Lawyers: Providence can’t stop Johnston from reselling water to Burrillville power plant

City defends taxpayer funded grants that help renovate blighted areas.

PROVIDENCE, R.I. (WPRI) – Members of the Providence City Council were told Wednesday they’ll need to convince the General Assembly to amend state law if they want to restrict the town of Johnston from reselling city water to a company that wants to build a power plant in Burrillville.

During a meeting of the City Council Special Committee on Municipal Operations and Oversight, two attorneys told council members the city currently has no legal recourse to stop Johnston from purchasing water wholesale from the Providence Water Supply Board and then reselling it to Invenergy as part of an $18-million agreement with the company.

“Absent any change in the enabling legislation, neither the city nor Providence Water has any authority under the legislation to restrict what the wholesale purchasers do with the water,” city solicitor Jeff Dana told the committee.

The committee was meeting to discuss a resolution introduced by Councilman Seth Yurdin stating the council’s opposition to the power plant and questioning whether the city could prevent the use of its water at the plant. The committee voted 2-1 to send the resolution to the full council for approval.

But Dana and William O’Gara, an attorney for Providence Water, said the city doesn’t currently have the authority to take any action.

O’Gara told the committee that state law allows Johnston to purchase 150 gallons of water per day, per capita from the board, which equals roughly 540 million gallons a year. Each of Providence Water’s eight wholesale customers pays $1,731 per million gallons of water, a rate set by the R.I. Public Utilities Commission.

Earlier this month, the Johnston Town Council approved a deal with Invenergy to serve as the power plant’s primary water source for $18 million over 20 years. Johnston will provide the company with approximately 600,000 gallons of water a month. Mayor Joseph Polisena said his decision to support the deal came down to “what was best for the taxpayers.”

Invenergy originally sought to purchase its water from Woonsocket, but the City Council there rejected the proposal. Providence Mayor Jorge Elorza said he would also oppose the direct sale of Providence Water to the company, which opened the door for negotiations in Johnston.

O’Gara said there is a provision in state law that would allow Providence Water to restrict the sale of water to other communities, but the state would have to be facing a drought. While parts of the state did face drought conditions over the summer, city water officials say the Scituate Reservoir was not threatened.

“Absent a drought condition, the fact that the statute doesn’t give us other powers is an indication that our right to regulate what they’re doing with the water or reselling the water, at least based on the legislation as it exists now, appears to be limited,” O’Gara said.

The committee was also told that most of the contracts Providence Water had with its wholesale customers expired approximately 10 years ago. Only Lincoln has an existing contract with the board.

Council President Luis Aponte, who sits on the committee, said he is concerned Johnston’s deal “may set precedent that other wholesale users can put their excess capacity out to the highest bid.”

Councilwoman Jo-Ann Ryan, who chairs the committee, argued that it was never the intention of the law to allow communities to resell water for a profit.

“It’s quite frightening,” she said.

Continue the discussion on Facebook

Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan