HOVENSA and WAPA

You may have seen this article from St. Thomas Source, also posted on our website: http://stthomasre.com/st-thomas-virgin-islands-news/governor-slams-hoven...

This is a very serious issue, and I couldn't be happier that the Governor is fighting hard for the people of the Virgin Islands.

I have spoken to many people on St. Croix about their current state since HOVENSA announced their closure. It isn't good. From what I understand, there is (and will be even moreso) a huge inventory of homes for lease. Owners that have invested in properties, and relied upon the continued contractual business of HOVENSA on the island, will feel a lot of pain if they can't keep their homes rented.

Let me say that, like most other people in the community, I am not privy to the agreement in place between the VI government and HOVENSA. Therefore, I cannot state that the Governors assessment of the contract is correct. I can, however, use logic and common sense to know that a large Corporation is not granted tax benefits like they were without giving a committment to the territory. So I would be quite surprised if his understanding is not correct.

With that being said, it is critical that the VI keep this facility in place and in business. There are way too many jobs in jeopardy. There is was too much economic benefit to the territory (and especially those on St. Croix) without HOVENSA operations. But one of the scariest repercussions will be in WAPA costs.

Can you imagine if WAPA continues to escalate due to the higher cost of oil? Increasing rates even further, with estimates being 20-25% higher than right now? WOW. This would be incredibly burdensome to business owners and all other residents alike. I think about my own situation:

office power, at this estimate, would go up from approximately $500 per month to $600 per month

home power would go up from approximately $250 per month to $300 per month

Two rental properties would go up from approximately $300 per month to $375 per month

So, just in these particular cases, my power costs alone would increase approximately $225 per month. Or $2700 per year. That is really significant, and does not consider the likely increase in cost of gas for automobiles. This is just based upon WAPA.

But it doesn't stop there. Real Solutions does a lot of vacation rentals, where utilities are included. There is no choice but to pass on the cost of such to vacation guests (and this will be the same with all other vacation rental properties on island). The loss of rentals due to higher prices is a real worry, as other destinations do not have the super high cost of electricity that we pay down here. So this could be a disaster for the local economy and its people.

Thank you GOvernor for fighting for us, and I really hope you make headway with this extremely important issue.