The Block Island Times
http://block-island.villagesoup.com/p/930349

BIPCo applies to buy generator

By Stephanie Turaj | Dec 03, 2012

The Electric Utilities Task Force Group announced at its Monday, November 26, meeting that the Block Island Power Company applied with the Public Utilities Commission to purchase a generator engine, because of an expiring agreement the company has to use the engine for free.

If the application is approved, Caterpillar, the company that currently allows BIPCo to use “Engine 26”, would sell it for $566,400. BIPCo would buy it with a 5-percent loan from Caterpillar for the full amount.

Costs for this purchase would not result in a ratepayer increase, but are factored into the company’s capital budget, owner Cliff McGinnes Sr. later told the Times. (No representative from BIPCo was present at the meeting, nor was a reporter from the Times.)

McGinnes said that BIPCo struck a deal with Caterpillar to use the engine at no cost because it was in BETA testing. After the BETA testing, BIPCo could purchase the generator, rehabbed by Caterpillar, at a discounted rate. Otherwise, the engine could cost more than $1 million.

With an offshore windfarm planned to start construction next year, it struck some people as odd timing to make such a big investment in diesel generation — that perhaps, costs could be better used elsewhere. “There are some questions about it making sense if Deepwater is going to happen,” EUTG Chair Barbara MacMullan told the Times.

But McGinnes disagreed, noting he would need a generator either way, so purchasing it at a discounted rate would make the most sense.

Deepwater comments and updates

Earlier this month, the EUTG sent a recommendation to the Town Council for the Deepwater Wind project, as part of the U.S. Army Corps of Engineers public comment period.

Because the Army Corps extended its original November 16 deadline to December 31, EUTG discussed at its Monday meeting adding information to its recommendation.

The original recommendation was overall in favor of the wind farm, and said it “should provide significant economic and environmental benefits to Block Island.”

MacMullan said that the additions would clarify certain points in the recommendation. For example, they would provide more information on other alternatives such as a town-purchased standalone cable — and why these options are less economically viable for the town than the Deepwater project.

The additions would also spell out the environmental benefits and what the reductions on emissions would be based on a Department of Environmental Management analysis.

MacMullan said that the recommendation would also explain that Block Island would receive its power from the windfarm before power is relayed on to the mainland.

Last week, the R.I. Coastal Resources Management Council opened a 60-day public comment period on Deepwater’s project.

MacMullan said that the EUTG would provide similar advisory statements to the Town Council for this public comment period — but would also include information on the decommissioning of the wind farm.

“The concern is not so much the estimated cost” of decommissioning, McMullan said, “but the mechanism to make sure Deepwater Wind has adequate funding.”

She said that Deepwater Wind promised a fully funded decommissioning fund after 15 years, when the turbine’s warranty expires. But if something happens that’s not covered by the warranty or insurance before those 15 years, that’s the issue that needs to be addressed, said MacMullan.

Bryan Wilson was on hand to answer questions from the EUTG and provide an update on the status of Deepwater’s project. He noted comments submitted to the CRMC cannot be accepted via email, only mail. The CRMC comment period will run from November 15 to January 15.

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