The Antigua Public Utilities Authority (APUA) has called the recent settlement reached with the Antigua Power Company (APC), by way of a new power purchase agreement (PPA), an “excellent deal” which it says was inevitable.
APUA’s Electricity Manager Andre Matthias said, “There is a situation now where APUA does not have as much power generation capacity outside of contracting APC as we would like…”
“Even if we had settled and even if this thing went to the court and we had to pay out damages to them, we would still have had to call APC and sign a PPA because we don’t have the power generation capacity… I think it’s an excellent deal.”
The recently concluded dispute relates to a suit which APC filed after the government of Antigua & Barbuda reneged on the second phase of a joint venture agreement to provide the island with power.
In its revelation of the details of the settlement arrangement and the new PPA, Matthias emphasised above all else that, “there was absolutely no upfront damages paid to APC”.
To avoid paying upfront damages – which APC last valued at US $60 million and APUA valued at US $15 million – APUA entered into a PPA to buy power from what is being called APC’s “JV” plant’s and the parties abandoned efforts to agree to an upfront payout figure.
The details of the settlement arrangement and the new JV plant PPA were revealed during an APUA press conference on January 4.
APUA’s General Manager Esworth Martin said that Aziz Hadeed and the APC negotiators should be “commended” for “a spirit of compromise”.
Matthias said that in the new PPA for the JV plant “the annual guaranteed amount of energy is 130 gigawatt hours up to February 2019 and 170 gigawatt hours up to 2031”.
In 2031 the JV plant will be turned over to APUA.
The electricity manager added, “The rate [to APUA] is 5.9 cents per kilowatt hour and we have negotiated that anything in excess of the minimum annual guarantee – the rate reduces to 5 cents. We have not had a rate like that in any of the previous arrangements… We have not gone below 6 cents before.”
Matthias said that there were performance clauses imposed on APC.
More in today’s Daily Observer.