Rhode Island offshore wind deal approved at second attempt

August 12, 2010

Rhode Island regulators have approved the amended power purchase agreement for the state’s first offshore wind project.

After a little pressure from state lawmakers, the Public Utilities Commission backed the deal between developer Deepwater Wind and utility National Grid for the 28.4MW Block Island project.

The deal represents the “crucial next step” for the project, set to build up to eight turbines.

It took an extra law drafted by the State Assembly – and a slight downward shift in the agreed price for power – to overturn the Commission’s previous verdict on the project, that it was “commercially unreasonable”.

The second attempt saw the Commission approving the deal by two votes to one.

“Robust”

Rhode Island’s Governor, Donald L Carcieri described the Commission’s review of the revised Block Island PPA as “robust and comprehensive”.

He said: “This approval marks a critical step in our bid to develop the nation’s first offshore wind project. More so, this project will jump start a new industry in Rhode Island.”

Deepwater Wind, a company backed by New York hedge fund DE Shaw & Co, must still secure PUC approval for a transmission line to connect the Block Island project with Block Island and the island with mainland Rhode Island.

Hopes are that the relatively small Block Island project will open the door to a much larger expansion project, attracting offshore wind companies to locate to the area.

Jobs

A joint statement from the state’s House Speaker and Senate President, respectively Gordon D. Fox Senate M. Teresa Paiva Weed, stressed the potential jobs that could be created at the port of Quonset Point.

The lawmakers said: “Today’s approval by the PUC allows Rhode Island to seize upon a major opportunity to bring jobs to the state and develop a new industry as a wind manufacturing and support hub for the entire eastern seaboard. ”

Governor Carcieri added: “If Rhode Island is at the nexus of an offshore wind industry in the Northeast, we expect to attract ancillary turbine, blade, and component companies to Rhode Island to support this new industry.”

Under the revised PPA, Deepwater Wind will be required to reveal details of construction and development costs for the project, with any cost savings achieved being passed on to ratepayers in the form of a lower power price.

Consultants working for the state’s Economic Development Corporation have estimated that weighing up the costs and benefits of the project suggests an overall benefit of about $100 million, with a $900 million benefit forecast for a larger expansion project.

Add your comments

http://twitter.com/mattshawblog Matt Shaw
It’s good to see Rhode Island continuing their support for renewable energy. Gov. Carcieri is right to expect an influx of industry with the advancing of offshore wind energy. But let’s not forget what that means for small businesses and local tax revenues, as well. Hopefully RI will see some of the same benefits that Cohoctan, ME, did: http://www.youtube.com/watch?v=3VMIL24ojP0 (Video, YouTube, 3:00)
http://obxcommonground.org/2010/08/30/duke-energy-axes-north-carolina-offshore-wind-pilot/ Duke Energy axes North Carolina offshore wind pilot | Outer Banks Common Ground
[...] As Rhode Island has found with its eight-turbine Block Island demonstration project, small offshore wind projects can be expensive for the capacity they provide, although in Rhode Island’s case other benefits were taken into account in last week’s PPA approval (see this BrighterEnergy.org story)*. [...]