July 29, 2012
Rhode Island

Town will not condemn BIPCo, says EUTG

By Stephanie Turaj | The Block Island Times | block-island.villagesoup.com 28 July 2012

Collaboration between the town and Block Island Power Company to jointly file for a electricity rate increase – to pay for an upgrade to BIPCo’s distribution system – have stagnated, and it was unclear why until the Electric Utility Task Group’s July 23 meeting.

Then, an exchange between BIPCo CEO Cliff McGinnes Sr. and Electric Utility Task Group member Everett Shorey shone some light onto what was going on.

McGinnes was under the assumption that the town was planning to go ahead with condemning the power company. Condemnation is the process by which a government entity forces the sale of a private property by eminent domain.

“We said ‘Don’t do it.’ There is no eminent domain issue, period,” said Shorey.

The issue first surfaced when Entech Engineering owner Chris Warfel wrote to the task group in February, urging them to support BIPCo condemnation by the town as a way to convert the utility company to a ratepayer owned model. Members had voted to ask the council whether it wanted the EUTG to revisit the condemnation option.

What followed was a discussion of costs and the legal process that would be involved in condemnation. At a March 16 meeting, members warned that costs could be expensive, and First Warden Kim Gaffett suggested the task group describe the positives and negatives of pursuing a condemnation strategy for the council. The task group agreed to draft a letter to the council at a future meeting.

At the July 23 meeting, Shorey said that a report had been submitted to the town advising against condemning the power company, and therefore there should be no further issue with eminent domain.

However, McGinnes said he has not received the report, nor does he recollect the final report being discussed at a Town Council meeting.

He requested a formal letter from the town to state this in writing, and Town Manager Nancy Dodge said she would work on this letter. Subject to this letter stating the town would not condemn BIPCo, McGinnes said he would return to discussions about the joint effort to file for a rate increase and upgrade the distribution system.

Despite Deepwater’s claims that decommissioning costs of its Block Island wind farm would be covered, EUTG members remain cautious, but ultimately Shorey reported that he had asked Mike Hickey – a community member who had originally raised the decommissioning question – to work on a formula that would help estimate what projected decommissioning costs could be, although Wilson warned that it’s too soon to determine final costs and processes.

At the May EUTG meeting, Hickey had first posed the decommissioning question to the EUTG. Hickey had suggested the town and EUTG calculate those costs independently of Deepwater Wind, and the EUTG had agreed.

EUTG member Bill Penn also inquired about the corporate structure of Deepwater, asking, “Who owns that wind turbine? Because that’s the entity that’s going to be on the hook for maintenance and decommissioning.”

“In some ways it’s still in the process as far as outside investors coming in, but ultimately the wind farm will be owned by Deepwater Wind, Rhode Island LLC,” responded Bryan Wilson, island liaison for Deepwater. However, he added that there would be a fund and bonding set up to cover decommissioning costs. Wilson also said that in the permitting process, questions of funding have already been raised and are being addressed, echoing comments previously made by Deepwater Chief Administrative Officer Jeff Grybowski.

In hopes of allaying any additional concerns, Wilson suggested, in the future, Deepwater blindly funding an outside consultant for the town to determine decomissioning costs – Deepwater would have no say in who was chosen by the town as a consultant, but would provide the funds necessary to do so.

Wilson also provided additional updates regarding Deepwater. He said they are in the permitting process for a Bureau of Ocean Energy Management (BOEM) application to the CRMC, which includes permitting information about the substation cable.

Coming down in August is the meteorological tower at the Coastguard station – the meteorological research was conducted for three years.

BIPCo and the town will team up for a separate matter: the two entities plan to collaborate on applying for an energy utilities grant. In the past, the town and BIPCo have applied separately for this Rural Utilities Services (RUS) grant, with no success. With this in mind, and a deadline application about a week from the EUTG meeting, EUTG members suggested that the two entities file together. Shorey suggested that this would allow the town to input a community-based focus, and BIPCo could add its technical input. BIPCo would ask for grant funding to cover an upgrade to smart meters (a meter that monitors electrical use in “real time” and communicates use back, instead of having an individual go out to read each property’s meter).

Members also decided to put out a RFP for a purchase power agreement for solar panels on yet-to-be-determined town buildings. Energy company Johnson Controls had proposed the installation of solar panels on town buildings in the company’s comprehensive energy plan it had submitted for the town’s review.

However, if the town backed the Johnson Controls project, various federal tax credits would be ignored. Shorey suggested that he work on finding similar RFPs that would call for a third party to install the solar panels.

EUTG members revisited another previous meeting’s discussion regarding replacing current streetlights with LED lights, but remained uncertain if LED lighting would be a viable option.