Citing high costs and low usage numbers, the Rhode Island Economic Development Corporation is moving ahead with plans to close the Quonset Steam Plant.
Built and opened during World War II, the steam plant, which provides heat to a handful of tenants at the Quonset Davisville Industrial Park, has become an economic burden the state’s taxpayers should no longer have to bear, EDC officials say.
But according to some local legislators, even tax relief isn’t a good reason to close the plant, which provides heat (for a little while longer) to one of the state’s largest employers – Electric Boat. However, Electric Boat plans to provide its own power through its own gas-fired plant.
"I am going to say it simple and sweet, the plant is needed for citizens of the state," Rep. Melvoid Benson, a North Kingstown Democrat, testified before the House Corporations Committee. "We need to keep the power plant so that business like Toray Plastics and General Electric, that have relied on this for years, will be able to continue using it."
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EDC officials disagree.
"This is a dollars and cents item," said Earl Queenan, chief financial officer at EDC. "It’s a money drain that we can’t afford to hold on to."
According to an EDC report, the facility consists of a plant for the generation of steam and electricity, together with an underground piping system capable of distributing that steam to various areas within Commerce Park.
The facility, owned by the Rhode Island Department of Transportation, is leased to the Rhode Island Airport Corporation, a subsidiary of the EDC. According to Andrew Dzykewicz, projects & regulatory manager for EDC, the organization operates the facility under an Operations and Maintenance Agreement with the RIAC.
"Basically the steam plant has only a few users other than the EDC – the National Guard and Electric Boat are two," Dzykewicz said. "We have had three major energy development agencies look at this plant, and they all agreed that you can’t make money on it."
What’s more EDC has lost many businesses that were at one time "on the steam loop," and Electric Boat is expected to come off in mid-April.
"People that were buying just aren’t buying any more," Dzykewicz said. Don Barrett, a spokesperson for Electric Boat, said the company is expected to spend $1.5 million to install its own heating system at its Quonset location
According to Queenan, the plant is currently operating at a loss of almost $650,000 annually. "In order to have a balanced budget we need to close the steam plant," he said. "Every pound of steam we sell costs the taxpayer. Over the years we have tried to increase our customer base, but we can’t get customers. We just can’t sell the steam."
Still, Rep. Suzanne M. Henseler, a North Kingstown Democrat, said that a legislation commission set up last year to look at the issue found that other alternatives besides closing it could still be looked at.
