Thirty percent savings with wind farm cable

Mon, 07/26/2010 - 4:00am
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7/24/10 — In an effort to inform the debate on how much the Deepwater Wind cable would save the ratepayers of Block Island, the Electric Utilities Task Group Friday calculated what it characterized as a conservative estimate of the electricity savings.

Task Group Chair Everett Shorey and member Barbara MacMullan used the available data, including the cable allocation cost as laid out in new legislation, which they estimated to be $2 per ratepayer, and worked to determine the new rate following completion of the Deepwater project.

Because the cable would deliver electricity from the wind farm or the mainland grid rather than the diesel generators currently in use by the Block Island Power Company, it would eliminate the fuel surcharge, substituting the surcharge with the cost of purchasing the power from National Grid and the allocation cost for the cable. The task group based its estimate on the type of customer, whether year-round residential, seasonal, small commercial or large commercial.

While the savings varied slightly depending on the type of customer and the season, it was determined that on average a Block Island power bill would decrease by around 30 percent.

The task group held all the other charges constant, which Block Island liaison for Deepwater Wind Bryan Wilson pointed out was unlikely to be the case. He explained that each ratepayer also pays an energy charge, which covers all non-fuel related costs incurred by BIPCo. Without the need to run the generators at all times, Wilson said he believed that the energy charge would decrease and thus further increase the savings.

MacMullan said that that could be the case; however, there was no way to estimate the decrease in the energy charge, so the group decided it was more prudent to hold that cost level. This yielded a more conservative approximation, which did not risk over-estimating the drop in the energy charge. MacMullan offered that the probability the task group’s estimated savings is more than the island would actually see is “basically zero.”

“What we have here is a base-line savings estimate,” MacMullan said. “We are more comfortable understating the savings than overstating them.”

Wilson also pointed out that the estimates were made using current oil prices; however, he pointed out that future oil prices are impossible to predict. Therefore if oil returned to the level seen in 2008 the savings would be roughly triple what was predicted by the task group’s estimate.

The group explained that these savings would not necessarily be the same with a stand-alone cable without a wind farm. This is mainly due to the unknown allocation cost absent the wind farm. With the Deepwater cable the island would be charged 1.8 times what a mainland customer would be charged, amounting to $50,000 per year in cable costs for Block Island, which according the Shorey was a very favorable allocation.

“We are essentially getting a 95 percent subsidy,” Shorey said. “The trade-off is eight wind turbines off the coast for a cable at five cents on the dollar.”

With a stand-alone cable there is no guarantee the island would get the same allocation, he said.

Wilson updated the task group on the progress of Deepwater Wind as it prepares to go before the state Public Utilities Commission with a new contract reached between it and National Grid. He said that the PUC has turned down a motion to delay the hearings and heard a motion to dismiss on Wednesday (see story page 1).

Task group member Bill Penn reported on the latest in a series of “webinars” held by the New England Wind Energy Education Project on the noise impact of wind turbines. Penn said that studies found certain people were more sensitive to the noise created by wind turbines than others. He said that the conclusion was that, when planning to erect a turbine, it should not be assumed that no one will be affected by the noise created by it.

The task group members referenced a recent letter published in the Times on the foghorn. A long time island visitor was so annoyed with the sound of the foghorn they decided to not return to the island. Shorey said that he hardly notices the horn and explained that it is the same with wind turbines; it bothers some people and not others.

Penn also announced that the results of the Block Island Residents Association survey on the Block Island wind farm were now available on the BIRA website (www.bi-ra.org). While the survey was not scientific it did include a comment section, which has also been published on the site.