State siting board orders developers to show cause why proceedings shouldn't be halted ..."One cannot logically claim that the transmission facilities (in Rhode Island) are needed if it is apparent that the offshore wind generation project to which the transmission facilities would be interconnected will not be economic or financially viable.”
An offshore wind farm developer seeking to run electric transmission cables under the Sakonnet River, through Island Park in Portsmouth and up Mt. Hope Bay wants more time to respond to a state order that would stay Rhode Island regulatory proceedings until questions about the project's financial viability are answered.
Mayflower Wind, which proposes running underwater electric cables from a proposed wind farm south of Nantucket to the Brayton Point facility in Somerset, filed an application with the state's Energy Facility Siting Board (EFSB) in May, proposing to deliver 1,200 megawatts through the state through the large farm, which in total would generate 2,400 megawatts of power. The cables and other transmission facilities in Rhode Island and Massachusetts would connect the offshore farm to mainland and according to the EFSB, would "fulfill obligations under long-term power purchase agreements" between Mayflower and regulated utilities in Massachusetts.
The EFSB began preliminary hearings on Rhode Island's portion of the project in August, and in early October board members voted to seek advisory opinions, moving the project forward in the Rhode Island regulatory process.
But earlier this month, the board's chairman learned that the Massachusetts Department of Public Utilities had received requests from Mayflower and another wind farm developer, Commonwealth Wind, to temporarily suspend contract approval proceedings relating to offshore wind projects before the Massachusetts PUC.
"The basis for that request was that the wind projects may not be economically viable with the current pricing under the contracts and that pricing adjustments might be necessary," the EFSB's show cause order, dated Thursday, Nov. 10, reads. "This has given rise to questions about the economic and financial viability of the Mayflower Wind project that is before the EFSB."
In the order, the EFSB wrote that Rhode Island regulators were never informed of the changing financial dynamics brought before Mayflower's Massachusetts proceedings. Such information is crucial to Rhode Island's review of the project, EFSB chairman Ronald T. Gerwatowski wrote in his Nov. 10 order.
"The EFSB should not have to rely upon news reports to learn of such material events that could substantially affect the ability of the project to obtain financing," he wrote. "All applicants filing for approval of a license must show that the project is needed. In this case, one cannot logically claim that the transmission facilities that are jurisdictional to the EFSB are needed if it is apparent that the offshore wind generation project to which the transmission facilities would be interconnected will not be economic or financially viable."
Further, he wrote, "the approval process for a license is very intensive and complex, requiring the engagement of many state and local governmental agencies. It is not reasonable or fair to those governmental agencies, including the EFSB, to spend time and resources evaluating an application for a project which may only be hypothetical in nature due to an admission by the applicant that the proposed project is not going to be financially viable."
Last Tuesday, Mayflower Wind responded to the order, asking for a waiver of the 10-day deadline for a hearing. Mayflower CEO Francis Slingsby could not be reached for comment by deadline, but in a comment to a regional news publication said that "we will share details of our response after we meet our obligation to provide the RI EFSB response required in the order."