Substation costs fall to B.I. ratepayers

Sat, 07/29/2017 - 9:30am

The Rhode Island Public Utilities Commission ruled on Thursday, July 27, that about $2.5 million in costs associated with National Grid’s construction of the new substation will be borne solely by Block Island ratepayers.

Block Island Power Company President Jeffery Wright informed The Block Island Times about the decision after the PUC meeting concluded.

“The Commission voted in favor of Grid. We will debate an appeal at our next Block Island Board of Directors meeting. I respect the Commissioner’s decision, but disappointed on the behalf of our customers,” Wright said. “A ruling in our favor today would’ve resulted in a reduction of our transmission rate by about 2.6 cents/kWh, more than twenty percent of the combined standard offer and transmission rate of 12.44 cents/kWh we are charged today.”

On Jan. 31, 2017 the Block Island Power Company filed a docket with the Rhode Island Public Utilities Commission asking for Declaratory Judgment on the matter of having National Grid socialize the interconnection costs and a spare transformer across all Rhode Island ratepayers, as opposed to having only Block Island ratepayers shoulder those costs. After four months of filings by the various parties, BIPCo’s petition was finally heard on Tuesday, May 30, at the PUC’s offices in Warwick.

BIPCo’s attorney Michael McElroy took issue with the overall $1.8 million interconnection cost, of which approximately $1 million was for the building of the substation, and for the lack of notice to BIPCo by National Grid of the cost overruns, which were presented to BIPCo just two days before a hearing before the PUC on a standard offer rate in April. The first estimate of the cost had been $330,000 and then rose to $550,000.  The cost eventually came in at about $1.8 million. “Some things you can let go,” said McElroy. “But we had to file this petition.”

McElroy based his arguments for socialization of the costs on the state legislation enabling the Block Island Wind Farm, called the “Town of New Shoreham Project Law (R.I.G.L. Section 39-26.1-7, which calls for “an undersea transmission cable that interconnects Block Island to the mainland… To effectuate these goals, and notwithstanding any other provisions of the general  or public laws to the contrary, the Town of New Shoreham project, its associated power purchase agreement, transmission arrangements, and related costs are authorized pursuant to the process and standards contained in this section.”

McElroy argued that “related costs” include the interconnection costs and the price for a standby transformer. He said those costs filled “three buckets,” including the $263,700 cost that BIPCo incurred in connecting its transmission lines to National Grid’s, National Grid’s interconnection cost of $1,836,000, and $450,000 for a standby transformer. These totaled $2,549,700. 

National Grid, through its attorney Jennifer Hutchinson, argued that the interconnection costs were not “related” because they benefitted only Block Island Power customers and not the rest of Rhode Island’s ratepayers.