In the early morning hours of Thursday, May 24, the Block Island Power Company successfully, and without notice, tested switching over from the electric transmission cable from the mainland to its generators, and back again.
“We’ve proven we can do it,” said BIPCo President Jeffery Wright of the process of going from the cable to generators, without any loss of service to electric customers, at the company’s Board of Directors meeting later that day.
Wright said there were “no power quality issues” experienced during the exercise that took place at 6 a.m. Previously, switching power sources has resulted in island-wide blackouts of a few minutes.
Board Chair Nancy Dodge said “Kudos to Howell [Conant] for putting the parallel operations together.”
BIPCo has also acquired a new generator, to replace “engine 26.” The new generator and all of the others are “online and commissioned,” according to Wright.
Engine 26 has long had quality issues, and the debt to finance it has not been completely paid off. Wright likened it to a “used car” that is at the end of its life but for which “the loan still exists.”
Cliff McGinnes, former President of BIPCo, and whose wife, Sara, owns one-third of the shares of the company, said that Milton Cat, the company that sold and financed the equipment to BIPCo, had not invoiced the company properly for the loan.
Milton Cat has offered to repurchase the generator through a subsidiary for $50,000. The balance of the outstanding loan is currently $268,036. Wright said that Milton Cat was “willing to share the loss with us” by forgiving 50 percent of the loan left after the purchase price is applied.
As for the low value, McGinnes said it was because it was a “tier four” engine, and couldn’t be used in the United States for environmental reasons.
No deals have yet been inked, and Wright was authorized to do further negotiating. “It’s worth a shot — all they can do is say no,” said Dodge.
Tank replacement complete
The tank removal and replacement project that started last fall is complete, including final grading of the site, and the removal of slightly contaminated soil. There is still a large pile of soil remaining that could be available for sale. The project, which involved excavating five underground tanks and replacing them with two aboveground tanks, was budgeted at $810,000, but the final cost came in at about $620,000. The cost of removing the contaminated soil, just over $50,000, will be reimbursed by the R.I. Department of Environmental Management.
Quietly waiting in the wings, but ready to enter the stage, is a new business system. BIPCo will “go live” with their new NISC (National Information Solutions Cooperative) “products” during the week of June 9. “It’s a great milestone,” said Wright.
The NISC system has components for billing, accounting, system mapping, outage management, and a meter database. There will be five years of data in the system for comparative purposes, and all of the printing and mailing of bills will be done from off-island.
For the consumer, this means a new style bill will be arriving in July for June charges. At about the same time, a BIPCo website will go live and include a “Smart Hub App.” Through the website, customers may, if they wish, sign up for on-line bill pay, including debit and credit cards, automatic bank drafts, and paperless billing. There will also be an automated messaging system.
Credit card payments will not be accepted at BIPCo’s office for “security reasons.” They are instead to be made by calling a 1-800 number managed by NISC. Before this can happen, Wright said the company must file a “credit/debit card tariff” with the R.I. Public Utilities Commission. At this point, BIPCo is planning not to charge a fee for credit/debit card payments, but to instead absorb the charges from banks.
Another filing with the PUC is due August first — a new rate design. The current overall rate structure has been in effect since 2008. A cost of service study is almost complete, and public input meetings will be scheduled for those who want to weigh in.
Initial recommendations from the “rate case team,” which includes accountant Dave Bebyn, attorney Mike McElroy, and consultant Richard LaCapra, are to “target the system charge, the seasonal rates and the residential demand charge.”
Currently, rates are divided into two seasons with higher rates from June through September. The recommendation is to go to three seasons, incorporating “shoulder” season rates for April, May, September, and October.
McGinnes asked why seasonal rates were still needed given that electricity is procured by the company at a flat annual cost.
Wright said that given the distribution system and the need for four generators, “summertime peak is still driving our costs.”