ENERGY
tHE iNDUSTRY AT A GLANCE
The energy and utility industry is constantly evolving, with new technologies, regulatory demands, infrastructure challenges, and public accountability requirements shaping the way companies, agencies, and instrumentalities operate. At McChain Hamm & Associates, we provide legal counsel to utility companies, government entities, energy providers, developers, and businesses operating within the energy and utilities sector.
Our attorneys help clients navigate regulatory compliance, contracts, permitting, procurement, development, disputes, and other legal issues that arise in this complex and highly regulated industry. Whether supporting an established utility, a new energy provider, or a business working with utility companies to diversify energy sources, we provide practical legal guidance grounded in experience and an understanding of the Virgin Islands’ unique energy landscape.
Energy and Utilities
the usvi energy sector
In 2017 hurricanes Irma and Maria damaged the electric distribution lines and power generating units. In the U.S. Virgin Islands, residents and businesses receive energy through a system of two fossil fuel power plants made up of combustion and steam turbines running on fuel oil and propane, seawater desalination plants, several solar power facilities, substations, undersea cables, and over 1,000 miles of transmission and distribution cables. St. Croix and St. Thomas maintain their reserves and backup generation units and are on two separate power grids. This infrastructure provides electricity to an estimated 107,000 territory-wide resident population, 45,000 residential, and 9,000 commercial customers across the principal islands. The USVI Water and Power Authority (WAPA) owns and runs most of the energy infrastructure. The U.S. Virgin Islands imports petroleum products to run the energy system; it has no fossil energy reserves, some renewable energy resources “mainly solar.” WAPA’s electricity rates are among the highest globally and are almost three times higher than average rates throughout the United States. This is partially due to old and inefficient fossil fuel power plants which make up a significant amount of the USVI’s power mix. Combined with a historically unreliable power grid, destruction from recent hurricanes, and a decrease in solar and battery storage costs, many customers are installing independent generation systems that use renewable energy technology.
legal support
With this as the current state of the USVI energy sector and a goal set by the Government of the U.S. Virgin Islands in 2010 to reduce fossil fuel consumption by 60% in 2025, there is a focus on increasing the energy system’s resilience and reliability. In addition to replacing WAPA’s aging generators with more efficient units and expanding the use of renewable energy, the USVI will likely be facing significant regulatory reforms to catch up to the best practices in the energy industry and adapt to new technologies. As energy and utility companies in the USVI adapt to the forthcoming regulatory changes in the territory, we remain ready to assist new and existing clients to navigate these changes and ensure compliance.
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