Virgin Islands FIT Act supports small biomass, renewables

By Anna Simet | June 12, 2014

U.S. Virgin Islands Gov. John deJongh has a bill that will allow residents to construct renewable energy projects and sell the electrical output to the local utility, the Virgin Islands Water and Power Authority (WAPA).

Today, the U.S. Virgin Islands are nearly 100 percent reliant on imported fossil fuels. On average, retail electricity prices hover around 50 cents per kilowatt hour for electricity, quadruple the average of residential customer costs in the contiguous U.S. High electricity costs were exacerbated by the 2012 closing of the Hovensa oil refinery in USVI’s St. Croix—the only one on the island and one of the largest in the world, once employing about 1,200 people.

Over the last several years, the island has made a push toward renewables and modernizing its grid, beginning with enactment of a renewable portfolio standard in 2009. The RPS requires 25 percent renewable electricity by 2020 and 30 percent by 2025, after which there must be an annual increase until a majority of the generating capacity of WAPA is derived from renewable or alternative energy technologies.

Under the newly signed FIT Act, power purchase agreements with WAPA will be awarded on a first-come, first-served and range from 10 to 30 years. The Public Service Commission will set tariff rates will be set according to renewable energy type, project size and location. WAPA will be required to purchase an aggregate capacity of 10 MW on the islands of St. Thomas, St. John, Water Island and other offshore keys and islands, and 5 MW from St. Croix.

Projects are required to be larger than 10 kw and smaller than 500 kw, “to allow as many entities as practicable to receive benefits accorded by the FIT program”.