PUC approves new rate structure for BIPCo

Thu, 05/28/2020 - 6:00pm
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On Tuesday, May 26 the Rhode Island Public Utilities Commission approved a number of open dockets filed by the Block Island Power Company. Included among them was BIPCo’s full rate case filing, the proposed Demand Side Management Plan, more commonly known as an energy efficiency plan, and the request for an extended exemption from certain aspects of the Utility Restructuring Act passed in 1996 by the state of Rhode Island.

The new rates will go into effect on June 1. The PUC did not change the rates submitted by BIPCo. BIPCo. President Jeffery Wright said that “the overall revenue requirement didn’t change. I’d like to stress again that we worked really hard to maintain the same budget level.” BIPCo’s annual budget is $3.3 million.

Under the new structure, there will be three separate rates depending on time of year. Under the old rates there was an “off-season rate” that extended from October through May, with higher rates for June, July, August and September. The new structure introduces a shoulder-season rate for May, June, September and October. July and August will have the highest rates, a reflection of peak usage, and the off-season rate, from November through April will be lower than it is now.

For the past several years, residents paid 9.1 cents per kwh during the offseason, and 23.99 cents during the four peak months for the Plant and Distribution charge. Under the new rates they will pay 8.95 cents in the winter months, 14.25 cents during the shoulder season, and 28.5 cents during July and August.

Non-demand commercial, or “General Service” customers paid 12.05 cents per kwh during the off-season, and 26.52 cents during the peak season. Under the new rates they will pay 10.70 in the winter months, 17.10 cents in the shoulder months, and 34.10 cents during June and July.

Both of those customer classes will pay $10 per month for the customer charge, down from $12.38 per month under the old rates.

Demand rate customers will pay $32 month for the customer service charge instead of $18.57. For this class, the offpeak Plant and Distribution rate falls from 10.90 cents per kwh to 8 cents. During the shoulder months they will now pay 12 cents, and during July and August, 25 cents. Formerly, demand rate customers paid 21.85 cents from May through September.

Across all rate classes, customers will pay a Transmission charge of 7.62 cents per kwh used each month and a Standard Offer rate of 9.14 cents per kwh. This charge is mainly made up of a pass-through amount that BIPCo pays for electricity purchased from the electric grid and delivered to customers. Any changes made to the standard offer rate are submitted to the PUC in separate dockets.

Wright said: “We feel it is the best way to allocate our costs to all of our members in an equitable and fair way.”

The varying rates apply mainly to the “Plant and Distribution Charge” component of the overall charges, which also include a flat monthly customer service charge and a per kwh Transmission charge. Both of those will remain the same, for both residential and commercial customers, throughout the year. 

A new component of the charges is one for the energy efficiency plan, another docket that was approved on May 26. It will be the first time that BIPCo will have such a program. The budget is $120,000 per year with $60,000 coming in the form of grants from the R.I. Office of Energy Resources. Ratepayers will be charged 3.95 cents per kwh during the shoulder season months, and 1 cent per kwh during July and August.

The program comes on the heels of a pilot program held by the OER on Block Island a few years ago, in which participants signed up for free energy audits, and were given various levels of assistance in implementing energy saving measures, ranging from free lightbulbs to rebates on appliances, thermal heat pumps, and assistance with weatherization.

The OER was instrumental in formulating the plan, with the Block Island Utility District making various tweaks to the program.

As BIPCo does not currently have the resources to fully conduct the program itself, Requests for Proposals should go out in June so that customer participation can, hopefully begin in July. For a detailed look at what will be available, the full program can be accessed on the PUC’s website, (ripuc.ri.gov) under the Events/Actions pulldown menu. Select Commission Docket, and scroll down to docket 5013.

Rhode Island passed its version of the Utility Restructuring Act in 1996. The act was designed to spur competition and as a result, electric utilities were forced to separate their power generating assets from their distribution assets. BIPCo, as a stand-alone entity on an island, was exempted from that aspect of the act, allowing it to both generate power (through its diesel generators) and to distribute it to customers. Written into the exemption was the caveat that within six months of the island being connected to the mainland power grid via a transmission cable, the utility would have to comply. Now, with permission from the PUC, the diesel generators are to be maintained for emergency purposes only.

Legally, under the act, if BIPCo were to endeavor to generate energy through its own solar or wind installation, they would have to form a separate company with a separate workforce. However, they have been given the opportunity to install a donated rooftop solar system, and so in January BIPCo requested an exemption to install the solar system without forming a separate company and to sell the power generated at retail.

The request was approved by the PUC, also on May 26. Wright says the estimated revenues generated by the solar system will be about $17,000 per year.