
RIPUC OKs Deepwater, National Grid pact
Founder and President, SilentSherpa ECPS
Posted 8/12/2010 12:03:40 AM
WARWICK — In a split decision that conveyed the deep questions raised by some, the state Public Utilities Commission approved a contract Wednesday that opens the door for building a wind farm of up to eight turbines in state waters off Block Island. Governor Carcieri, the project’s leading supporter, praised the decision as “a critical step in our bid to develop the nation’s first offshore wind project,” that he said will jump start a new industry in Rhode Island. But Attorney General Patrick C. Lynch immediately announced he would appeal to the state Supreme Court. So will the Conservation Law Foundation. The PUC, Lynch said, “was a kangaroo court” that was forced to reach its decision because of the restrictions in legislation passed by the General Assembly. He said Commissioner Mary E. Bray, who voted against three of the four criteria used in judging the contract, “is the only one with a spine today.” The commission plans to issue a written version of its decision Monday. That is when the appeals should begin. The positive votes came from chairman Elia Germani and Commissioner Paul J. Roberti. Both said their rulings were restricted by the legislation earlier this year, not long after the PUC voted against an earlier contract as being too expensive. Specifically, the PUC approved a so-called power-purchase agreement between the turbine contractor, Deepwater Wind, and National Grid, the utility that distributes electricity. The 20-year contract sets a maximum rate of 24.4 cents per kilowatt-hour, which is more than twice the rate National Grid pays for most of its electricity. (Any cost savings in construction must go toward lowering the rate, but that base rate will increase by 3.5 percent annually.) The rate would be a bargain for Block Island, however. And the portion that is transmitted to the mainland would be such a small part of the total demand, Carcieri said, its effect would be minimal, at least on residential ratepayers. Asked about Lynch’s opposition, Carcieri said, “I don’t get him at all.” The selection of a developer was transparent, the governor said. “It was no sweetheart deal.” Deepwater has hired people, laid plans for a much larger wind farm in federal waters farther offshore, and committed to a lease at Quonset Point and a fixed price for its electricity. Prices from all other sources are variable, he said. “It will be four cents a day more,” Carcieri said. “Who wouldn’t be willing to spend that to invest in our economy, keep our money here instead of sending it to Saudi Arabia [for oil] and start a major new industry?” “I can’t think of anything where we have done so much outreach,” Carcieri said. He said there was little or no criticism until a few months ago. Opposition rose at the end of the legislative session when Carcieri and legislative leaders drafted the bill that sent a new power-purchase agreement back to the PUC with so many restrictions, some said the commissioners would have no choice but to approve it. Carcieri says he and legislative leaders simply made a policy decision for the state. The PUC is “a rate-setting body.” The consequences were heard as the commissioners discussed the four factors they were allowed to judge, according to the legislation. Is the agreement commercially reasonable? Germani and Roberti said yes, according to standards set by the law. Bray said no. She didn’t feel she had the time or the information to reach a good decision. Does the agreement pass cost savings to ratepayers? Germani and Roberti said yes. Bray said no. Deepwater has already reduced the cost of the project from $219 million to $205 million and refuses to transfer the reductions to ratepayers. Does the project provide economic benefits? Germani said the law requires the PUC to rely on a report from the state Economic Development Corporation, rather than to judge “net benefits.” The EDC said the project would generate some $107 million in economic benefits. Roberti noted two corporations, Toray Plastics and Polytop Corp., complained the project would cost them millions more in higher electric rates, costs that would probably prevent them from further major expansion in Rhode Island. At least they didn’t threaten to leave, Rosati said, so he couldn’t weigh their objections against the EDC’s positive report. But Bray said the Deepwater project will prompt $370 million in “above market costs” plus another $40 million to $50 million for a cable from the island to Narragansett — all that is far more than the suggested benefits. All three agreed on the final criteria, the environmental benefits. WHAT’S NEXT?Deepwater wind turbine project PUC written decision due Monday: The three commissioners plan to translate their oral rulings into a formal, written decision by Monday. It will be available for public review. Deepwater plans to proceed to permit review: Governor Carcieri says the next step for the project is to apply for the necessary permits from the Coastal Resources Management Council, the state agency that regulates development in state waters. Opponents plan to sue: By law, PUC decisions are appealed to the state Supreme Court, and that’s where Attorney General Patrick C. Lynch and the Conservation Law Foundation are headed. They say the Deepwater law is unconstitutional and benefits only one entity, Deepwater. |