Proposes Increases to Street Lighting Funding, Customer Fees Amid Financial Shortfall

The V.I. Water and Power Authority is seeking legislative support for a series of proposed fee and funding increases aimed at addressing its ongoing financial challenges.

During a Senate hearing on Monday, WAPA officials outlined potential changes that include raising the amount of property tax revenue allocated to street lighting, introducing an operating surcharge on customer bills, and increasing reconnection and initial service fees. The utility, which continues to operate with a monthly deficit of $2 to $3 million, says the measures are necessary to stabilize operations and ensure long-term sustainability.

But the authority has made strides. “This time last year, the monthly budget deficit was approximately $8 million a month. In September, that deficit was approximately $6 million per month,” WAPA Chief Executive Officer Karl Knight said, speaking before the Committee on Government Operations, Veterans Affairs, and Consumer Protection, chaired by Senator Avery Lewis. Now, the monthly deficit falls within the range of $2-$3 million. Despite this positive movement, WAPA remains buried under a mountain of debt.

Even so, the utility company's poor financial condition remains a cause for concern, particularly after a failure to meet critical vendor payments in 2024 resulted in increasing rolling blackouts for ratepayers. When Vitol signaled its intention to halt services for non-payment, the Government of the Virgin Islands was forced to bail the authority out of its predicament. The declaration of a power-related state of emergency allowed the GVI to make expedient decisions, diverting cash to the flailing agency in a bid to keep the lights on across the territory. “I don't think WAPA would have survived the year without government support.,” Mr. Knight told Senator Novelle Francis during the course of Monday’s discussion.