Utility District rate hearing  to be held on Jan. 9

Thu, 01/02/2020 - 5:15pm
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The Rhode Island Public Utilities Commission will hold a public hearing on Thursday, Jan. 9 at Town Hall to take comments on a new rate design proposed by the Block Island Utility District. The hearing starts at 12:30 p.m. If there is inclement weather, the hearing will be held on Jan. 23.

The Utility District purchased the assets, and the name, of the Block Island Power Company in March 2019, transforming the company from a privately held corporation into a not-for-profit utility controlled by ratepayers. It is governed by a board of five elected utility commissioners.

This is the first time since 2008 that BIPCo has filed an overall rate design change. For many years, BIPCo was exempted from many of the provisions of the Utility Restructuring Act, which decoupled energy producers from energy distributors. This was because of the unique nature of a company servicing an island with no transmission cable to connect it to a mainland energy grid.

The installation of the sea2shore transmission cable as part of the Block Island Wind Farm project made it possible to join the New England electric grid, and BIPCo turned off its diesel generators. It also started the clock ticking on when BIPCo was required by the PUC to file a new rate case.

With the conversion from an investor owned company to a not-for-profit came some built in savings, most generally in savings on taxes. As a result, the new rate case is “revenue neutral,” meaning the total monies BIPCo will collect remains virtually unchanged. However, that does not mean everyone’s electric bills will remain the same. Based on cost of service studies, there will be some shifts between classes of ratepayers (general versus residential) and the time of year when energy is used, with more of a burden paid by those who use most, if not all of their power, in the summer months.

Currently there are two seasonal rates: the winter rate paid from October through May, and the summer rate paid for June, July, August, and September. Under the new design, there will be three seasonal rates. The new, lower, winter rate will be in effect from November through April. July and August will see higher rates, and a new shoulder season that includes May, June, September and October will have rates somewhere in between.

Other, basic changes in the rate design include the elimination of two rate classes — the municipal rate and the residential demand rate.

For the first time, Block Island will have an energy efficiency program. The $120,000 annual program will be funded with $60,000 coming from the R.I. Office of Energy Resources, and $60,000 coming from ratepayers via a one cent per kilowatt hour charge in July and August, and a 0.395 cent per kilowatt hour charge in the shoulder season.

What the rate case does not include is a new net metering tariff, or policy. While changes are being proposed to this program, for regulatory purposes, it will be considered separately.

The full docket can be seen on the PUC’s website www.ripuc.org under the events/actions menu item for Commission dockets. It is docket number 4975.