U.S. Virgin Islands Utility Signs Power Purchase Agreements for $440 Million Alternative Energy Facilities

Skadden represented the Virgin Islands Water and Power Authority (WAPA) in its successful negotiation of two Power Purchase Agreements for 33 MW and 16 MW of electric power from refuse-derived fuel and petroleum coke co-fired facilities to be built on the islands of St. Thomas and St. Croix at a total cost of $440 million. The facilities were proposed in response to WAPA's request for proposals to identify options for power from alternative sources. Skadden advised WAPA in its preparation of the RFP and its negotiations with bidders.

The agreements were announced in a press conference held by Governor John P. DeJongh, Jr. on August 10. The Governor noted that the development of the plants represent "the first time in U.S. Virgin Islands' history that fossil fuel has not been used to generate electricity." Previously, the Virgin Islands primarily relied upon oil-fired generation to meet its electric power needs, leaving it exposed to volatility in oil prices. In addition to reducing dependence on oil, the facilities also are projected to utilize all the municipal solid waste produced on the islands, which will help alleviate mounting solid waste disposal concerns.