Block Island Power Company (BIPCo) expects to hear within a month whether it will win a $5 million federal grant to lay an undersea power and fiber-optic cable to link the island to the national electric grid and provide telecommunications.
Whether or not it wins this round, the company intends to apply for the same amount a second time, says BIPCo chief operating officer Cliff McGinnes Sr. The money would go toward a projected $21 million for a cable and upgrades to the company’s aging infrastructure.
The town, meanwhile, is preparing to go to the same well with a $3 million application aimed at lessening the impact of expensive utility bills on island residents. With only $6.8 million total available in 2008 through the U.S. Department of Agriculture’s high energy-cost grants, the utility and the town would be competing for the same money.
The town’s energy task force held a preliminary meeting on the town’s application early this week. Another meeting is scheduled before the Town Council March 3, and the council is hoping for plenty of public input, says First Warden Kim Gaffett (see story, page 18).
The road to a cable
A study by consultants HDR, mandated as part of BIPCo’s last rate increase, found last year that a cable to the mainland would not guarantee cheaper electric rates on the island. Keeping the current diesel generators and adding a couple of big wind turbines would be a better fit, the report recommended.
Since then, the local task force assigned at looking at energy issues has been studying the idea of a municipal buyout of BIPCo. Recent months of closed-session meetings are expected to result in a recommendation to Town Council some time in the next few months.
Upstate, the focus has been on the governor’s plans for offshore wind farms and a wave energy farm, both potentially south of Block Island. The state energy commission has held a series of meetings inviting public input, and the governor announced an understanding with a wave energy company to build a pilot plant here.
Meanwhile, BIPCo never let go of the idea of a cable, McGinnes said.
The company first proposed the idea in the late 1990s, after incurring fines for running its generators without the proper permits. The economics never seemed to work. What makes the idea feasible now is the prospect of $5 million in grant money, says McGinnes. A cable would also allow the company to sell off land now used for the plant, raising another $3 million, according to BIPCO’s grant application.
That would bring the project cost down to $13 million, allowing the company to drop the price of electricity by 23 to 30 percent.
A cable would also make it easier for BIPCo to go green, McGinnes says. Without one, wind or wave turbines could overload the system. But the cability to offload excess energy to the grid would mean no limit to the amount of renewable energy the island could harness and then sell.
BIPCo has obtained a quote of $3 million to install a large wind turbine on company grounds, McGinnes said, but doesn’t currently plan to move forward with it unless it builds a cable.
BIPCo applied last fall
Mary Jane Balser, a former council member and current affordable-housing project manager for Block Island Economic Development, served as BIPCo’s grant writer. She submitted the packet to the USDA last September. She would be project manager, according to the application, if the cable plan moves forward.
The application describes the island’s isolated situation and high utility costs. “Block Island is unique and needy,” reads the narrative, before describing the seasonal variation in demand for all utilities that creates pressure to build expanded infrastructure that isn’t needed and doesn’t generate money much of the year. Taxpayers have funded improvements to the water and sewer systems, the school and Town Hall; residents have protected land for conservation; volunteers provide emergency services; utility rates are some of the highest in the nation, and a tax cap means the town has no more money to spend, it says. Meanwhile BIPCo must remove underground fuel tanks by 2015 and needs to update much of its equipment, and fuel prices keep rising.
Then this grant was announced “and a cable became a very real and attainable long-term solution” to provide “more power, stable power, and at a reasonable rate reduction.”
Adding a fiber optic cable, at a projected cost of $350,000, would bring cable TV and internet to the island to compete with the satellite and telephone services now available, making telecommunications easier, says the application.
McGinnes was a former owner of the now-defunct Block Island Cable TV.
If the company were to win funding for a cable, McGinnes says it would keep two back-up engines to use if the cable develops problems. The engines would have the capability to meet the island’s full power needs during most of the year, although it would have to institute emergency rollng blackouts during peak summmer demand.
But McGinnes says that’s an unlikely scenario. Underwater power cables have been severed in boating accidents, he says, when they lie on the ocean floor; but never when buried, as BIPCo proposes.
In anticipation of moving forward on the project, BIPCo sent a representative to a state Coastal Resources Management Council (CMRC) meeting this week on fees for submarine cables. The fees wouldn’t apply because they’re meant only for trans-Atlantic cables, says CRMC spokeswoman Laura Ricketson-Dwyer.
McGinnes received a letter of response from USDA this week promising a decision within a month. He says he’s optimistic that the federal agency will judge the application favorably. “They said it was the most complete application they had ever seen,” he says. “If we don’t win anything in 2007, I think we have a good chance for 2008; we can look at our scores [from the 2007 round] and tweak the application.”
The pot for the 2007 USDA grants was much larger than this year’s. More then $20 million was up for grabs in the round BIPCo already applied for, aimed at markets with unusually high energy costs.
That describes Block Island, where January bills from BIPCo show a total power cost of 41 cents per kilowatt hour for island residents, with more than half of that coming from a fuel surcharge. It’s almost three times as much as residents pay across the sound in mainland Rhode Island, where National Grid applied for a rate increase last December that would bring total costs up slightly, to 15 cents a kilowatt hour.
Big plans for wind/wave?
Ambitious plans for wave and wind energy plans that garnered lots of attention upstate last fall seem to have stalled. National Grid, the large utility that serves Rhode Island, Massachusetts, New York and New Hampshire, has changed policy and announced it will commit to long-term contracts for buying wind and wave energy. That means that establishing a state energy body with bonding authority is no longer necessary, as private developers can negotiate with the utility.
Meanwhile the state is working to line up its permitting process and identify issues associated with offshore renewable energy installations. CRMC is working in partnership with the University of Rhode Island on a formal application process; it could take another year before it is ready, state officials have said. Until then, the private companies that would install offshore wind and wave farms are waiting in the wings.
Private development could mean Block Island gets left out of the loop, McGinnes says. Without a guarantee from the state that any cable would touch land here, he thinks it would make more sense for developers to lay it straight to the mainland. “We could end up with a lousy view of the south of the island and that cable will go straight past us to Charlestown,” he says.
State energy commissioner Andrew Dzykewicz came to Block Island to see McGinnes in mid-January to discuss a pilot wave plant announced as part of a state deal with wave company Oceanlinx last fall. The test plant could get streamlined permitting.
McGinnes says BIPCo is ready and willing to work with the wave company, but he hasn’t seen anything in writing yet. Dzykewicz did not return calls for comment this week. Oceanlinx’s web site posted an announcement this month about signing an agreement to install wave turbines off the north coast of Maui.
By Pippa Jack
18 February 2008
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