Taxpayers Shouldn’t Foot the Bill for USVI Solar Boondoggle

For Immediate Release              Contact: Abigail Graham: (202) 417-7235

June 8, 2022       

Washington, D.C. – In a letter sent today to Republican Leaders on two House and Senate Committees overseeing the Federal Emergency Management Agency (FEMA), the Taxpayers Protection Alliance (TPA) has expressed their deep concerns regarding the oversight of hundreds of millions of U.S. taxpayer dollars given to the U.S. Virgin Island’s Water and Power Authority (WAPA), a public utility. Despite the federal largesse, WAPA is demanding more federal tax dollars pay for its transition to 100 percent solar power generation, while, at the same time, failing to pay its largest creditor who paid all up-front costs to build a clean, affordable, and reliable source of propane gas generation to power the USVI electric grid.

Over the past half-decade, the U.S. federal government, specifically FEMA, has provided nearly $1.5 billion worth of subsidies to WAPA. Yet, WAPA is failing to make pension contributions, stiffing creditors and demanding U.S. taxpayers pay for the USVI’s transition to solar.

The following statement can be attributed to Patrick Hedger, Executive Director of the Taxpayers Protection Alliance:

“American taxpayers should not be asked to fund a solar boondoggle for the U.S. Virgin Islands while WAPA fails to pay its debts, stiffs creditors, and ignores its required pension contributions.”

Biden Administration Solar Boondoggle in U.S. Virgin Islands

• In March 2022, USVI Governor Albert Bryan announced his intention on transitioning the island of St. Croix to be 100 percent solar-powered. The Governor said a plan would be released “in a matter of months” but to date, there has been no public plan presented. WAPA CEO Andrew Smith recently testified that “right now, our focus is entirely on generally getting solar on the island of St. Croix and getting it on the island quickly.”
• Governor Bryan now expects more financial assistance, specifically from the U.S. DOE for the buildout of solar. WAPA CEO Andy Smith believes that the solar buildout would be “effectively free”, largely because he believes the federal government would subsidize the project.
• USVI only has limited electricity generation from solar power, so a rapid build out of the Island’s solar capabilities would be incredibly cost to federal taxpayers.

What is WAPA Hiding from the American Taxpayer?

• The Utility has failed to repay $180 million in debt obligations to its largest creditor, Vitol, a Texas-based energy company.
• WAPA has $388.7 million in total outstanding obligations, including $50.8 million in debts owed to Puerto Rican banks.
• WAPA has failed to make payments on contributions to the USVI Government Employees Retirement System (GERS), resulting in a $7.7 million lawsuit from GERS. These retiree contribution funds, according to WAPA, “were inappropriately utilized to help the Authority offset and manage operational expenses.”
• In May 2022, Fitch Ratings reaffirmed WAPA’s negative credit rating, noting the “heightened default risk as a consequence of WAPA’s weak operating fundamentals, cash flow and liquidity.”

It’s a disservice to U.S. taxpayers to pay for this solar boondoggle until WAPA gets its house in order and pay its debts. There is no free lunch.

More alarming, WAPA owes $50.8 million to Puerto Rico banks. A significant portion of these bank paymentsmust be made by July 31, 2022. Taxpayers deserve answers as to where the FEMA money currently sits and why WAPA is refusing to repay its creditors.

For media requests, please reach out to abigail@protectingtaxpayers.org.

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Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy.