, 1963-10-26

Ito state a few facts.
The growth Of the Virgin Islands during the past few years is
reflected in the increased amount of electricity needed each year.
Congress has now repeatedly refused to appropriate funds to provide
for the capital expansion for generating capacity. This has resulted in
a serious condition. Realizing the importance of this situation, the
Board Of Directors Of Vicorp, after considerable discussion on this
decision was one which should be made by the authorized represen-
Iatves q 2 people OF n virgin Islands themselves--tne elected
Legislature and the Governor. This is IN concept of both permitting
and encouraging the citizens Of the territories to make their own de-
cisions in matters directly affecting their own welfare.
In addition to the above, there are other basic reasons against
the Chamber of Commences proposal The first Of these is the fact
that no comprehensive study has as yet been made by a competent
Engineering firm to determine whether such a proposal is sound.
There are many factors to consider, such as the separation or break
ling up into separate parts of an already integrated system with a
standard rate base throughout the Virgin Islands. If this pattern had
been followed by the telephone rates for St Croix would be at
least fifty per cent higher than they are at the present time, with
a substantial reduction of the St Thoma as rates. This fact
was brought out during the rate determination by the Public Utli-
ties Commission and a policy decision made to consider the system
as a fully integrated one.
The base load factor, peak load and total XIV consumption of St,
Thomas is about double that of ST. Croix; and with concentration of
ST. Croix, which is widely distributed over a large area, the separate
" established rates would probably increase the st. Croix rate to
consumers overthe consumer rate for ST. Thomas. In addition to this,
the cost OF fuel is an important factor IN cost determination OF XIV
generated. The fuel cost in st. Thomas is almost half the price of the
St Croix cost because of the availability Of bulk fuel from large
tankers in ST. Thomas. Another factor is the rate of interest paid
for the capital needed to finance an integrated system which adds
to the Investigation of its customers than to do SO on a separate
plant for 81. Croix. These are but a few Of the important considera-
Itons which cause me to hesitate, even before expression to an even
more important and overriding reason which shall not state,
These Islands depend on several important items for its contin-
Eued expansion and growth. Two of these are water and power. If
these two commodities were controlled by a group Of individuals
who would like to choke off the development or expansion Of indus
try or refuse to invest more of their capital for needed growth, they
would hold in their hands the economic power to stHle and kill off
anything they did not wish to be established in st. Croix. I have
seen these some men who now propose to take over the power on
st. Croix try to prvent the economic development Of THU. island;
and, as Governor, ! do not propose to let this happen to Power.
There has never been any lack for firms which are willing to
take over the profitable parts of Vcorp. However, if after the COM
prehensive survey is made by a firm. Of competent engineers and it
recommends to me, for some unknown reason, that the power be
sold to q private utility, and such a determination is agreed to by
the Legislature and the Governor, I will insist that the system be
kept as a fully integrated unit and that its disposal be done by the
regularly established procedure Of public bidding with all the neces-
sary safeguards to protect the consumer and the Government. It is
possible that a joint kind of operation between Government and pi
waite utilities similar to certain foreign joint ventures may develop.
However, t. is too early at this stage to determine the best course
Ito follow before the comprehensive survey is accomplished.
You may be interested to know that a power unit for st. Choix
has been recommended to be ordered from the Worthington Co. i
had a survey made on this particular matter, and I quote:
Our preliminary analysis of presently available choices for an
additional source Of power for ST. Croix is submitted at this time
because of the need for a prompt decision on the best course to follow
Expected load growth requires additional capacity in st. CFox be-