(Source: The Virgin Islands Daily News)
By Michael Todd, The Virgin Islands Daily News, St. Thomas
Oct. 01--ST. THOMAS -- The V.I. Water and Power Authority governing board approved on Friday extending its $10 million credit line and a $3 million fuel hedge credit line with Banco Popular until Dec. 31.
Both credit lines expired this summer, said WAPA chief financial officer Joseph Boschulte.
Keeping the credit lines active will allow the utility and Banco Popular more time to finalize a longer-term agreement and possibly better rates for both lines of credit.
The extension will help the authority better manage its operating expenses amid volatile fuel prices, "namely, our ability to pay HOVENSA on a timely basis," Boschulte said.
WAPA Executive Director Hugo Hodge Jr. said the current credit lines were established when oil cost $30 to $40 per barrel
"Because the price is now almost three times the amount it was at that time, it's important we increase the working capital limits to ensure we have the flexibility to work under the current conditions," Hodge said.
This week, when WAPA petitioned the V.I. Public Services Commission to reduce the Levelized Energy Adjustment Clause rates for electricity, the utility anticipated that per-barrel oil costs would be $115.45 from October to December.
The amount of the increase to either line of credit has not been finalized, said WAPA board chairwoman Juanita Young.
The utility's billing cycle requires a strong line of credit, Young said.
"Oil is bought from HOVENSA in month 1 to produce electricity. Customers are billed in month 2. Customers then pay in month 3, but the authority must pay HOVENSA sometime between the end of month 1 and the end of month 2," Young said.
Board members Young, Gerald Groner, Donald Francois, Noel Loftus, V.I. Licensing and Consumer Affairs Commissioner Wayne Biggs Jr. and V.I. Energy Office Executive Director Karl Knight attended the meeting. Vice Chairwoman Brenda Benjamin, board member Cheryl Boynes-Jackson and V.I. Department of Planning and Natural Resources Commissioner Alicia Barnes were absent.
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