The Block Island Times
http://block-island.villagesoup.com/p/1031356

BIPCo may buy new engine for LNG fuel

By Stephanie Turaj | Jul 19, 2013
Courtesy of: Clear Energy An LNG transport tanker.

If the Block Island Power Company goes through with its plan to generate some of its power using Liquefied Natural Gas (LNG), it may buy a new generator engine to process the fuel. The company said that it would pass on the savings generated by using LNG, which could be as high as a half million dollars, to its customers.

This announcement was made by the Block Island Power Company (BIPCo) President Albert Casazza at an Electric Utilities Task Group meeting on Monday, July 15.

“We would have a dedicated engine that would only use natural gas, rather than trying to retrofit our current engines,” said Casazza.

That statement prompted BIPCo co-owner Cliff McGinnes Sr., who was seated next to Casazza, to say: “Now that the cat’s out of the bag... “ The group then continued its discussion.

BIPCo currently uses diesel to power its generators on-island. But the company is considering a switch so that 50 percent of its energy production will be created by LNG. The other 50 percent will remain diesel.

Previously, BIPCo had said it would use the same generator engine — its current engine — for both fuels, but McGinnes said he was concerned that using two fuels could wear on the engine.

“Gas runs at a lot hotter than diesel. I don’t know what the consequences might be long-term on the viability and length of service on that [the current] engine,” said McGinnes. He added that if the company did purchase another engine, it would not cost any money to power company customers.

Additionally, the Electric Utilities Task Group (EUTG) received answers to some of its previous questions about the potential switch to LNG.

The EUTG asked Clear Energy, the company that BIPCo would purchase the LNG from, what the fixed charge would be for this service.

Clear Energy did not include the charge in its response. However, it said that the charge was made up of three components: equipment rental, equipment maintenance and Clear Energy margin.

Clear Energy also said that the switch to LNG would save the power company about $300,000 to $500,000 annually — savings that would then be passed on to the power company customers. The EUTG asked Clear Energy how this amount was arrived at.

“The calculation of savings is based on present cost per KwH [kilowatt hour] utilizing diesel and the differential in using LNG at both seasonally low and high price averages. The range of $300,000 to $500,000 annually in savings reflects total delivered cost per KwH with gas at historical low and high prices,” said the written response from Clear Energy.

Deepwater decommissioning

EUTG members also discussed a draft report that had been issued in May by Stanley White Engineering, a consultant hired by the town to review the decommissioning of Deepwater Wind’s wind farm proposed for off the coast of Block Island.

Stanley White Engineering looked at what would be the best method to pay for removing Deepwater’s turbines, should the wind farm not be operational and need to be removed at any point after installation.

The report found that the best option to pay for this decommissioning would be a mix of funds — such as an escrow account, backed with a surety bond and insurance funds.

EUTG member Bill Penn said that the draft did not credit the EUTG as much as it should have — the EUTG had spent months of research on this topic, and had come to a similar conclusion as Stanley White Engineering.

“I have a real problem with this,” said Penn, referring to the fact that the EUTG had not been properly credited. “This is an insult to us.”

While other EUTG members said they did not feel quite as strongly about this as Penn did, they agreed to send a memo to a Town Council asking credit to be given to the EUTG.

Net metering

The EUTG had a brief discussion about establishing a net metering policy that could be applied to BIPCo customers.

Net metering is a policy that credits customers that produce energy (for example, a privately-owned wind turbine).

BIPCo is currently exempt from net metering regulations set by the R.I. Public Utilities Commission, and the company provides net metering on a voluntary basis.

“If we’re going to negotiate anything about net metering, the town is going to have to satisfy that there is an arms-length separation between the town and the Entech corporation,” said Casazza, referring to a renewable energy company owned by Chris Warfel, who is also a Town Councilor. Casazza claimed that there appeared to be a conflict of interest between Entech Engineering and the town.

EUTG chair Barbara MacMullan noted that the Town Council had said at one of its previous meetings that there wasn’t a conflict of interest between the two entities.

Public Comment

Resident and former Town Councilor Peter Baute commented on a request for proposal (RFP) draft prepared by the EUTG.

This draft outlines a process for installing solar panels on town buildings, in which a private company would install the panels and the town would be able to purchase the power generated.

Baute said that when this idea was presented to the current Town Council, “There was some negative comment there. I just wanted to provide some positive comment.”

He distributed a document that stated, “A 200kw solar project would likely save the town at least $80,000/year for the duration of the contract.”

He also added, “It’s probably going to benefit the retail customers.” He said that any excess energy from the solar panels would go to BIPCo, and therefore BIPCo would use less diesel fuel. The money saved from using less diesel could get passed on to the customer, said Baute.

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