BIPCo energy procurement plan approved

Unforseen costs a ‘black cloud’
Fri, 04/14/2017 - 1:45pm

The good news is that for the first time in the 80 plus years of paying electric rates on Block Island, rate payers will no longer be subjected to the almost daily fluctuating costs of diesel fuel. Members of the Division of Public Utilities and Carriers today approved an energy procurement plan for the Block Island Power Company that will stabilize rates for an initial contract that could last up to 18 months.

The bad news is that the new electric rates that the 2000 rate payers on Block Island pay will not be as low as previously hoped. That is because BIPCo Interim President Jeffery Wright received an email from a National Grid representative on Tuesday, April 11, saying that the cost of the new substation on Block Island, as well as the cost of the transmission cable, had been seriously underestimated.

Wright was told that the revised cost of the substation would be $1,835,973 rather than the $550,000 previously estimated. The cost of the transmission cable also went from an initial estimated price tag of $75,000,000 to $125,575,127.

Block Island rate payers will bear the entire cost of the substation. The cost of the transmission cable will be socialized between mainland National Grid customers and Block Island rate payers. Block Island rate payers will share 2% of the cost of the cable.

Wright called this latest news a “black cloud” and said he is considering an investigation into the matter. He also said he was planning on having a “frank discussion” with National Grid representatives about why he found out about this news so close to the scheduled hearing with the Division, and why the original cost estimates were so low.

The cost for transmission charges BIPCo customers will pay rose, as a result, from 4.37 cents to 6.29 cents per kilowatt hour. Wright said that Block Island rate payers will still see an overall savings per kwh, but that if there were other unforeseen cost increases, Wright said, “I’m not sure what will happen.”

For all of that, Wright was concentrating on the positive aspect of the Division’s approval of the energy procurement plan for BIPCo.

“This is all about stability, stability, stability.” Wright said after the hearing concluded. “This was a good day.”

For more on this story, please see this week’s edition of the Block Island Times