Testimony of William P. Short III re. Deepwater Wind LLC power purchase agreement

Energy expert William Short submitted this testimony to the Rhode Island Public Utilities Commission in reference to the State's review of a power purchase agreement negotiated between Deepwater Wind Block Island, LLC and the utility Narragansett Electric Company. Deepwater Wind proposed a pilot offshore wind project with initial energy costs of 24.4 cents a kilowatt hour ($244 a megawatt hour). Mr. Short explains in detail how energy costs far exceed the project's claimed monetary benefits. His conclusion is excerpted below. The full testimony, including exhibits, can be downloaded via the links at the bottom of the page. The PUC voted to disapprove the agreement.

Q. Will the Project provide any net direct economic benefit to Rhode Island?

A. The simple answer is no. While the Project does provide some direct economic benefits to Rhode Island, its above-market costs to the ratepayers of Rhode Island far exceed that benefit. Even using the economic benefit cited by Dave Nickerson in his answer 2-4 to the Division's second data request, the lifetime, non-discounted benefit of the Project is only $48 million. Assuming that the National Grid above-market analysis is correct, the above-market cost of the Project is nearly $400 million on a non-discounted basis and $185 million on a discounted basis. The negative benefit on a non-discounted basis would be the $352 million ($400 million less the $48 million). The benefit of the Project is only 1/8th of its costs. Furthermore, if my viewpoint of future above-market cost is correct, the Project's benefit may well be only 1/9th to 1/10th of its costs.

In summary, the Project produces minimal economic benefits and, when compared its above-market costs, negative net benefits to the ratepayers of Rhode Island are produced. As such, along with all of my other comments, it is my opinion that the contract between Narragansett Electric Company and Deepwater Wind Block Island, LLC for the Project should not be approved by the Commission.

Short Testimony

Download file (978 KB) pdf

Short Testimony Apt Article

Download file (255 KB) pdf

Short Testimony Delmarva Ppa

Download file (664 KB) pdf

Short Testimony Lang Article

Download file (177 KB) pdf

Short Testimony Bloomberg Rec Prices

Download file (25.4 KB) pdf

JAN 19 2010
back to top