One step at a time for Utility District

Thu, 08/08/2019 - 6:30pm

Things are falling into place for the Block Island Municipal Utility District, which acquired the assets — and the name — of the Block Island Power Company in March.

The cost of the acquisition was $5.8 million, financed by a short-term loan from CFC Bank. Utilities entering into long-term debt must get approval from the Rhode Island Division of Public Utilities and Carriers and on July 11 BIPCo received that approval.

Earlier in July, BIPCo was accepted as a member of the National Rural Electric Cooperative Association. Although not technically a cooperative, the Utility District is a not-for-profit organization and ratepayer controlled. The NRECA Board has deemed the company “consistent with association bylaws, objectives and the seven cooperative principles,” according to an article posted on its website welcoming the Block Island Municipal Utility District.

The Utility District is the NRECA’s first and only member from Rhode Island, and with that, the company gets to name a director to represent the state on NRECA’s national board. Rhode Island is the 48th state to be included in the association, which represents over 900 electric cooperatives in the country and acts as a national trade organization “to promote and support co-ops and to champion their business model.”

At their meeting on Wed. July 31, the Utility District Board of Commissioners appointed BIPCo President Jeffery Wright as Rhode Island’s NRECA director. Although any “member” could have been appointed, Commission Chair Barbara MacMullan said Wright should be appointed “because he can bring the most to them, and he can bring the most back to us.”

Wright, who served for about 10 years as chief operating officer of Vermont Electric Cooperative before joining BIPCo a little over two years ago, said he “would appreciate the opportunity [to serve on NRECA’s board] and be grateful for it.” He added that it would provide an opportunity for continuing professional development, and that the appointment achieved one of his personal career goals.

Next on the to-do list is the filing of a new rate case. At the District’s June meeting, the filing date was anticipated to be late July, but that filing has been delayed and the target date is now August 16. “It’s just going to take us a little longer,” said Wright.

One aspect of the rate case that took the Commissioners somewhat by surprise was the inclusion of an energy efficiency plan. Inclusion of such a plan within the utility rates was a requirement of the Utility Restructuring Act, but BIPCo was granted a waiver due to its unique circumstances, just as it was exempted from “retail choice.”

Wright said the Rhode Island Office of energy Resources has $60,000 available to BIPCo for the plan, but “it needs to be matched.” Matching funds will come from a charge included in the new electric rates that will be used specifically for that purpose. As of the meeting, there was no specific written plan, but Wright said one could be modelled on the Pascoag Utility District’s plan. (Plans often include free low-energy lightbulbs, home energy audits, and rebates for energy efficient appliances.)

Wright has said in the past that the rate filing would be revenue neutral, but there is a need for a very slight increase in rates to make up a gap of $21,524 between expected expenses and current rate revenues. With current rate revenues of $2,993,104, this is only an increase of 0.72 percent.  

Another way that Wright hopes to increase revenues is for people to take advantage of the proposed lower winter rates by switching home heating, stoves, and/or clothes dryers to electric from either oil or propane, something that may be increasingly attractive, especially if rebates are included in an energy efficiency plan.

The commissioners are also preparing for their first annual meeting, set to take place on Saturday, August 24. This meeting, which needs a quorum of 15 “members,” is an opportunity for ratepayers to chime in on not only the energy efficiency plan, but on the concept of “peak shaving.”

Every utility that draws power from the regional New England electric grid run by ISO-New England pays a yearly capacity charge for the relative amount of power they draw from the grid. The amount charged to the utility is determined at the particular time when electric use is at its highest across the region. By anticipating the peak, a utility can “shave” the amount it draws by turning to an alternative power source. For BIPCo, that could be achieved by running one of its diesel generators for a few hours when a peak is anticipated, thus reducing the company’s relative draw from the grid.

There are pros and cons to peak shaving by running the generators. It can save money by reducing the capacity charge, but it comes with the environmental cost of burning diesel. Wright estimates that the generators would be utilized for about 75 hours per year in order to hit the peak. Peaks are most often achieved regionally during intense heat waves and so a July peak could easily be replaced by an even higher peak in August.

Last but not least, if you have made it this far —  there are two positions opening up on the five-member Board of Commissioners, and two people have thrown their hats into the ring. Mary Jane Balser is running as an incumbent, and Elliot Taubman is running for the first time. The deadline for declaring one’s candidacy was July 25. Ballots will be sent out on August 29, and need to be received by 4 p.m. on Monday, Sept. 30.