WAPA Crisis Deepens as Gov't Debts Exceed $24 Million; OMB, Dept. of Finance Subpoenaed to Testify

During an emergency hearing of the Senate Committee on Budget, Appropriations and Finance on Thursday, lawmakers were left stunned by the news that the Water and Power Authority is owed over $24 million for water and electrical bill payments from a lengthy list of public and private sector debtors, including the federal government.

At the beginning of the week, before announcing a local state of emergency because WAPA’s financial woes had begun to impact the provision of power in the territory, Governor Albert Bryan Jr. singled out three semi-autonomous agencies who owe WAPA a combined $11 million. However, WAPA Interim Chief Financial Office Lorraine Kelly rattled off a long list of additional debtors during Wednesday’s Senate hearing.

Among them are the U.S. Post Office which owes $360,000 and is two months past due, the U.S. Army Corps of Engineers is eight months past due and owes $10,000, and the V.I. National Guard which racked up debts totaling $781,000 over the course of six months of non-payment. The V.I. Housing Finance Authority, when threatened with a disconnection notice, paid $1.2 million in arrearages, but still owes some $2.4 million to the authority. The Department of Education, Bureau of Motor Vehicles, Public Defender’s Office, Supreme and Superior Courts, and Office of the Lieutenant Governor were also among the public entities indebted to WAPA, Ms. Kelly disclosed.

WAPA CEO Andrew Smith told lawmakers that Ms. Kelly’s summary was accurate for the period ending February 2024, and “has not changed materially since then.” Past due amounts owed by WAPA’s largest customer – the Government of the Virgin Islands – currently stand at over $24 million. That figure, Mr. Smith noted, surpasses the authority’s typical monthly revenue of $21-$23 million, and said that payment performance began to decline last June. The arrearages put WAPA in a difficult situation, Mr. Smith said, because whereas the threat of disconnection is an effective disincentive for individuals and private businesses to rack up large past-due amounts, “WAPA cannot disconnect customers that provide critical services in the territory – the hospital for example.”