Utility District moves ahead on two major projects

Mon, 12/09/2019 - 9:15am
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The Block Island Utility District Board of Commissioners, which governs the Block Island Power Company, covered a broad range of topics at its meeting on Tuesday, Dec. 3 before scuttling the remainder of the agenda after three and-a-half hours of discussion. There was the somewhat mundane business of approving minutes, a treasurer’s report, and review of an audit proposal before getting down to the business of capital improvements and the consideration of both an energy efficiency plan and a new net metering policy.

One of the goals of BIPCo President Jeffery Wright is to convert the antiquated voltage system from a “delta” to a “wye,” which will allow the power company to move more power through its lines.

Wright and crew proved it could be done. This fall BIPCo replaced 30 poles on the New Harbor circuit and took the opportunity to rebuild the line to the new wye system, with little disruption to customers. The success of this conversion has led Wright to believe that the timeframe for total conversion could be pushed up considerably, perhaps as “soon as next fall.”

There are two other major capital improvements that are being fast forwarded. About a month ago, executives from CFC, the lender that financed the Utility District’s acquisition of the assets of BIPCo, paid a visit to the island. After sitting down with Wright and Utility District Chair Barbara MacMullan, CFC “committed to finance up to $6 million for new projects,” said Wright. Since the current interest rates offered by CFC are quite low, Wright said it made sense to “strike while the iron’s hot. We might tap into some of that” financing.

When National Grid built the new substation on Block Island it contained a somewhat unusual transformer. “It’s so unique, I don’t think anyone in the county has one,” said Wright. At the time, National Grid did not want to provide a back-up transformer, estimated to cost $500,000, and BIPCo did not have the funds to purchase one themselves. Since a replacement would take eight to 12 months to custom fabricate, if the current transformer fails, the island would be forced to revert to using its diesel generators for that eight to 12-month period.

Resident Chris Warfel asked if National Grid had a mobile transformer that could be used in the event of a breakdown, and Wright responded that although they did, the company would probably only want to make it available for a week or two.

MacMullan thought it was important to have the spare transformer available for the summer season, and the purchase was approved.

As for the second project: “Now is maybe the time to build some employee housing,” said Wright, adding that rent revenues would pay for the debt service.

The proposal is to build a new house for Wright on the northern lot of the BIPCo property. Wright has been renting the 800 square foot apartment above the BIPCo offices, which would then be freed up for an employee. The office space could also be converted to either one or two apartments, with the offices being moved to the old, unused, generator building.

MacMullan noted that there were a couple of employees nearing retirement and replacements could very well need housing. “Where do you put your employees? There’s no housing available,” she said.

She said that the town manager housing project, currently underway, provides “data” on the cost and challenges involved and asked Wright to come back to the board with a proposal and “numbers” including construction and site preparation.

While there was some discussion on the possibility of offering land for town-sponsored affordable housing, MacMullan said: “One thing that’s a scarce resource for us is land. People have asked us to do a lot of things.” But those things are unrelated to BIPCo operations, such as the request to provide space for an impound lot that was rejected by the board.

“We could make the house a poster child for energy efficiency,” said Treasurer Bill Penn, although others noted he might not want to have people “tromping through” his home.

Wright said that CFC was prepared to provide financing for both the transformer and the house, and that, since the R.I. Public Utilities Commission needs to approve any long-term debt, one filing for both projects would be most efficient.

Nathan Cleveland, from the Rhode Island Office of Energy Resources, presented the board with a draft Demand Side Management Plan, also known as an energy efficiency program. Having such a plan is one of the many state requirements that BIPCo must comply with now that it is connected to the mainland via a cable.

The draft plan is modeled on the OER’s pilot program, called B.I. Saves, which it undertook from 2015 to 2017 on the island. That plan offered free energy audits for interested residents and businesses, free L.E.D. lightbulbs, smart power strips, low water-flow shower heads, and financial incentives for energy improvements from weatherization to rebates on the purchase of various appliances for heat, hot water and HVAC systems. Not all of the improvements are targeted towards electricity usage only – rather, all types of energy use are considered.

The plan has a budget of $120,000 per year, with half of the funds coming from the OER and half coming from ratepayers via a dedicated fund. Any monies unspent in one year will be automatically rolled over to the next year.

Commissioners and audience members had a lengthy discussion on the aspects of the plan, which is fairly evenly split between business and residential improvements. Commissioner Mary Jane Balser, who owns the Block Island Grocery, felt that there should be more emphasis on residential assistance than on commercial assistance. She said that businesses have already “done everything they could” on their own to reduce utility costs.

Although they debated whether or not to focus on low-.income households, Cleveland said that the OER’s plan was an “equal opportunity” plan meant to provide incentives for anyone interested. He added that “low-income programs blend in federal money,” and thus requires more administrative funds to meet the government’s “challenging reporting requirements.”

“Keep it simple for now,” suggested Wright of the plan, which may be revised each year.

“What if we just buy the thermostats, the bulbs, etc. and give them out without doing all the other stuff?” asked Balser.

“The PUC requires us to have a program,” said Wright.

“You’re getting more energy savings,” said Cleveland, with “deeper, more expensive work,” such as insulation and appliance replacement. “There’s more savings over a longer period of time.”

The board considered various changes and will vote on a plan to be submitted to the PUC at its next meeting.

Another plan they hope to approve next month is one to replace the current net metering policy. Under state law, there is a cap on the program of three percent of the peak output of BIPCo. That cap has been met, and the only way to lift it would be to get approval from the R.I. General Legislature. BIPCo hopes to partner with the Pascoag Utility District, the only other electric company in Rhode Island besides National Grid and BIPCo, to get the cap lifted.

Despite the cap being met, there are several solar energy projects being proposed on the island, including at the Island Free Library and the Cherry Hill Lane affordable housing development.

The proposed policy would open up participation to non-residential customers, and Wright announced that there were “boundaries” that needed to be maintained. One of those is that it be “as financially neutral as possible,” meaning that ordinary ratepayers should not be subsidizing net metered customers. In order to do this, participants would be credited for energy produced using the “avoided cost” method, as opposed to the current method whereby customers are credited at the full retail rate.

The 42 existing net metering customers will be grandfathered in, “until which point their system is replaced, upgraded or retired.”

Both policies will be available on BIPCo’s new website, blockislandpowercompany.com, which Wright said he expected to “go live” on Friday, Dec. 6. The board hopes to approve the policies at its next meeting in January.