or one huge money pit for the management and government to issue purchase and build contracts to all the friends of the VI...and should have a citizens approval board to oversea the operations of the system...if not a USA government oversight team.
Wonder what type of bonus can be paid to the board for all their logic and cost improvements...!
Safety is also a major concern...although I am sure that the WAPA safety team has that fully under control...that fire in Florida, where I remember seeing the Blue Rhino transfer factory, just outside or Orlando earlier this week,....that was a huge boom and burn, and just from many thousand bbq style portable tanks...can not fathom what it would have been if it had been their fixed multi thousand gallon storage systems and not the portable tanks refill area!
That little 28-30% for the fuel conversion...can be a great management or government incentive to keep the conversion costs ongoing...5 to 7 is a huge window for something that should be a dead end date project...not a dart thrown at a yearly calendar and hope to be done with a 2 year window allowance.
I would guess that the government's utility balance owed for service supplied over the past couple of years could be paid for in full with the differential in a few months time....we shall see, although they say that they are making months payments to clear the books!.
In my humble opinion, WAPA needs to present some more reliable costs and figures to the public...they are dangling a minimal carrot of savings over the consumers face...but holding it with unknown costs and facilities conversions fees with large window of timing..
Continued relaince on fossil fuels by a large percentage will never lower our rates.
What about Heat Recovery systems and other more advanced technology to provide our power?
I noticed that WAPA included an 8% reliance on Waste to Energy system in their presentation to stakeholders. Did the People of the Virgin Islands not emphatically say "NO!" to this type of power generation presented by Alpine just a couple years ago?
Are they attempting to sneak this back in so more palms can be greased?
I hope that our Senators will do their homework, diligently and intelligently. According to a knowledgeable source: "The VI should be able to rely on over 50% solar according to clean energy experts. Probably over 75 % with the right energy storage and grid management systems."
Before any of this is done the VI Inspector General should submit a complete and up to date AUDIT of how WAPA is functioning and our money is being spent, at this present time. The People of the Virgin Islands deserve to know!
Here is a link that should be read: http://stthomassource.com/files/userfiles/file/misc/DOI-IG-WAPA-Report.p...
" The Virgin Islands is 100% dependent on oil to produce electricity. In comparison, only 1.6 percent of the electricity sold by stateside utilities is generated from oil."