BIPCo audit finds no financial issues

But revenue is uncertain for 2020
Fri, 04/10/2020 - 2:00pm
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Under the “new normal” the Block Island Utility District Board of Commissioners held its monthly meeting by Zoom on Saturday, April 4. There were 13 participants for the meeting, including Block Island Power’s accountant David Bebyn, attorney Michael McElroy, and members of the audit team from Marcum, LLC. The meeting was not without a few instances of humor and technical difficulties. Kyle Conners of Marcum explained that the colorful drawings behind him on his screen were the result of his five-year-old’s homeschooling, and at one point, chimes started going off. Was it someone’s cell phone? No. Commissioner Mary Jane Balser said, “that’s the clock in my house.”

The focus of most of the meeting was on the results of the financial audit, for which a draft report was reviewed. The financial statements look a bit different than previously, as the power company is now not-for-profit. Other comparisons with the old BIPCo are somewhat complicated by the fact that the period is less than a full year as the utility has changed its fiscal year to end on Dec. 31.

While there were many questions, the auditors noted that they didn’t find any material problems.

“So, you didn’t find anything wrong?” asked Commissioner Elliot Taubman.

“We tried. Believe me,” said John Healy, also of Marcum.

In his President’s Report, Jeffery Wright addressed BIPCo’s response to the Coronavirus pandemic. He said the decision back on March 12 to close the office to visitors was at first met with some puzzlement. “Looking back, I’m really glad we did,” close the office.

“There’s uncertainty and fear in everybody’s mind,” said Wright, and they are doing everything possible to keep everyone safe. Tracy Fredericks will be in the office on Mondays, Wednesdays, and Fridays from 10 a.m. to 1 p.m. While she is there, Wright will work from his apartment upstairs.

The line crew is traveling in separate vehicles to maintain social distancing and they are not sharing tools. All non-essential work has been stopped, with the crew responding to outages and emergencies only.

Wright said the crew members have told them they appreciate still getting a 40-hour per week paycheck, and they are waiving the right to over-time pay as “their contribution to the community.”

At the plant, maintenance inspections continue to be done, with only one person in the building at a time.

Despite the coping, there is still uncertainty ahead, particularly in the area of revenue and cashflows. While no power shut-offs will take place due to non-payment of bills, it is hoped that those who can, will still pay their bills on a timely basis.

What is more unknown is how the normally high summer revenues will be affected if hotels, restaurants, and other businesses remain in shutdown mode.

Progress continues with the rate case filed with the Division of Public Utilities and Carriers, with the commissioners voting to accept the “settlement agreement” finalizing changes, all minor in nature, proposed by the Division. The case is still on schedule with a settlement hearing proposed for the first week in May. If accepted, the new rates will go into effect on June 1.

Although the new rate structure is considered “revenue neutral,” the structure will change from two seasonal rates to three, with July and August being the highest, November through April, the lowest, and May, June, September and October with an in-between shoulder season rate.

The new net metering tariff though is on hold for now. The tariff is dependent on the R.I. General Assembly approving legislation that will lift the cap on net metering beyond the allowed three percent of peak usage.

The Senate side has already held a committee meeting on the matter, but the House went into recess before a hearing there, scheduled for March 17, could be held.