Business View caribbean - Aug 2023

30 BUSINESS VIEW CARIBBEAN VOLUME 10, ISSUE 8 These planned outages, though meticulously scheduled, do come with challenges. Balancing the immediate needs of nearly 55,000 customers against the long-term integrity of the entire system is a demanding task. Yet, the Authority remains committed to its approach, recognizing the essential nature of these interventions. Smith elaborates on the delicate considerations at play: “We try to avoid the disruption not only to our electric customers but our water customers when we have to do maintenance and repairs and upgrades to our system. But unfortunately, sometimes that’s just not possible because of the way the system can be configured. The other reason is for the safety of our employees, depending on the work that they’re doing, it may not be safe for our employees to work while the system is actually functioning.” While acknowledging the inconvenience caused by the power outages, the transparency and forethought of the Authority in notifying customers well in advance reflects a conscientious approach. Navigating the Energy Landscape: Propane, Diesel, and the Future of Power in the Virgin Islands Electricity rates can serve as a barometer of economic vitality, reflecting the complex interplay of supply chains, regulatory landscapes, and technological advances. Within the Caribbean, and particularly in the Virgin Islands, the challenge of managing energy costs takes on unique contours. “The nature of the systems that we operate in the Caribbean will never be as cost-effective as a mainland system,” Smith pointedly observes. This geographical reality shapes an energy landscape where VIWAPA has found itself grappling with some of the highest electricity rates in the world. At the heart of this energy challenge is the delicate balancing act between propane and diesel. Smith explains: “About 80% of that is from burning propane. About 20% of that is from burning diesel. Diesel is very expensive relative to propane. It’s currently about double the cost of propane.” Recent challenges with the propane supplier led to a situation where the Authority had to operate almost entirely on diesel for six weeks. This phase, characterized by significantly higher costs, catalyzed a critical acquisition. “We were successful in negotiating the acquisition of that propane supply infrastructure from the owner,” Smith remarks. This move towards control over propane infrastructure reflects a significant stride in the Authority’s quest to bring down energy costs. The new generation of generators from manufacturer Wartsila represents another piece of the energy puzzle. “When those generators are in service, we will be burning essentially 100% propane,” Smith adds, shedding light on an ambitious plan that aims to reduce costs and increase efficiency. Despite VIWAPA being previously the most expensive utility provider in the Caribbean Basin, this strategic alignment with the government has yielded tangible benefits. “The average rate increase in the Caribbean is 50%,