BLOOK ISLAND awl MES... May 9.2015 Mapping out BIPCo’s future Public encouraged to help shape policyBy Cassins Shuman ‘The Town Council hela special meet ing with the Electric Usility Task Group (EUTG) on Wednesday, April 29, to dis- ceuss potential public policy and rate design changes that may occur due to the Block Island Power Company's (BIPCo) trans- formation from a power generating and distribution company to one that is dis- bution company only. The change will ‘come about as result ofthe Block Island Wind Farm's connection to the mainland ‘via a transmission cable. When the farm becomes operational and the town’s primary eneray source in the fall of 2016 ‘twill create arippie effect on the isiand’s enerey infrastrusture that town officials are making plans to address. ‘In summarizing the mecting with the EUTG, Fist Warden Ken Lacoste said that the two groups needed to address three things moving forward: the engage- ment of a mediator to handle delibera- tions between the town and BIPCo, find. fan energy rate and policy expert who's ‘worked with similar energy infrastructure ‘models, and schedule meetings during the summer to discuss the wind farm transi- ton process moving forward. “We have a timeline of issues here that you gave us last year relating tothe Deepwater Wind project,” said Lacoste to EUTG members Barbara MacMullan, Everett Shorey and Bill Penn. “We are basically underway, and we decided 10 ‘nave this meeting in order to catch up with ‘the timeline and see where we are with it and what needs tobe discussed" MacMullan said that the EUTG had created @ puneh-ist of items that were listed in order of significance to the com- ratesrate design, and changes in policy. “At the [Public Utilities Commission) ‘meeting that Naney [Dodge] and Town Solicitor Kathy Merolla attended with Everett they talked about a process where ‘we the town, would engage with BIPCO ‘and try 10 resolve some of these issues ‘through negotiation and discussion, rather ‘than wait for arate case to bring them up.” said MacMallan,“‘And our thought on thatprocess is that it probably would make sense to use the services ofa mediator.” ‘MacMullan briefly touched on the ‘background regarding the history of the wind farm, BIPCO and the PUC. “The PUC wants an update from (the own) in June as to how we're progress ing in this effort,” said MaeMullan. “And, June’s pretty close. So, our thought was — by June we could at least have come to an understanding with BIPCo about how we're going to proceed, not so much in terms of what we're going to do, or how ‘we're going to resolve any of these issues, but gencrally how to proceed with having a mediator and so forth.” “The timeline has evolved a little bit,” suid Shotey, “because one of the things that came out of the PUC mecting is basi- cally that BIPCo has to have the complete restructuring plan and a whole new rate structure in place six months after the ‘Deepwater cable turns on, which for plan= ring purposes has been set as the summer ‘of 2017, which again is two years away, but it's not too soon to start now.” “This is am opportunity for us to doa ‘complete rewrite of the rates and design,” said Penn, emphasizing the urgent nature and importance of the issues at hand. Shorey said that it was “important to- semember that the standard rate-setting process for the PUC is that there's the Division fof Public Utilities and Carriers] and the Public Liilities Commission. The Division is kind of a staff group,” he said, “They have a staff that does the ana- lytic work. The Commission actually sets rules. Traditionally what happens is that the regulated company and the ‘ion negotiate a deal. And then they come to the town and say “by the way here's the deal, take it or leave it.” “For years we've been trying to reverse this so that we get to negotiate with BIPCo, and the Division participates, and then we take the deal to the PUC,” said Shorey. “The PUC staff said, ‘Let's try that.’ So, we're feeling like this is-a:major advance that the staff and Commission are encouraging the company to start to nego= tate with ay rather than the Division.” ‘As a result, Shorey pointed out that this “is an opportunity for the town to set some of its own policy objectives and ‘carry those into the discussion.” ‘Sceond Warden Norris Pike asked the EUTG if it thought that BIPCO would be willing to negotiate with the town. “We won't know until we try,” said Shorey. “The counsel for the PUC told us to negotiate with each other” ‘Merolla said that BIPCo’s attorney “did indicate a willingnese to sit down‘and meet with us" She also said that one ‘way to proceed “is for the EUTG to have some public meetings, getinput from what people want and then put together a plan for the Town Council, for the mediation, in terms of what they recommend. And use that plan, as adopted by the Council, asthe bass for the mediation.” ‘Tow Manager Nancy Dodge said that there is $50,000 in the town’s budget that is allocated for the purpose of han- dling the Deepwater Wind Block Island wind farm transition peocess. “There is money in the budge! going forward,” said Dodge, who had conferred with the EUTG regarding budget needs, “There's about $50,000 oF 0°" ‘There were a lot of questions raised by ‘both the Council and the EUTG concern ing the wind farm and its prospective ramifications, with the town's officials seeking keowledge about the technol- ogy and how it may impact the istand’s infrastructure, Everyone agreed that the island community needed to be educated bout the project so that the appropriate protections could be implemented through policy to protect the island's ratepayers. “This is critical,” said Dodge, refering, to educating the community during the ‘transformation process. Dodge stressed ‘that officials need to make the time during, ‘the summer to dedicate ther attention to policy changes. “This opportunity is not going to come again,” noted Dodge. “Poople are going to have to recognize that this is a really critical conversation that’s going to take place. If they do nothing else this summer they should focas on this (transformation rovess” ‘MacDullan submitted a memo dated March 20, 2015 to the Town Council regarding issues that need to be consid- cred, including changes of rate design, generation purchasing, oversight of stan- dard offer rates, not metering, BIPCo fixed costs to be recovered through rates, conservationtdemand side_management programs and distribution upgrades. The sroup is also questioning whether BIPCo ‘will continue to be excmpt from existing Jawsregulations because of being isolated ‘See BIPCo, Page 22BIPCo Continued from Page 5 from the mainland grid and if the com- pany should be prohibited from generat- ing electricity for resale using its diesel engines. ‘The EUTG expressed the urgency in addressing myriad issues associsted with the implications of BIPCo transforming from a utility that generates and dis- tributes electricity to a distribution-only company. During. the meeting Shorey and the EUTG discussed conversion when the cable becomes energized and how BIPCo will need to adapt to the new energy source. Shorey also talked about how BIPCo's overhead and fuel charge costs might change due to the utility becoming a distribution-only company, since the company will no longer be required to purchase diesel fuel to run its generators. “On the mainland the customers have the right to choose their supplier of power,” said Shorey. “Under Rhode Island law a utility ean’t be both a generator and distributor of electricity. That was the piece of this that I never understood wntil the meeting we went to (at the PUC)” “What about backup generation?” asked Lacoste. “So the presumption is that because we need backup gencration BIPCo will apply for 2 waiver,” said Shorey. “Ne one has ever applied for a waiver. But nobody knows what the rules are for granting a waiver, because no one has ever been granted a waiver in Rhode Island.” Much of the discussion about BIPCo occurred before Cliff MeGinnes, Sr, the “utility's co-owner, was in attendance. McGinnes, who arrived a little after 7 ‘pm,, said be thought the 6 pm. meeting ‘at Town Hall had been scheduled! for 7p.m. The Town Council routinely holds its meetings at 7 pan, Pike informed MecGinnes about what had transpired, assuming the Town Councit’s leadership role since Lacoste had exited the room momentarily. “Can the now cnergy supply run on vhat’s existing?” asked Councilor Mark Emmanuelle, alluding 10 the machinery that BIPCo operates. “Absolutely.” said MeGinnes. “We can continue as we have been if we have the resources Coming to us, as the way they are now.” McGinnes noted that he was hoping that the two sides could have “honest discussions” about the transformation and policy changes, The Town Council and EUTG plan to meet again to continue addressing the issues over the summer months and into the future. The Block Island Power Company facility. Arora wrk Girne