Virgin Islands (US) Governor Signs Feed-in Tariff Act

By Paul Gipe

Governor John de Jongh, Jr. of the Virgin Islands signed a bill enacting feed-in tariffs in the US territory on May 16, 2014.

Act 7586 is a greatly watered down version of the original proposal by Senator Craig W Barshinger. The act directs the territory’s utility to set the tariffs and otherwise administer the program. The tariffs must be approved by the Public Service Commission.

Unlike many recent feed-in tariff proposals in North America, the Virgin Islands act includes other renewables and tariffs will be differentiated by size and location.

However, two damaging provisions may limit the practicality of the act.

  • The tariffs must be less than the so-called “avoided cost,” and
  • If the “avoided cost” changes, the tariffs—even those within an existing contract–may also change.

The latter provision will give banks pause before financing any project as the revenue from a project can not be predicted with any certainty.

These provisions haven’t been seen in any FIT policy since Germany abandoned the Stromeinspeisungsgesetz and moved to a true feed-in tariff based on the cost of generation in 2000.

Other limitations include very low capacity caps and project size caps. Total capacity on St. Thomas, St. John, and Water islands is limited to 10 MW and on St. Croix total capacity is limited to 5 MW. Oddly, individual projects must be greater than 10 kW, thus excluding most homeowners, but less than 500 kW, thus excluding most wind turbines.

Act 7586

Amended Bill 30-0004

Bill 30-0004