RI Rep Rips National Grid Over $46M Offshore Cable Windfall

NEW SHOREHAM — News that Rhode Island’s largest utility generated $46 million in excess profit over four years by delivering clean electricity from a Block Island Wind Farm substation to the mainland via a 20-mile undersea cable has at least one lawmaker seeing red.

“National Grid has perpetrated a scam of the highest order on Rhode Island’s ratepayers and it is unequivocally shameful,” said Representative Anastasia P. Williams (D-Dist. 9, Providence) in a scathing statement issued today. Williams vowed to introduce legislation requiring National Grid to reimburse ratepayers.

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Last week the Providence Journal reported that excess profits were paid to National Grid entirely by Rhode Island ratepayers in the form of a surcharge, that the money far exceeded what was needed for operation and maintenance, and that none of the cash went into a reserve fund. So when National Grid last year had to rebury part of their cable that had become exposed on the beach, they decided to capitalize $31 million. That pushed the total cost of the transmission project to $145 million. And because the surcharge is based on project value, the surcharge rate is set to increase in May. The setup essentially rewards National Grid for fixing a problem of its own making and failing to save for a rainy day, reporter Alex Kufner revealed.

National Grid said it would amend the cable surcharge, but claimed that the cost recovery mechanism is perfectly legal under federal energy law. However, the Rhode Island Public Utilities Commission is looking into whether National Grid may have violated state law.

Williams today ripped into the utility and accused National Grid of stealing from ratepayers under the guise of “clean renewable energy.”

“While those of privileged means in our state probably didn’t even notice the high surcharge on their electric bill, or deemed it necessary to fight climate change, those on the lower ends of the socioeconomic scale certainly felt the financial pain that came with these bogus surcharges, which will actually increase more in May of this year,” Williams remarked.

Rhode Island Public Utilities Commission Chairman Ronald Gerwatowski was the one to discover the exorbitant earnings. Gerwatowski — who was previously chief legal counsel for National Grid — last month said the utility is “ripping off ratepayers” through charges associated with its wind energy transmission cable.

“They’re making so much money on this that it’s ridiculous,” Gerwatowski said during a commission hearing. “The company should be ashamed of itself.”

The wind farm itself is owned by Ørsted, a Danish multinational power company. Ørsted owns the cable from the turbines to the Block Island substation, but is not involved in the National Grid power cable leading from the substation to the mainland.

In addition to the transmission surcharges, National Grid receives a bonus from ratepayers for agreeing to buy power from the wind farm. In exchange for its 20-year commitment to buy clean energy, the company was rewarded 2.75% of the contract’s value, The Journal reports.