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VI WAPA is an electric and potable water monopoly. Its operating cost for producing electricity is of 56 cents per kilowatt hour (kwh). It is
VI WAPA is an electric and potable water monopoly. Its operating cost for producing electricity is of 56 cents per kilowatt hour (kwh). It is only allowed to charge 43 cents kwh for residential consumers and 47 cents kwh per commercial consumer by a public regulatory commission. Note the allowed legal tariffs of 40 odd cents are already the highest in all US jurisdictions. Should another utility company be allowed to operate in the Virgin Islands? Note that the new utility would have to establish its own distribution network and dig trenches to lay pipes and cables. Should the public regulatory commission allow tariffs to equal the 56 cents operating costs? Should steps be taken to reduce the operating cost of the utility to 43 cents? What if the utility says it cannot reduce the cost to 43 cents because it has too many line losses, and too much debt servicing requirements? What would you do
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