Invenergy secures $18.4M water deal with Johnston

A RENDERING of the proposed natural gas-powered electrical plant in Burrillville. Invenergy Thermal Development LLC, which has proposed to build the plant, recently secured an $18.4 million water-supply contract with the town of Johnston. / COURTESY INVENERGY LLC
A RENDERING of the proposed natural gas-powered electrical plant in Burrillville. Invenergy Thermal Development LLC, which has proposed to build the plant, recently secured an $18.4 million water-supply contract with the town of Johnston. / COURTESY INVENERGY LLC

JOHNSTON – In a surprise turn of events, Invenergy Thermal Development LLC has secured an $18.4 million water-supply contract with Johnston, not Woonsocket.

During the last several weeks, the Chicago-based energy company, which has proposed to build a 1,000-megawatt gas-fired power plant in Burrillville, held simultaneous closed-door discussions with both Woonsocket and Johnston city officials, exploring possible water-supply contracts for its controversial power plant. On Wednesday, Woonsocket officials rejected the proposal; Johnston jumped at the opportunity.

“[Invenergy] will purchase from Johnston and Johnston shall supply [Invenergy] potable, treated water meeting all applicable state and federal purity standards for use by and in connection with the project,” according to its agreement.

In exchange for the water, Invenergy for 20 years will pay Johnston $500,000 per year with a 3 percent yearly escalator, and $200,000 per year in lieu of property taxes. The company will also pay $200,000 yearly for five years for youth programs.

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Additionally, Invenergy is required to build a new Water Transport Facility, or recondition an existing building, and pay for the cost of water.

“The development of a Water Transport Facility creates a unique economic development opportunity in Johnston,” according to the town.

Like the deal proposed for Woonsocket, Invenergy will truck the water from Johnston to the proposed power plant, dubbed Clean River Energy Center, in Burrillville. The agreement allowed Invenergy to meet a looming Wednesday deadline, when the company was required to submit a water-supply plan to the R.I. Energy Facility Siting Board, the regulatory body charged with the fate of the new $700 million power plant.

The project has been highly controversial. Town residents and environmentalists oppose the plant, saying it’s detrimental to the environment and unwarranted. Politicians and natural-gas advocates have lauded the project, saying it’s needed to ensure future energy demands are met, and costs are kept down.

Invenergy, which originally proposed the plant more than a year ago, hit a snag in October after the Siting Board suspended its application. The company had failed to come up with a water-supply plan after a deal with the Pascoag Utility District fell through.

For the past couple months, Invenergy has shopped its deal around to various municipalities, eventually finding a partner with Johnston.

“Invenergy is now prepared to become a new water customer of the town of Johnston,” the company said in a statement. “While we are disappointed Woonsocket decided not to move ahead with us, we’re pleased to have identified our water supplier. We look forward to continuing the review process of this critically important project.”

The majority of Johnston residents are retail customers of Providence Water, a quasi-governmental organization based in Providence. The remaining portion of the town is served by the Johnston Water District, which is a wholesale customer of the Providence Water Supply Board. Providence Mayor Jorge O. Elorza has publicly denounced the power plant, saying it would “severely hinder our ability to meet our carbon reduction goals at the state and city level.

“I do not believe that using our finite and valuable drinking-water resources for this power plant is within Providence Water’s mission,” Elorza said.

But the Providence mayor doesn’t have much power over the issue, as Providence Water customers are allowed to resell water after buying it wholesale, according to Peter J. Pallozzi, deputy general manager at Providence Water.

“We are not aware of any restrictions that the PWSB can impose on a customer that resells water,” he said.

Last year, the Johnston Water District purchased 312.9 million gallons of water wholesale from Providence Water at a rate of $1,731.16 per million gallons, costing about $541,853. However, if Johnston was to oversell its supply, effectively interfering with its ability to provide customers with an adequate supply, Providence Water said it “would take measures to place appropriate restrictions.”

The state Siting Board, now with a water-supply plan from Invenergy, will take the new development into consideration, and decide how to proceed. A Siting Board spokesman said the board would have a better sense of timing in “coming weeks.”

There are still a number of different motions filed on the issue before the board, including one from the Conservation Law Foundation to dismiss the project altogether.

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