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CaribDA 2014 Conference & Exposition “Drought-Proofing the Caribbean”

24 – 27 June 2014 in St. Thomas

Transition Complete! Thermal Distillation to SWRO in the USVI

David Starman, MSCE Regional Operations Manager - USVI

Seven Seas Water Corporation

Vernon Alexander Special Projects Coordinator VI Water and Power Authority

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Introduction

OUTLINE OF PRESENTATION •Intro to Speakers - Vernon Alexander, David Starman •Outline of VIWAPA/ Seven Seas CaribDA Presentation in 2012 •Review the plan for transition from Thermal To RO – intended benefits and anticipated hurdles •Discussion of the RO installation projects in St. Thomas and St. Croix

•Anticipated hurdles overcome •Discussion and presentation of the projects and completed facilities

•Present Data on Production Volumes and Relative contribution of Distillation and RO to territory production •Present factors affecting cost to produce water and compare before, during and after transition costs •Discuss operational issues created by thermal unit shut down and RO start-up •Conclusion – Transition Completed

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David Starman •Bachelors degree in Biology at the University of North Carolina – Masters Degree in Civil Engineering at the University of South Florida • Began career with Seven Seas Water in St. Croix and then became plant manager for 2 MGD SWRO plant in Curacao. Now, regional manager of USVI Operations, managing 6 plants and 7 MGD of SWRO production capacity and 0.75 MGD of Ultra Pure Water production capacity. •Have spent much of 2014 supporting our Point Fortin, Trinidad operations

Vernon Alexander • Bachelor of Science in Electrical Engineering from Florida Institute of Technology and Master of Science in Engineering Management at Ohio University •Began working for the Virgin Islands Water and Power Authority in 2001 and has been involved with the installation of a new HRSG; major CT overhauls; installation of temporary SWRO plants; installation of a GE TM 2500 CT; coordinated a LNG/CNG feasibility study by SAIC, formerly RW Beck; managed the installation of a 3.3 and 2.2 MGPD permanent SWRO plant on the Randolph Harley Plant on St. Thomas, and the Richmond Power Plant on St. Croix, respectively. •Currently working on the installation and interconnection of 18 MW of PV power, and the conversion of the Authority’s combustion turbines to burn LPG for power generation.

Introduction to Speakers

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Review of CaribDA 2012 Presentation

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Theoretical Costs of RO vs. Thermal Helped Inform Decision to Transition

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CaribDA 2012 – Continued to evaluate costs based on 2008 RO Installation

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Hurdles Identified at Outset of Transition

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2009 Installation of RO – 1.5 MGD in St. Croix

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Contract Signed for Permanent Installations - Unexpected Temporary 2 MGD Installation in St. Thomas – Online December 2011

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Planning for Tight Quarters

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2012 – 2013 Construction in St. Thomas

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Project Completed in St. Thomas

Commissioned June 2013 • 3.3 Million Gallons per Day (with capability to expand to 4.4 MGD) •No additional footprint required to meet anticipated island demand for next 20 years. • Pre-Treatment of Multi Media Filtration and 1 micron Cartridge Filtration

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2013 Construction in St. Croix

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Construction Completed in St. Croix

Commissioned October 2013 • 2.2 Million Gallons per Day (with capability to expand to 3.3MGD) •No additional footprint needed for 20 year plan. • Pre-Treatment of Multi Media Filtration and 1 micron Cartridge Filtration •1.5 MGD Existing containerized SWRO plant remains in service for total installed capacity on St. Croix of 3.7 MGD

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Relatively Consistent Demand through Transition Period

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Production by Technology Illustrating Transition Timeline

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Two New Plants – Reliable, Online and Storage Tanks Full

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Side Note – Volatility of Oil Prices and Closure of Territory Refinery

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Comparing total Water Production Costs - FY 2008 to FY 2014

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VIWAPA’s Cost per kGal – 2008 through 2014

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Operational Issues with Transition

• Steam Re-allocation - At Harley plant, critical boilers have a minimum steam production, and VIWAPA needed to find some place to sink the steam. IDE units were run longer into the transition than required in order to use steam. Significant steam was vented. Steam turbines coming online now will allow for efficient power production from waste heat. •VI WAPA is continuing to deal with the transition repercussions by transitioning from steam NOx injection to water NOx injection. • Manpower Re-allocation – Third class operators were re-trained for Power Plant operations and promoted to second class operators. Existing second – class operators were given opportunity to be further trained and promoted to First Class Operators.

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Conclusion and Discussion – Transition Complete!

•Cost savings have been realized. Current cost per 1000 gallons is in predicted range and stable. •The affect of oil price variation is significantly muted in the cost to produce water in the USVI. • Operational issues during the transition periods continue to smooth out. •RO system is reliable and territory “drought proofed” with tanks consistently full – approximately 60 million gallons of stored water in USVI. •Significant footprint of old thermal units is liberated for available additional plant expansion.