Utility District acquires BIPCo assets

Thu, 03/28/2019 - 7:45pm

Almost 30 months after Block Island voters narrowly voted to approve the purchase of two-thirds of Block Island Power Co. stock, the Block Island Utility District has announced the acquisition of all BIPCo assets. The acquisition fulfills the goal of creating a non-profit ratepayer-controlled utility district.

A press release issued by the Utility District’s Board of Commissioners made the announcement on Tuesday, March 26:

“Monday, March 25, 2019 marks an historic day for Block Island: the Block Island Utility District acquired all the assets of the Block Island Power Company (BIPCo). After two years of hard work, the goal of creating a non-profit ratepayer-controlled utility has been achieved. This means lower costs, and control over decision-making for BIPCo’s customers. The Block Island Utility District Board of Commissioners, and the Block Island Power Company Board of Directors, are proud to have shepherded this long process to its completion,” the press release stated.

“After negotiating with the owners of BIPCo and receiving an appraisal, the town purchased two-thirds of the stock of BIPCo for a price of $1.8 million. The Sara McGinnes Trust, which owns the remaining one-third interest in BIPCo, is being paid $900,000 from the closing proceeds. If McGinnes continues to pursue her claim that her one-third interest is worth more than that, litigation will go forward to determine valuation. The acquisition was funded by the National Rural Utilities Cooperative Finance Corporation (CFC) with $5.8 million in loans. These funds will be used to pay off BIPCo’s existing obligations, and ultimately the Town’s investment once any claim of McGinnes is resolved.”

“Since the creation of the Electric Utility Task Group by the Town Council in 2008, through failed efforts to purchase the power company, membership changes in both bodies, and the introduction of the Block Island Wind Farm, the focus has always remained the same: how to improve power supply with the goal of a nonprofit utility. Ten years later we have achieved that goal!”

The press release stated that current power company customers will not see much change due to the turnover.

“BIPCo’s outward operations will look much the same. Under the leadership of Jeffery Wright operations will continue as they have for the past two years. The same staff will be maintaining and running the company. You can still make your monthly check payable to BIPCO. The new utility will begin immediately to work on rate design so that rates better reflect current operating conditions. There will be community outreach to engage customers in setting priorities for the power company as we move forward. We will become part of a large group of utility nonprofits which will bring may benefits to our small community. As a nonprofit, the company will realize significant savings which can either go toward future improvements or toward lowering rates (or both!)”

The release noted that the acquisition was the result of the work by many individuals. “The number of people involved in making this a reality is too great to list them all. We do, however, want to especially remember our friend and colleague Norris Pike, who did not live to see the fruition of his decades long effort to create a nonprofit ratepayer-controlled utility. We are sure he is smiling down on us today.” Pike passed away in November 2017.

The release concluded by saying, “we wish to thank the Block Island Community for their support.”

Block Island Utility District Board of Commissioners is Barbara MacMullan, Chair; Jack Savoie, Vice Chair; William Penn, Treasurer; Everett Shorey, Secretary; Mary Jane Balser, Commissioner.

The Block Island Power Company Board is Nancy Dodge, Chair; Jeff Wright, President; Ken Lacoste, Director.