Big and small projects ahead for BIPCo in 2022
As National Grid seems to suffer one setback after another in its attempt to rebury a small portion of its Sea2shore transmission cable that runs between Block Island and the mainland, the obvious question becomes: how much is this costing? And how much will it cost Block Island ratepayers?
The initial installation cost of the cable was $114 million, but Block Island ratepayers were only saddled with a relatively small portion of the cost, which is being “socialized” throughout Rhode Island. The reburial was estimated to cost another $30 million, but as residents watched NGRID’s comings and goings from the island over the past year, questions about just how much the company was spending – or wasting, became more urgent.
At the Block Island Utility District’s meeting on Saturday, Dec. 18, Block Island Power Company President Jeffery Wright had good news. It hadn’t been finalized yet, but he expected that the R.I. Division of Public Utilities and Carriers was poised to cap the amount that NGID could pass onto ratepayers at $144 mllion – the initial cost plus the estimate for reburial.
Currently Block Island’s portion of the cable costs ratepayers 8.52 cents per kilowatt hour. On the monthly BIPCo bill it appears as the “Transmission Cost.” Using the simplest of calculations, that amount could go up by 1.775 cents when the $30 million is added to it. However, in a rare piece of good news, the transmission charge is more likely to go down.
Last summer, the DPUC found that NGRID had over-collected on cable charges. At the time of the meeting on Saturday, there was no final order from the DPUC on this matter either, but Wright expected that the transmission charge would go down by 40 percent and he was also expecting a refund of $32,000 from NGRID. So, somewhere in the middle, there will be a savings of about 20 percent on the transmission charge.
BIUD Chair Barbara MacMullan said that it was “huge” that the DPUC was setting a cap on the cost that NGIRD could pass onto ratepayers and that NGRID now has “a great incentive to get [the cable reburial] done.”
Wright announced that he was close to finalizing the financing of the voltage conversion project that would replace the antiquated distribution system and double the capacity of the transmission lines throughout the island. The project has been divided into phases that will be performed
over about a five-year period and Wright wishes to finance $1.5 million for phase one of the project through BIPCo’s creditor, the National Rural Utilities Cooperative Finance Corporation (CFC).
The cost of the project is front-loaded and debt service and subsequent costs are expected to be covered by the current capital budget with no increase in rates necessary. Wright introduced Ken Tripp to the board, who Wright has worked with in the past. Tripp is the on-island project manager for the conversion project.
Initially, there will be an “inner circle around the island” that will be installed over the winter and become operational in early April. The transfer will entail an island-wide power shutdown for a few hours while BIPCo de-energizes, and then re-energizes its lines. Further phases will extend that inner core throughout the island one circuit at a time.
Another project for the coming year includes the installation of a Level Three electric vehicle charger at the BIPCo plant. Although Wright would like the charger installed for use next summer, it’s turning out to be difficult to actually procure one. He hopes that he can get one from the same
company that is providing the charger for the new electric school bus, NUVVE.
Wright and the board will also continue to explore the use of a utility-scale battery storage unit. The system would be owned and operated by a separate company, so there would be no financial risk to BIPCo. The battery system would be used to “shave the peak” and the resulting savings in capacity charges would be shared with BIPCo. New England Battery Systems was the first company to propose an installation on Block Island, but Wright said they “couldn’t make the economics work.”
Since then other companies have approached him with similar proposals.
Wright was seeking permission from the board to have consultants look at the proposals, especially as it’s a very new technology.
MacMullan also wanted to see more details about the agreements. “I want to see the guts of it,” she said.
“We’re all going to want to get into the weeds,” said Wright.
From the audience, Chris Warfel said it might be helpful to put out a request for proposals.
MacMullan thought it important to do the due diligence. She recalled when she was on the town’s Electric Utility Task Group. “We had people come in with all kinds of nutty proposals,” she said.