New CEO Smith Says Brighter Future For WAPA Means Keeping The Power On For You And Me

New CEO Smith Says Brighter Future For WAPA Means Keeping The Power On For You And Me

CHARLOTTE AMALIE — Andrew Smith, the new executive director and chief executive officer for the Virgin Islands Water and Power Authority, says he intends to bring a fresh perspective to the troubled utility, and is working with other WAPA leaders to rebuild customer trust and create a reliable, affordable power grid for the Virgin Islands.

Smith, 53, said he has “tactical experience of having been with companies dealing with financial difficulties,” and is looking forward to helping WAPA out of the current situation.

“I’m here because I truly believe that we have a path forward, or I would not be here,” he said.

Originally from Baton Rouge, La., Smith moved to San Francisco after graduate school to work for Chevron, followed by a stint in Houston. After Chevron, he moved to Tampa, Fla., to work for Raymond James Financial in the electric utilities and energy space. He worked with Entergy in New Orleans, then New York “where I worked in engaging from an investment banking perspective with power and utilities.”

He spent about 14 years in investment banking, primarily with JP Morgan, before deciding it was “time to do something different,” and joined Dynegy, a small company that he helped to triple in size.

He worked with GenOn Energy to “help bring them out of bankruptcy,” and prior to joining WAPA he was consulting for a large Louisiana utility.

In the month that he’s been with WAPA, Smith said he’s gotten a sense of the breadth and depth of the challenges the utility is facing, and the public scorn WAPA and its employees receive.

Staff “really like working at the Water and Power Authority and they believe in what they do. We as an organization recognize that we are a critical piece of the community,” Smith said. “We as a collective whole really believe in that and we recognize what we mean to the Virgin Islands. At the same time, we feel bad about ourselves — we as an organization. I think the team sort of feels like we lose all the time, and we don’t have any successes out there, which I don’t believe is true.”

Public perception; changing times

Employees said they’re often approached in public and are expected to answer for the organization’s myriad woes, “and it’s hard to feel good about yourself when that’s happening,” Smith said. “That sort of overarching feel that ‘Wow, nothing ever goes right for us,’ weighs on people.”

Smith said he intends to “echo and celebrate the things we do right,” and “we’ve had pretty good outage performance over the last three or four months and that’s because of proactive steps we’re taking” with the transmission and distribution program.

But he acknowledged that it will take time to regain the confidence of a skeptical public that has been waiting years for tangible change and lower electric bills.

“We’ve got to show that’s sustainable; I totally get that. What I would say is different in this situation is because I don’t come from a municipal background,” Smith said. “I think more importantly — I recognize it’s a pro and a con — I’m an outsider. I know that, I get that. We have never recruited someone like me to the Water and Power Authority, so that’s the first point I would make to a customer that says, ‘What’s different?’ Doesn’t mean I’m better or worse, I’m different. So, we’re going to approach this in another fashion.”

For example, Smith said that while WAPA has access to federal funding for solar or wind generation, the long review process causes additional delays, while working with a third-party vendor or operator directly could yield faster results — and months of cost savings by reducing WAPA’s reliance on fossil fuel.

That cost has skyrocketed, and Smith said that over the last six to seven months, WAPA has paid $30 million more than expected for fuel — a full 40% more than what was anticipated.

In order to address the volatile fuel costs, WAPA needs to diversify generation methods and “we have to go through system transformation,” Smith said.

He also acknowledged WAPA’s abysmal financial track record, and said he intends to ensure that systems are in place to prevent fraud, waste and abuse of resources.

“The vast majority of the leadership of the Water and Power Authority today was not here for those decisions. We have what we have today and we have to work forward with that,” Smith said.

WAPA is in the process of recruiting a chief operating officer and chief financial officer, and as someone trained in internal audit procedures, “I am acutely aware and keenly aware of how we put the right structure in place to ensure that it’s very difficult to make the wrong decision, and so that is on myself and by extension the rest of the leadership team, to live by that,” Smith said.

In terms of WAPA’s needs, “companies get into financial distress for different reasons, but a common theme across all the companies I’ve dealt with that have financial difficulty is they lose sight of the day to day operations,” Smith said.

For example, he said WAPA’s aging fleet of trucks has been a major hindrance to reliable service and deferred vehicle maintenance results in unplanned breakdowns, which means employees can’t always get out to read customer meters and respond quickly to damaged poles and lines.

“I recognize there’s a lack of trust with the Water and Power Authority, I get that and we have to stop that. And the only way we will repair that trust is by doing what we say we’re going to do,” Smith said.

By SUZANNE CARLSON/Virgin Islands Daily News