BIPCo seeks extension for filing rate case

Thu, 10/04/2018 - 4:45pm
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The Block Island Power Company has once again asked the R.I. Public Utilities Commission for an extension to file its rate case. BIPCo has not filed an overall rate case since 2007, and the current rates have been in effect since mid-2008. 

Years ago, the State’s Utility Restructuring Act required electric distribution companies to file restructuring plans by January 1, 1997. Under the act, an electric company could not be both a producer and a distributor of power. Due to the unique circumstances of Block Island, BIPCo was exempted from this act and therefore allowed to self-produce the electricity it sells.

However, baked into that exemption was the requirement that if the island ever did connect to the mainland via a cable, the company would be required to file a rate case within six months.

The cable became operational on May 1, 2017, opening the six-month window. In September 2017, the Public Utilities Commission granted BIPCo an extension on filing a rate case until August 1, 2018. At the time, it was expected that the Block Island Utility District would have acquired either the stock or the assets of BIPCo by August. 

The Utility District is a not-for-profit organization, whereas BIPCo is a privately held for-profit corporation, and the way the two different types of corporations will calculate their revenue needs is different. (The main differences are how depreciation of capital assets and debt service figure into the calculations.)

Due to legal filings in R.I. Superior Court by BIPCo minority shareholder Sara McGinnes, there is uncertainty as to when the Utility District may actually close on acquiring BIPCo, and BIPCo again requested an extension to file its rate case — this time to October 1.

There has not yet been a decision by the Superior Court, and McGinnes, through her attorneys, filed a docket with the Division of Public Utilities and Carriers for “Declaratory Relief and for the Investigation of Proposed Utility Sale.” The petition is date August 31, 2018.

As October loomed, BIPCo requested another extension on Sept. 26 to file its rate case — this time until “on or before” December 31. One of the reasons was that “no action has been taken in that [McGinnes’] docket to date.” Another pending “issue” in the request is that the Superior Court case is “in its early stages.”

The very next day, the Division did issue a judgment on McGinnes’s petition for Declaratory Relief. The petition was denied. In the decision, Christy Hetherington, Special Assistant Attorney General, wrote: “The Division finds it wholly imprudent and inappropriate to inject itself into the fray of what is already pending in Superior Court.”

The decision also states that: “Ms. McGinnes’ petition does not satisfy any of the requirements of R.I.G.L title 39-4-13 because it does not concern ‘the rates, tolls, charges…demanded, exacted, or collected by any public utility [and whether they] are in any respect unreasonable, or unjustly discriminatory, or otherwise in violation’ of title 39, nor does it raise any issue ‘affecting or relating to the production, transmission, delivery, or furnishing of…light…or power, or any service in connection therewith.’”

In the latest rate case extension filing, made by the law office of Schacht and McElroy, the attorneys state that despite the extension request, “BIPCo has a number of rate design issues that it would like to present for consideration to the Commission.”

“Therefore, instead of a full rate case, BIPCo proposes to put together a revenue neutral rate design only filing, together with a cost of service study, so that these rate design issues can be addressed by the Commission, while the Utility District issues are being resolved.”

BIPCo President Jeffery Wright told The Block Island Times that it anticipates making this revenue neutral rate design filing by mid November.