Cost of BIPCo tank removals lowered

Fri, 07/14/2017 - 9:00am

The Block Island Power Company is moving along with planning for the removal of its underground fuel storage tanks and replacing them with above-ground tanks. The current tanks must be removed by the end of 2017, per an Environmental Protection Agency mandate. 

At BIPCo’s Board of Directors meeting on Thursday, July 6, Company President Jeffery Wright presented costs and a timetable for the project. The original estimate for the total project was $810,000, but that has been reduced to $585,000. Tank removal had been budgeted at $260,000, but the current estimate, which Wright said was “firm,” is $145,000. The new tanks also come at significant savings: $250,000 was budgeted, but estimates are currently at $140,000 and include design, materials, and installation. Of the three components, only installation is still estimated.

Also included in costs for the project is “potential environmental costs,” and $300,000 is set aside as a “placeholder.” This is because the degree of soil contamination, if any, will remain unknown until the tanks are actually removed. Representatives from the Department of Environmental Management will be on hand throughout the removal process to monitor the condition of the soil. 

However, even if there is little to no contamination, some of that money will need to be spent on site work to meet environmental and safety standards. 

After considering two types of new fuel tanks, Convault and double-hulled steel ones, the Board of Directors chose to go with the steel after being assured that they were “appropriate for marine environments.” The Convault tanks would have required a larger crane for installation, and incur higher freight costs due to their weight.  Additionally they would require more maintenance and containment features.

The work to install the new tanks and remove the old ones is scheduled for October and November. Each tank will hold 12,000 gallons, bringing the amount of fuel stored on the property down to 24,000 gallons instead of 100,000 gallons.

Also in the works is soliciting proposals for a full “cost of service” study. Wright said he had reached out to various parties who might be interested in performing the study. The CPA that BIPCo currently uses for most of its accounting work, David Bebyn, is also capable of performing the study, but Wright said: “A fresh set of eyes would be helpful.” 

All of the people Wright has contacted said they could have the study done by Oct. 31, just in time for a new rate case to be filed with the RI Public Utilities Commission, which has stipulated that a rate case be filed within six months of being connected to a cable from the mainland. That connection was made on May 1. 

Wright reported that he was scheduled to meet with staff members of the Public Utilities Commission on Thursday, July 13 to review the process of filing for the rate case.

Fuse failures

The influx of summer residents and visitors has caused a few blips in the distribution system. There have been a few cases of “fuse failure,” according to Wright, who explained that the failures weren’t caused by overloading, but because of the sudden upload that occurred after the winter.

Wright said that on July 2 and 3, the system hit a usage peak of 4.2 megawatts. The historical peak for usage is 4.7 megawatts. Kilowatt hour sales for June were 100,000 more than in June 2016 and were the highest ever for the month of June. 

Resident Bill McCombe, who attended the meeting, suspected the increase in usage was due to people installing air conditioning. 

While increased electrical usage may not be what conservationists would like to see, it will result in increased revenues that will be set aside for distribution upgrades.  Included in current rates for the four peak months of June through September is a one-cent per kwh charge, which the PUC calls “penny money,” that is set aside for upgrades. 

Wright said that the current distribution system needs to be “mapped and modeled.” Of the downtown area, Wright said: “That main circuit has some serious load on it.”

Generator status

Chief Executive Officer Howell Conant updated the board on the status of some of the generators at the plant. Engines “24 and 25 are both overdue for an overhaul,” he said. The estimated cost is $300,000 and although he said “they need to be done,” he also said it “could probably wait until a new budget year since they won’t be used” for many hours.

BIPCo has retained its diesel generators for emergency backup in the case that there is some type of cable or substation failure — something that could take weeks to months to repair. Currently BIPCo has three generators on standby: engines 24 and 25, which were not affected by last July’s fire at the plant, and a rental generator.

Wright told The Block Island Times that new switchgear for the two engines damaged in the fire was due to arrive by the end of this month, and that the insurance company has not yet resolved what to do about replacing the generator that was completely destroyed by the fire.

Conant also said that since the company was reducing emissions from the generators, the smokestacks on the generator building could be reduced in height, making for a more attractive plant. Treatment of the emissions with urea could also be reduced or eliminated. 

When asked for more detail, Wright told The Times: “The bottom line is the emissions requirements are less, due to the concept [that] they will rarely be run. We’ve re-permitted them accordingly.”