Virgin Islands public utility WAPA CEO resigns

Amid increasing signs of financial and operational distress, the U.S. Virgin Islands Water and Power Authority board Monday announced CEO Andrew Smith will resign, effective June 30.

The WAPA board held an emergency meeting Friday afternoon to deal with several topics. Nearly the entire meeting was held outside of public view but at least two local news outlets said there were rumors this weekend that Smith had resigned.

On Monday morning the board, in a statement signed by WAPA board Chairman Kyle Fleming, announced Smith's resignation and said it is seeking a replacement.

According to unaudited figures, as of September WAPA had $15 million of current liabilities on bonds, $470 million of current liabilities, $179 million of long-term electric system review bond debt, $284 million of total long-term debt, and $1.081 billion of total liabilities. WAPA has not made more recent unaudited figures available.

"Legislation was passed that requires a turn-around company hired for WAPA," said former Virgin Islands Sen. Kurt Vialet. "What powers will the turn-around company assume? We can only pray that we emerge better than before."

Smith was hired in January 2022. In the preceding year all WAPA's top officials had either resigned or been dismissed. Some of these roles, like that of chief financial officer, still only have an interim head.

The U.S. Virgin Islands have had high levels of power outages for years and these have become more frequent since mid-April.

On April 22 Gov. Albert Bryan Jr. declared a state of emergency to allow him to forward money from the island's rainy-day fund to WAPA for critical bills. Among these was $4 million for a bond service payment due that week. Two semi-autonomous government hospitals and a government waste management facility owed WAPA $11 million, the governor said.

On May 22 Bryan extended the state of emergency for 30 days.

In May, a court froze one of WAPA's two operating cash accounts at the request of creditors. On May 23 one of the WAPA board members said the authority's financial situation was the worst he had seen it in 30 years.

At Friday's board meeting the board voted 4-1 to extend the deadlines for a settlement with fuel and fuel infrastructure supplier Vitol.

Upon completion of the deal, WAPA will gain ownership of the propane storage facility. Doing this is "absolutely critical to the energy security of the Virgin Islands," Smith told the board in September. The facility will allow the authority to use more lower-cost propane rather than higher-cost diesel to generate electricity.

On May 28 Virgin Islands Office of Managemant and Budget Director Jenifer O'Neal confirmed a mid-July 2024 closing on a federal grant needed to complete the Vitol settlement.

None of the rating agencies rate WAPA's bonds. In December Fitch Ratings withdrew its CC rating on the electric revenue bonds due to lack of information.