In round one of negotiations of the sale of the assets of the Block Island Power Company to the Block Island Utility District, BIPCo offered a sales price of $6 million, and the Utility District made a counter offer of $5.5 million, payable in “cash.”
Round two took place last week, with the BIPCo Board meeting on Thursday, and the Utility District meeting on Friday. At the BIPCo meeting, the Board voted to reduce its offer to $5.8 million, and then the next day, the Utility District voted to accept that offer.
The acceptance of the offer comes with some conditions: the execution of a purchase and sales agreement, securing adequate funding, that the assets have clear titles, and that any required regulatory approvals are obtained.
Utility District Board of Commissioners Chair Barbara MacMullan told The Block Island Times that “regulatory approvals” could include the R.I. Public Utilities Commission and possibly the Federal Energy Regulatory Commission. Approvals to transfer contractual agreements BIPCo holds with the operator of the New England regional electric grid and for its power purchase agreement may also be needed.
After the initial offer by BIPCo, minority shareholder Sara McGinnes filed a motion for a restraining order in Rhode Island Superior Court to prevent BIPCo from “taking any action” on its vote to sell the assets for $6 million. The judge granted that request, ruling that while no action could be taken, negotiations could continue.
At a hearing last week, the restraining order was lifted, freeing the parties not only to negotiate, but to close the deal. (The next step in the process is to negotiate and execute the asset purchase agreement. The Utility District was scheduled to begin that process at a meeting on Friday, July 27, at noon at Town Hall.)
BIPCo was scheduled to file a rate design case with the R.I. Public Utilities Commission by August first and had begun discussions on just what a new rate structure might look like. At a rate workshop last month, it was learned that the calculations for determining the revenue requirements differ depending on the corporate structure of the utility. Since BIPCo is currently a privately held “C” corporation and the Utility District is not-for-profit, the calculations would be different for each entity.
When the workshop was held, there seemed to be no clear end in sight for when a transfer of ownership to the Utility District would take place, and BIPCo decided to forge ahead with the August first filing. At their meeting last week, it was decided to petition the PUC for an extension to file the rate case in October.