Rhode Island’s attempt to build the nation’s first offshore wind farm suffered a blow last Tuesday after a group representing the University – and several other of the state’s largest consumers of energy – expressed its opposition to the project before the state’s Public Utilities Commission.
The commission rejected a pricing agreement between Deepwater Wind, the project’s developer, and power distributor National Grid that would have charged more for wind power than the prevailing cost from other sources.
Despite vocal support from Gov. Donald Carcieri ’65, the commissioners voted unanimously against the 20-year power purchase agreement for a demonstrative eight-turbine wind farm three miles off Block Island. The wind farm, which would have been completed in 2013, was lauded by Carcieri as a major step towards developing a clean-energy hub in Rhode Island. In the project’s second phase, 106 additional turbines would have been added.
But the commission questioned the plans economic feasibility. The plan proposed an initial price of 24.4 cents per kilowatt-hour, with a 3.5 percent increase over each year of the 20-year agreement – a steep premium over the average wholesale price of 7.8 cents per kilowatt-hour paid for other sources of energy. Total above-market costs to energy consumers could eventually rise to $500 million.
The commission also cited the wind farm’s lack of scale and limited employment as factors for their rejection.
In a press statement, Carcieri called the commission’s decision “an extraordinarily short-sighted and narrow-minded decision” and pledged to work with legislative leaders to discuss other potential solutions.
According to Amy Kempe, Carcieri’s press secretary, the Deepwater plan was “the best proposal that offered significant economic development and commitment to state of Rhode Island.”
The Energy Council of Rhode Island, which represents 30 of the state’s largest energy users, including Brown, was highly critical of the plan. Chris Powell, Brown’s director of sustainable energy and environmental initiatives, is a member of the group’s board.
Steve Maiorisi, vice president for facilities management, said that Brown’s energy bill would increase by $200,000 in 2013 under the proposal. The first phase of the project would increase Brown’s energy bill by $7 million over 20 years, he said.
Maiorisi said the University’s energy costs amount to approximately $10 million annually.
“Brown fully supports renewable energy initiatives, but the proposal didn’t seem market feasible. Hopefully they’ll go back and work on it,” Maiorisi said.
Maiorisi said that the University remains committed to clean energy, purchasing over a third of its energy from renewable sources.
Maiorisi said that the energy group’s opposition to the Deepwater proposal was “simply a reaction to the market rate, not if it’s a good proposal.”
“As a member, we allow (the energy council) to represent not only us but 30 or so other institutions. When National Grid goes before the PUC, we have somebody to objectively look at what the calculations might be,” he said.
Maiorisi said that though Brown welcomes the idea of a wind farm in Rhode Island, Deepwater has to strike a balance between economic feasibility and environmental sustainability.
Maiorisi said that more dialogue between members of the energy group and proponents of the project will be crucial in understanding the calculations behind the 24.4 cents per kilowatt-hour figure.
“We are hoping to get a group of institutions together and invite people from the wind proposal to talk to us and share information. We’d like to encourage them to move forward and see where the numbers are coming from. Then we’ll wait to see how it follows out,” he said.
A representative from Deepwater Wind’s Rhode Island office declined to comment. In a press release, Chief Executive Officer William Moore expressed disappointment with the PUC’s decision. “Deepwater Wind is now forced to reevaluate our plans for Rhode Island,” he said in the release.
An earlier version of this article incorrectly indicated that the Energy Council of Rhode Island represents 60 of the state’s energy users. In fact, it represents 30.
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