Power-line burial plan still stuck in neutral

A decade ago, supporters of burying the India Point power lines in Providence would have balked at waiting until the end of 2014 for a detailed cost estimate of the multimillion dollar project.
Now they consider it progress.
One of the slowest large infrastructure projects in Rhode Island inched forward again in December when state regulators ordered utility National Grid to produce a “construction-grade” estimate of moving the high-voltage wires strung from the Knowledge District to East Providence underground.
The engineering work needed to produce the cost estimate is itself pricey, expected to cost $1 million, and will take at least nine months.
But it’s the first tangible progress for the power-line burial plan since it became mired in a mix of bureaucratic and corporate gridlock several years ago.
“This is something we have been [seeking] for four years,” said David Riley, co-chairman of citizens group Friends of India Point Park and public face of the effort to bury the power lines. “It doesn’t mean it will happen, but it is a positive development.”
The regional transmission lines run from the Manchester Street power station over the Providence River, India Point Park and Seekonk River in East Providence on their way to the Brayton Point power plant in Somerset.
Rising estimates of the cost of putting the 1.2-mile segment between Providence and East Providence in tunnels has been the chief hurdle to making the project happen.
At least $17.2 million has been set aside for the project from a mix of government and private sources, but each time supporters have found new funding, the cost has been revised upwards, creating a gap no one is eager to pay for.
National Grid most recently pegged the cost of the project at $19 million in 2007, upping the initial estimate of $14.5 million. Since 2007, National Grid has tacked on a 3 percent cost escalation to the estimate each year, raising the current price tag to $22.7 million.
Supporters of the project point out that since the 2007 estimate, the economy slumped, the construction market dried up and inflation has remained low, calling into question the 3 percent compounding escalation figure.
“It seems unlikely the estimate for the project will increase by the 3 percent escalation figure that National Grid has applied to it, given the sluggish state of the economy and resulting stiff competition among contractors, which has led Narragansett Bay Commission’s construction projects in recent years to come in an average of 36 percent below their estimated cost,” said former R.I. Attorney General Patrick Lynch, an original driver of the project in 2003, in a December letter to state regulators.
To pay for the new cost estimate, the state Energy Facilities Siting Board, which has overseen the project since its inception, ordered National Grid to do so with interest accrued on some of the money being held for the work.
After National Grid consolidated smaller utilities, Providence and East Providence in 2004 agreed to dedicate $5.8 million in cost savings that was going to be refunded to ratepayers toward the power-line burial project.
While the project was being planned, National Grid kept the money in its accounts, but was required by the state to pay interest on it, according to National Grid spokesman David Graves.
Between 2004 and the end of 2012, the $5.8 million set aside for the project earned a healthy $2.3 million in interest, according to the most recent figures filed with the state by the utility. Graves last week said a more recent estimate was not available.
Lynch opposed use of the interest to pay for the new cost estimate on the grounds that National Grid was supposed to have already provided a detailed cost estimate.
In addition to the $5.8 million refund and $2.3 million in interest, the pool of funds dedicated to the power line project include a $2.5 million federal earmark, $2.7 million in state money, $2 million from National Grid, $375,000 in state Greenway borrowing and $1.5 million from ISO New England, the regional power grid operator.
In the 2004 settlement with National Grid over the power lines, Providence and East Providence agreed to cover any funding shortfall with dedicated electric rate increases for its residents, something that has become less popular politically as projected costs have increased.
Lynch argues that the alternatives to burying the lines, including the overhead route north of Washington Bridge, are not feasible and ISO should increase its contribution to pay for burial.
Riley pointed out that if the cost of burial has gone up 3 percent each year, so too has the cost of replacing the overhead lines and ISO’s contribution should rise accordingly.
Under the December order from the Energy Facilities Siting Board, National Grid must hire an engineering firm to do the estimate by March and have the whole thing completed in nine months.
Once the estimate is presented to the Energy Facilities Siting Board, it will likely be up to state, Providence and East Providence officials to plug any funding shortfalls, acquire land in both cities needed for the tunnels and commit to the project. •

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