R.I. gets $269M federal loan to help clean up Narragansett Bay

EAST PROVIDENCE – Rhode Island authorities have received a $268.7 million federal loan to help pay for construction of a 2.2-mile sewage containment tunnel under Pawtucket and Central Falls to complete the largest public works project in state history.

Overall, the Combined Sewer Overflow project by the Narragansett Bay Commission is expected to cost nearly $1.4 billion, including $760 million for the final tunnel phase in order to comply with a federal mandate to clean up the bay.

State and federal officials announced the low interest rate loan Friday from the U.S. Environmental Protection Agency. The money for the Narragansett Bay Commission is projected to save its ratepayers nearly $100 million, compared to financing the project on the bond market.

The commission bills about 80,000 homes and businesses in the Greater Providence area for sewer service.

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The commission’s sewer bills have been increasing in recent years to help pay for the project. Sewer bills are expected to peak in 2025.

Construction of the tunnel is expected to start early next year, with the tunnel in operation in 2026. However, ratepayers are expected to be paying down debt from the project until about 2041.

The commission began the project in 2001 under pressure from federal officials to comply with the U.S. Clean Water Act of 1972 after the bay had become polluted, especially from sewer overflows during and after storms.

The tunnel is designed to greatly reduce overflows of dirty water into the bay by capturing and moving it to the Bucklin Point wastewater treatment plant in East Providence for full treatment.

Already the quality of water in the bay has improved significantly in recent years, aided by the completion of the first two phases of the project, according to the commission.

“We know Rhode Islanders value a clean and healthy bay,” Vincent Mesolella, the commission’s chairman, said in a statement. “We’re very proud of infrastructure investments Narragansett Bay Commission ratepayers have made over the past two decades to mitigate the century-old issue of [combined sewer overflows].”

And “the [commission] is confident that this final phase of the [project] will result in a bay that will be a beloved resource of our children and grandchildren,” he added.

On hand Friday at Bucklin Point to announce the loan was EPA Administrator Andrew Wheeler, who assumed leadership of the agency in February after being nominated by President Donald Trump and confirmed by the Senate.

Mesolella and Laurie Horridge, the commission’s executive director, also were there to sign the loan documents with Wheeler.

They were joined by Sen. Jack Reed, D-R.I.; General Treasurer Seth Magaziner; R.I. Department of Environmental Management Director Janet Coit; and EPA Region 1 Administrator Dennis Dexiel.

The loan, with a 1.9% interest rate, comes through a program created under the federal Water Infrastructure Finance and Innovation Act of 2014.

The program is a federal loan and guarantee program at EPA that aims to accelerate investments in the nation’s water infrastructure by providing long-term, low-cost supplemental credit assistance for regionally and nationally significant projects.

In conjunction with the loan, the Standard & Poor’s ratings firm reaffirmed the commission’s AA- credit rating and the Kroll Bond Rating Agency assigned a long-term rating of AA with a stable outlook for the loan, officials said.

Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.

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