Article

PUC concludes hearing on Block Island wind farm

A new wind farm off Block Island could jump-start Rhode Island's economy and make it a national leader for using renewable energy. Or it could be a risky venture that actually thwarts economic development by unnecessarily hiking local electric rates.

WARWICK - A new wind farm off Block Island could jump-start Rhode Island's economy and make it a national leader for using renewable energy. Or it could be a risky venture that actually thwarts economic development by unnecessarily hiking local electric rates.

Those were two of the key story lines heard by the state Public Utilities Commission as it wrapped up one of its most time-constrained and important public hearings Thursday afternoon.

For a simple water-rate increase, state law gives the commission nine months to hear testimony and issue a ruling.

In this case, the agency got just 45 days to consider a power-purchase agreement negotiated by National Grid, the electric distribution company, and Deepwater Wind, the company selected by the state to build a wind farm of up to eight units. The agreement would provide the underpinning for spending $205 million to erect the turbines while raising the electric bills for all residential customers by up to 1.7 percent - less than $2 a month.

The time constraint was imposed by the General Assembly and Governor Carcieri in legislation they wrote to send the issue back to the PUC after it voted against an earlier... more [truncated due to possible copyright]  

WARWICK - A new wind farm off Block Island could jump-start Rhode Island's economy and make it a national leader for using renewable energy. Or it could be a risky venture that actually thwarts economic development by unnecessarily hiking local electric rates.

Those were two of the key story lines heard by the state Public Utilities Commission as it wrapped up one of its most time-constrained and important public hearings Thursday afternoon.

For a simple water-rate increase, state law gives the commission nine months to hear testimony and issue a ruling.

In this case, the agency got just 45 days to consider a power-purchase agreement negotiated by National Grid, the electric distribution company, and Deepwater Wind, the company selected by the state to build a wind farm of up to eight units. The agreement would provide the underpinning for spending $205 million to erect the turbines while raising the electric bills for all residential customers by up to 1.7 percent - less than $2 a month.

The time constraint was imposed by the General Assembly and Governor Carcieri in legislation they wrote to send the issue back to the PUC after it voted against an earlier power-purchase agreement as too expensive.

The new agreement caps the price at up to 24.4 cents a kilowatt-hour, but pledges to pass on any savings in construction costs to ratepayers. National Grid pays 9.5 cents per kilowatt-hour for electricity from conventional sources. The Deepwater prices would increase by 3.5 percent annually, and there would be additional costs for a transmission line between the island and the mainland.

PUC Chairman Elia Germani thanked PUC staff and the many lawyers arguing for and against the agreement for getting the hearing done by the deadline. He said he didn't think it would be possible.

As to how he will vote, he said, "I haven't a clue." He and Commissioners Paul J. Roberti and Mary E. Bray are scheduled to vote on a decision at 2 p.m. Wednesday.

The commission has been hit hard in written testimony from Deepwater and National Grid, a long list of interveners largely in opposition, and dozens of public comments, which aren't considered evidence but are scrutinized anyway.

The most-prominent comments probably were submitted by Carcieri, House Speaker Gordon D. Fox and Senate President M. Teresa Paiva Weed last week. Their letter said approval of the power-purchase agreement was a critical step in development of an offshore-wind industry in Rhode Island and that this first project would generate $100 million in economic benefits.

When the letter was mentioned during the hearing Wednesday, Germani stressed it was merely comment and not evidence and said, "We'll give the letter exactly the amount of attention it deserves - between slim and none."

When the laughter died down, Germani added: "And slim just left town."

The commission on Wednesday must also rule on three motions to dismiss the case that were filed by Attorney General Patrick C. Lynch, the Conservation Law Foundation and TransCanada Power, a Canadian company that says it could provide renewable energy for Rhode Island at a far cheaper price - less than 11 cents a kilowatt-hour, from a wind farm it is developing in northern Maine.

Lynch and the CLF don't like the expedited process that was established by the state law. Lynch called the legislation unconstitutional and designed to benefit just one party, Deepwater Wind.

The Ocean State Policy Research Institute, a conservative group, presented a witness who argued the new agreement would stifle economic development.

Two manufacturers, Toray Plastics of North Kingstown and Polytop Corp. of North Smithfield, argued the new deal would cost them millions of dollars in increased electric rates.

On Thursday, Seth Parker, a consultant for the state's Economic Development Corporation who prepared a report extolling the project's economic benefits, said he believes the rates for electricity that are expected to be produced by the Cape Wind wind farm off Nantucket would be lower, about 18 cents per kilowatt-hour, because that project is much larger and enjoys economies of scale.

Cape Wind would be 16 times larger, he said, and that would allow it to negotiate better prices with contractors and equipment suppliers.

He added that some significance should be given to the fact that National Grid negotiated both contracts.

"National Grid has a lot of internal resources," said Parker. "They are a big, capable company, so I don't see any reason to doubt the process."

Nearly all the legal arguments and opinions can be viewed at www.ripuc.org.


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

AUG 6 2010
http://www.windaction.org/posts/27583-puc-concludes-hearing-on-block-island-wind-farm
back to top