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Company makes pitch for new St. Croix power plant

-Caribbean Energy Resources claims WAPA is blocking $179 million industrial project from moving ahead

Tuesday, June 22nd 2004
The Virgin Island Daily News

ST. CROIX – The Senate Labor and Veterans Affairs Committee heard testimony Monday on a proposal for a $179 million industrial complex that includes plans to construct a waste-to-energy power plant on St. Croix and claims the potential to create more than 700 jobs.

The Public Services Commission granted Caribbean Energy Resources certification as a small power provider in February, paving the way for the company to build the power plant on St. Croix and sell its power to the V.I. Water and Power Authority.

The project calls for the construction of an externally fired combined cycle electrical generator that would use petroleum coke as its primary fuel. The ash byproduct from the process would be used to manufacture gypsum board – a building material used to make products like tiles and wallboard.

The company still has to obtain permits to construct the complex, but if its plans move forward, Caribbean Energy Resources could become a supplemental energy source for St. Croix and sell power to WAPA in emergencies and times of high demand.

Caribbean Energy Resources Chief Executive Officer George Wronge said those plans are being blocked by WAPA’s refusal to negotiate a power purchase agreement. Without that agreement, he said, the project will not be economically viable.

“We are prepared to move forward on this island yesterday,” Wronge said.

WAPA Executive Director Alberto Bruno-Vega and members of the governing board were out of the territory Monday attending a conference, but Chief Operating Officer Glenn Rothgeb represented the utility company at the hearing.

Rothgeb said WAPA plans to go out for competitive bids on the supply of power and is currently in discussions with several companies. Caribe Waste Technologies is the only other company certified by the Public Services Commission as a small power provider.

WAPA had engaged in discussions with Caribe Waste Technologies two years ago, Rothgeb said, but no progress was made. WAPA officials argued that the utility company was capable of meeting the territory’s power needs.

Caribe Waste Technologies has proposed building a waste-to-energy plant that uses a process called gasification. The plant would take all of the territory’s garbage and subject it to intense heat, creating a gas that would be burned in generators, producing electricity and desalinated water.

Caribbean Energy Resources Corp. is based in Miami with operations offices in Tega Cay, S.C. As proposed, the $179 million industrial complex on St. Croix would be constructed in three phases. Chief Operating Officer Norman Kotraba said the entire project would be paid for with private funding.

“We are not requesting one red cent from your government,” Wronge said.

Wronge said the V.I. corporation, USVI Eco-Industrial Complex, would be the vehicle for the project’s construction and operation.

Since the alternative energy proposal first was pitched to WAPA in April of last year, Wronge said, his company has met with the V.I. Port Authority about leasing property at Molasses Pier on St. Croix’s south shore, adjacent to HOVENSA, for the project site.

Kotraba said the company also has met with HOVENSA officials and was assured that an adequate supply of petroleum coke for fueling the plant would be available. He said an agreement with HOVENSA is in the works.

Petroleum coke is the waste product of refining crude oil, but it also can be used as a partial substitute for coal in utility power generation.

The first phase of the proposal includes the construction of a gypsum building block plant and a gypsum ceiling tile plant. The second phase involves the development of a steel manufacturing plant, and the third involves the creation of a micro-steel mill for the production of specialty steel products such as surgical instruments, hand tools and alloy piping.

Wronge said the project would create 777 permanent jobs on St. Croix and 500 jobs during the construction phases. Those jobs would be in addition to 2,700 jobs created through outsourcing to local suppliers and contractors, he said.

Planning and Natural Resources Commissioner Dean Plaskett said the company would have to obtain several permits before construction could begin and demonstrate ownership of property. The company also would have to show its plans for sewage disposal and conduct studies on the project’s impact on plant species and wildlife in the area.

Plaskett said zoning is not an issue because the proposed site already is designated as an industrial area.

“The economic impact of the industrial complex could be positive for St. Croix’s economy,” Plaskett said. “The department will undoubtedly play a pivotal role in ensuring that the complex does not add to the environmental degradation of the island.”