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Consultant criticizes contract for Deepwater Wind project

"The project will result in higher costs of electricity to commercial and industrial businesses and will serve as a negative factor in retaining and attracting businesses," Mazze said in his prepared testimony. "To businesses, there are no economic benefits to this project. Rhode Island could realize greater economic benefit by investing in energy efficiency which could support lower-cost renewable energy at a reasonable price."

WARWICK - A University of Rhode Island business professor and consultant heaped more criticism Wednesday on the proposed contract for the company seeking to build a wind farm to serve Block Island, saying it would negatively impact the Rhode Island business community and only benefit residential ratepayers on Block Island.

Edward M. Mazze said economic models, such as the one used by the state Economic Development Corporation to show benefits from the project, are designed to always generate positive values.

"Models are used primarily for political purposes to justify decisions that have already been made," said Mazze, in testimony before the state Public Utilities Commission.

"The project will result in higher costs of electricity to commercial and industrial businesses and will serve as a negative factor in retaining and attracting businesses," Mazze said in his prepared testimony.

"To businesses, there are no economic benefits to this project. Rhode Island could realize greater economic benefit by investing in energy efficiency which could support lower-cost renewable energy at a reasonable price."

Mazze was retained by two companies, Toray Plastics of... more [truncated due to possible copyright]  

WARWICK - A University of Rhode Island business professor and consultant heaped more criticism Wednesday on the proposed contract for the company seeking to build a wind farm to serve Block Island, saying it would negatively impact the Rhode Island business community and only benefit residential ratepayers on Block Island.

Edward M. Mazze said economic models, such as the one used by the state Economic Development Corporation to show benefits from the project, are designed to always generate positive values.

"Models are used primarily for political purposes to justify decisions that have already been made," said Mazze, in testimony before the state Public Utilities Commission.

"The project will result in higher costs of electricity to commercial and industrial businesses and will serve as a negative factor in retaining and attracting businesses," Mazze said in his prepared testimony.

"To businesses, there are no economic benefits to this project. Rhode Island could realize greater economic benefit by investing in energy efficiency which could support lower-cost renewable energy at a reasonable price."

Mazze was retained by two companies, Toray Plastics of North Kingstown and Polytop Corp. of North Smithfield, which argue the proposed agreement between Deepwater Wind and National Grid, the utility that distributes electricity here, would cost them millions of dollars in higher rates over 20 years.

Mazze said he was paid a $5,000 retainer plus $350 an hour to deliver his analysis of the wind farm costs.

Under cross-examination by lawyers for National Grid and Deepwater, he also acknowledged that he was paid $35,000 two years ago to prepare an economic analysis for Bluewater Wind, an early competitor of Deepwater in seeking the concession to supply wind power to Rhode Island.

The utility lawyers repeatedly questioned Mazze about why he didn't mention the Bluewater work on his resumé, and why he gave a glowing economic analysis of Bluewater's proposal to build a utility-sized wind farm while, just two years later, he slammed the Deepwater project.

Mazze insisted a lot has changed in two years, and Bluewater's proposal didn't contain any numbers specifying the cost of electricity.

Mazze said economic analyses, such as the one prepared by consultant Seth G. Parker for the EDC, show the direct financial benefits of the project, $92 million to $107 million, but not external costs, such as the impact of higher electric rates on Rhode Island businesses.

It turns out the report he criticized cost much more than his own work. Parker testified that he was paid $127,000 for his direct testimony and $73,000 for an advisory opinion supporting the power-purchase agreement. Part of that cost, per statute, was paid by Deepwater, the rest by the EDC, he said.

Parker acknowledged that he made no effort to assess the negative impacts caused by higher electric rates.

Shigeru Osada, a senior vice president at Toray, testified that his company is already at an economic disadvantage when competing with companies in the South that pay less for electricity. It has no plans for major expansion, he said, because of the high costs in Rhode Island.


Source: http://www.projo.com/busine...

AUG 5 2010
http://www.windaction.org/posts/27573-consultant-criticizes-contract-for-deepwater-wind-project
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