News out of Utility District meeting is positive

Thu, 08/29/2019 - 5:45pm
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The Block Island Utility District Board of Commissioners was somewhat worried ahead of their first annual meeting that they would not have a required quorum of 15. They needn’t have been concerned — the meeting room at Town Hall was filled to capacity on Saturday, Aug. 24.

With reports from acting Chair Everett Shorey, Treasurer Bill Penn, and company President Jeffery Wright, the news was overwhelmingly positive.

Shorey emphasized the importance of the upcoming rate case — one that would come with no overall rate increase. “We’re going to deliver on that promise,” he said. With the conversion of the Block Island Power Company from a privately held for-profit corporation to a non-profit one controlled by the ratepayers, savings in many areas can be realized, mainly from savings on taxes and dividends.

Later in the meeting, Wright would quantify those savings at about $750,000 per year, some of which would be available for making improvements to the distribution system.

During his Treasurer’s report, Penn was particularly excited about the interest rates on the refinancing with CFC Bank of the $5.8 million short-term debt used to acquire the assets of the old BIPCo. “Please clap when you hear the rates,” he said. The stated rate, locked in for 30 years, is 3.66 percent, with an effective rate of 3.18 percent after discounts and “patronage dividends.” The discounts arise from having all of the debt with CFC, and the patronage is a form of dividend paid out to all the members of CFC each year.

Besides the favorable loan terms, Penn said the “tremendous amount of technical assistance” was one of the factors in choosing CFC over two other possible financing sources.

“I want to put in another plug for CFC,” said Shorey. “With all the ups and downs, they stuck with us.”

For his part, Wright prefaced his president’s report with: “First thing I want to say is congratulations.” He said he has received calls from all over the country on the corporate conversion. “What you have done here does not happen very often.” BIPCo now represents the 48th state to join the National Rural Electric Cooperative Association. “It’s a big thing,” he said.

Wright went on to praise the staff at BIPCo. He said when he first joined the company there was “A lot of anxiety, but never any anger.” Although small in number, they work as a team. “I’ve never seen a level of dedication I’ve seen from these folks.”

While seeking financing, Wright said “CFC spent a day with us. They could see a system falling apart.” When asked why CFC was willing to work with BIPCo under these circumstances, Wright said that CFC was in the business of helping customers and was confident that the cooperative model worked.

Among the recent improvements have been tree trimming, ongoing pole replacement and a new integrated software system that handles financials, billing, and outage management. “The software is super powerful. Everything is one platform. They print our bills in less than two minutes,” said Wright.

Of the outage management component, Wright said that lineman Jim Stockman gets alerts within seconds of an outage. When several outages happen at once, BIPCo knows about it. “There’s no more chasing outages. The system tells us where it is.”

There’s also a backup call center that picks up after just three unanswered rings in the BIPCo office. Wright said that the call center employees have “full access” to outage, billing, and payment systems. “All 2000 [BIPCo customers] can talk to someone at the same time.” He said that the call center services about 1000 cooperatives across the country. “They’re professionals.”

Although they pre-date the acquisition of BIPCo by the Utility District, other improvements at the plant include the removal of the underground fuel tanks and the rebuilding of the generating plant after the fire in late July 2016.

Current challenges? “Our pole plant is in dire shape,” said Wright. Over 70 percent of the approximately 2,000 utility poles are over 40 years old.

Wright told The Times that so far, about 300 have been replaced.

The other big issue to be tackled is the overall capacity of the electric distribution system. “During the summer, it’s stretched,” said Wright, particularly in the downtown area. “The ultimate goal is to rebuild the system and double the capacity,” although he likened it to “building an airplane in the air, with passengers on it.”

There were some frustrations expressed by people in the audience concerning net metering. BIPCo has reached the limit set by the state of how much capacity may be provided by customers with their own solar and wind installations. That limit is three percent of a utility’s peak output. A bill that could have increased the limit did not make it through Rhode Island’s last legislative session, which ended in late June. Lawmakers don’t go back into session until January, so any bills that BIPCo may want to introduce, either on their own or in conjunction with the Pascoag Utility District, will have to wait until then.

The question of whether to utilize BIPCo’s diesel generators in order to “shave the peak” during times of extreme energy use throughout the New England region has been debated by the commissioners at their past two meetings. Each utility participating in the regional grid pays a capacity charge each year based upon its relative usage during the annual peak, which usually occurs sometime between June and September.

“Now that we’re all here,” said Shorey, “we have a significant policy issue.” He said that while they wanted the public’s input, “ultimately it will be a decision by the board.”

By turning on one, or all four, of BIPCo’s diesel generators, the utility may reduce the amount of energy it pulls from the regional grid during a peak. If the timing is right, running one generator during the peak could save ratepayers one cent per kilowatt hour over the next year. Running all four could save four cents per kilowatt hour.

“On the one hand, there are economic benefits,” said Shorey. “On the other hand, you have to run the diesels.”

What followed was a presentation on the topic by Christina Beaudry and Michelle Coscia of Energy New England, the consulting firm that assists BIPCo in securing energy contracts and other matters.

To gauge the public’s opinion, there will be a bill-stuffer in the next utility bill and a referendum question on the ballot for the upcoming election of two Board of Commissioners seats. 

There are two people running for those seats: incumbent Mary Jane Balser, and Elliot Taubman. Each gave a five-minute speech on their qualifications and desire to serve before the meeting adjourned.