Island energy group questions costs, legislation

Energy Task Group members this week continued to question language included in recently passed state legislation designed to facilitate an agreement between National Grid and Deepwater Wind.

Deepwater is proposing two offshore wind farms - potentially the first in the country - in the waters off Block Island. One would be a small five to eight wind turbine group; the second would be much larger, set approximately 15 miles east of the island in federal waters.

As part of that proposal, an underwater cable would be laid from the smaller farm to the island and another cable laid from the island to the mainland. The cost of the latter cable is estimated to be between $20 million to $30 million. Who would own and operate it has yet to be determined.

However, on Monday task group members strongly disagreed with language in the new law that requires island electricity customers to shoulder proportionally more of the cable cost because, according to members of the General Assembly, the island was going to be the primary beneficiary.

Task Group member Barbara MacMullan said the General Assembly's premise was backward. The impetus behind the mainland-to-island cable is "to get Deepwater power to the mainland," MacMullan said. "The primary purpose is to benefit the mainland customer."

She questioned the logic of asking 1,700 customers to carry a heavier monthly burden than National Grid's approximately 580,000 customers.

"We are so few that allocating more to us will not render much," she said.

National Grid estimates that its mainland customers would pay an extra 38 cents per month to finance the cable.

After Monday's meeting MacMullan estimated that Block Island's roughly 1,700 electricity customers would each have to pay approximately $3.43 extra per month to bring a mainland National Grid customer's monthly burden down just a single cent.

She said island customers should pay no more than the rest of the National Grid's customers; also, she said that if one calculated for the actual amount of energy used, then island customers should pay only an additional 26 cents per month.

At the meeting First Warden Kim Gaffett explained that regardless of how many times the island's representatives argued the cable wasn't just for the island, the attitude among lawmakers was "here's another special thing for Block Island."

Task group member Everett Shorey commented, "some state rep stuck it to us."

Bill Penn said that the prevailing opinion upstate was that most Block Island homeowners are wealthy and can afford more. He suggested pushing the Legislature to amend the language.

Shorey said that if island customers were asked to shoulder any more than $12 million of the cable's cost, then it could potentially be a bad financial move.

"Anything over $12 million is not so good," Shorey said, with task member Chris Warfel in agreement.

"There's a point when it's not worth our efforts - better to do it in-house," Warfel said.

He suggested that the small farm would be Deepwater's test-run for the much larger installation, and Block Island would act as a "guinea pig."

From the audience, Andres de Lasa of Deepwater reiterated the company's offer to pay for an independent consultant to look into the farm proposals on behalf of the town.

Gaffett said the Town Council would decide the scope of service for a consultant, and Town Manager Nancy Dodge said the town was leaning toward La Capra Associates, which had helped in previous rate cases and also had experience in the Cape Wind efforts off Nantucket.

In the end, the group decided to wait for more information. The public will have a better understanding of Deepwater's numbers on August 31, when it submits a renewable energy contract proposal to National Grid. The law then requires the PUC to approve a contract between the pair by December 31 after a public hearing process.

Post-cable concerns

"What happens in a post-cable situation?" asked Shorey. Block Island Power Co. will "change radically" if a cable is eventually installed, he said, and many questions will come to the fore: will there be a loss of coveted year-round jobs? Will the company still need three full-time managers?

"All the rules change," he said.

He also said that if BIPCo no longer needed to bill for fuel, that would automatically trigger a new rate case.

Warfel asked who would pay "stranded costs," such as debt and depreciation on diesel generators that are no longer needed.

These questions were left hanging.

Island turbine

Members said they are still looking for $50,000 to finance a feasibility study for a 600-kilowatt turbine likely to be located on property at the Transfer Station. The group has seven bids in hand, but no funds.

The Town Council is scheduling a public hearing in October to create a public utility zone to facilitate such a project.

Shorey and Penn both mentioned the many similar public/private projects are under way in New Jersey and Maine.

Warfel suggested that with both tax breaks and the renewable energy credits that could be generated by such a turbine, the project should be quite attractive to a potential developer.

Miscellany

• The group, responding to inquiries from Town Council member Dr. Peter Baute, suggested that island residents with solar systems contact BIPCo to ascertain if they qualify for net-metering.

• Baute said that the response rate to the recent survey regarding wind farms was 40 percent for island voters, and 50 percent for non-resident property owners. Shorey, expressing admiration for the figures, commented that for most surveys, "15 percent is doing well." The numbers will be reported at the Town Council meeting on August 12.

• The Block Island Residents Association will host Deepwater Wind, as well as Dr. Lefteris Pavlides, creator of the wind survey, and representatives from Portsmouth, which erected its own municipal wind turbine on at St. Andrew's Parish, Saturday, August 15, at 4 p.m.

• Task group member Tom Cardello submitted his resignation due to time constraints.