Virgin Islands Power Bills Rise 3 Cents as Fuel Costs Surge Past WAPA's Limits

Electricity rates in the Virgin Islands will climb by three cents per kilowatt hour through the end of the year after the Public Services Commission voted to grant the Water and Power Authority relief from soaring fuel expenses.

WAPA CEO Karl Knight told commissioners that the utility has reached a breaking point. Diesel prices have nearly doubled since January, jumping from $1.99 to $4.57 per gallon by early October. Propane has climbed from 58.5 cents to almost 92 cents per gallon over the same period.

Despite cutting fuel transportation costs by more than 46 percent for diesel and over 17 percent for propane, and adding solar generation at 11 cents per kilowatt hour, WAPA has still lost ground. The utility has absorbed roughly $21 million in unrecovered fuel costs since July 2025, Knight explained to the commission.

Equipment troubles have worsened the financial strain. Unit 15 at the Harley plant failed in February, forcing the authority to burn significantly more fuel than planned. Unit 27 at Richmond has also malfunctioned. The newest Wartsila generators cannot yet run on liquefied petroleum gas as intended, and replacement units remain months away from service.

Knight warned that further spending cuts would cripple operations: deferred maintenance, unpaid vendor bills, and inadequate supplies for staff. Even with the three-cent increase, he estimated WAPA will absorb an additional four and a half cents in fuel costs through the end of the quarter.

PSC Consultant Julius Wright said the three-cent hike "appears to be well below their calculated fuel cost" and confirmed WAPA currently spends more than 25 cents per kilowatt hour to generate electricity.

Chair David Hughes acknowledged the macroeconomic forces at work but signalled caution about permanence. "Not really interested in it becoming a permanent part of LEAC," he said, indicating the commission will review rates each filing period against current fuel pricing.

The vote passed 3-1. PSC member Clement Magras objected, noting that a similar fuel surcharge for ferry companies had been rejected earlier. Non-voting ex-officio member Senator Carla Joseph also opposed the increase, citing WAPA's failure to submit audited financial statements. The commission waived the standard 30-day notice requirement, making the increase effective immediately.