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Deepwater deal opposed by rival firm

TransCanada argues that the Rhode Island law governing renewable-power contracts violates the Commerce Clause in the U.S. Constitution because it favors in-state projects. The law, enacted a year ago, discriminates against out-of-state energy producers and thereby restricts interstate commerce, says TransCanada.

A Canadian company that says it can provide Rhode Island with renewable power at a cheaper price than Deepwater Wind is urging state regulators to stop their review of a long-term contract involving the offshore-wind developer.

TransCanada Power has filed a motion to dismiss a case before the state Public Utilities Commission for a power-purchase agreement between National Grid, Rhode Island's main electric utility, and Deepwater, the New Jersey company proposing an eight-turbine wind farm in waters off Block Island. The PUC will hold a hearing on the motion Tuesday morning.

TransCanada argues that the Rhode Island law governing renewable-power contracts violates the Commerce Clause in the U.S. Constitution because it favors in-state projects. The law, enacted a year ago, discriminates against out-of-state energy producers and thereby restricts interstate commerce, says TransCanada.

"These measures," the motion says, "seek to shelter Rhode Island producers from competition by TransCanada and other out-of-state generators. This discrimination violates the U.S. Constitution."

In a joint filing that argues against TransCanada's motion, Deepwater and National Grid... more [truncated due to possible copyright]  

A Canadian company that says it can provide Rhode Island with renewable power at a cheaper price than Deepwater Wind is urging state regulators to stop their review of a long-term contract involving the offshore-wind developer.

TransCanada Power has filed a motion to dismiss a case before the state Public Utilities Commission for a power-purchase agreement between National Grid, Rhode Island's main electric utility, and Deepwater, the New Jersey company proposing an eight-turbine wind farm in waters off Block Island. The PUC will hold a hearing on the motion Tuesday morning.

TransCanada argues that the Rhode Island law governing renewable-power contracts violates the Commerce Clause in the U.S. Constitution because it favors in-state projects. The law, enacted a year ago, discriminates against out-of-state energy producers and thereby restricts interstate commerce, says TransCanada.

"These measures," the motion says, "seek to shelter Rhode Island producers from competition by TransCanada and other out-of-state generators. This discrimination violates the U.S. Constitution."

In a joint filing that argues against TransCanada's motion, Deepwater and National Grid say the Rhode Island law has no requirement for in-state renewable energy projects. They say the law is "non-discriminatory" and "non-protectionist."

A lawyer for the state Economic Development Corporation, which supports the Deepwater project, also defended the legislation.

"We presume the statute to be constitutional," said attorney Robert I. Stolzman.

TransCanada is a Canadian energy-marketing company with U.S. operations in Westborough, Mass., that purchases electricity from power plants and other generators and then resells it to distributors and retail customers. It is a subsidiary of a publicly traded company that has built energy projects in Canada and the United States.

The parent company is developing the Kibby Wind Farm in Maine's Boundary Mountains near Quebec. It has invested $300 million in the 44-turbine wind farm, which would sell clean energy to the power grid that serves Rhode Island and the rest of New England. Half the turbines are online and the other half will be ready in the fall, according to Kiersten Tucker, a spokeswoman for TransCanada.

The total price of energy from the Kibby project would be lower than 11 cents per kilowatt-hour, said Tucker. At that price, the power would be less than half the cost of power from Deepwater's Block Island wind farm.

Under the proposed 20-year power-purchase agreement being considered by the PUC, National Grid would pay Deepwater as much as 24.4 cents per kilowatt-hour. The starting price could be lower if Deepwater saves on development costs, but it will still increase by 3.5 percent annually. The price also does not include the cost of building a transmission cable from Block Island to the mainland, which is necessary for the project to proceed.

TransCanada contends that it should make no difference where Rhode Island gets wind power, only that it is clean and renewable.

"Whether such power supply is produced in Rhode Island or in Maine, it is equally good for the environment," Tucker said in an e-mail.

Her company's motion elaborates on the point.

"The flow of electrons derived from Rhode Island renewable sources is absolutely identical to the flow of electrons derived from Maine renewable sources," it says. "Renewable-energy sources in both states are connected to the same ISO-New England power grid. From an engineering or physical perspective, once power has been generated, there is no way to trace the moving electrons from the generation source to the consumer."

TransCanada has made a similar argument in Massachusetts in challenging the Green Communities Act, which requires electric utilities to sign long-term contracts to buy clean power. Last month, Massachusetts suspended that mandate after TransCanada filed suit. The decision by that state's Department of Public Utilities was made to allow review of a 15-year contract between National Grid and Cape Wind for the 130-turbine wind farm planned off Cape Cod to proceed.

The Green Communities Act goes further than the Rhode Island law in that it requires renewable-energy projects to be located in-state rather than expressing a preference for such projects. The Rhode Island statute says only that one of its goals is "facilitating the financing of renewable-energy generation within the jurisdictional boundaries of the state or adjacent state or federal waters or providing direct economic benefit to the state."

The Block Island wind farm would do just that, according to its supporters. A study commissioned by the state Economic Development Corporation found that the project could create as many as 100 jobs and lead to significant development at the Quonset Business Park, where it would be staged. It estimated the economic benefits for the state could total as much as $107 million. The benefits of a 100-turbine wind farm that Deepwater is also planning in waters off Rhode Island could be as much as $886 million, the study by Levitan & Associates, a Boston consulting firm, said.

TransCanada's project would not create jobs in Rhode Island. But in its motion, the company says more competition from out-of-state power generators would benefit the public interest in another way - by leading to lower electricity rates.

Deepwater and National Grid say that TransCanada is not precluded from selling power to Rhode Island. They cast doubt on the company's sincerity.

"TransCanada does not care one whit about the public interest," they say in their filing. "It is happy to see the public pay more for renewable energy, as long as the public is buying the energy from Trans-Canada and no one else."

It is unlikely the state Public Utilities Commission will rule immediately on TransCanada's motion. The PUC has set a date of Aug. 11 to issue a decision on two other motions for dismissal of the case.

Tucker, the TransCanada spokeswoman, would not say whether her company plans to file a lawsuit in Rhode Island. "TransCanada cannot speculate on what the commission may rule or any subsequent action the company may take," she wrote.


Source: http://www.projo.com/news/c...

JUL 27 2010
http://www.windaction.org/posts/27452-deepwater-deal-opposed-by-rival-firm
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