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Toray files objection to Deepwater waiver

Toray Plastics has filed its official objection to a request by National Grid and Deepwater Wind to waive a sunset clause in the Power Purchase Agreement approved by the Public Utilities Commission last summer, and argues that Deepwater has had its right to transact business in Rhode Island revoked by the Secretary of State’s office as of June 27.

The plastics manufacturer has requested a public hearing on the request for a waiver.

The Secretary’s office confirms that it revoked Deepwater Wind Block Island, LLC’s Certificate of Organization/Registration after the company failed to file an annual report for both 2010 and 2011. The only report that was filed came in 2009 when the company first registered as a Limited Liability Corporation in Rhode Island.

“Effective on June 27, 2011, Deepwater could not transact business of any kind in the State of Rhode Island,” argues Toray attorney Michael McElroy in the objection. “Accordingly, Deepwater could not legally execute the purported waiver submitted to the PUC.”

Deepwater Wind’s Chief Administrative officer Jeffrey Grybowski said that the company registered two different corporations in Rhode Island, one of which dealt with the wind farm and the other with the transmission cable. A clerical error caused duplicate reports to be sent to the Secretary of State’s Office for Deepwater Wind Block Island Transmission, LLC, while Deepwater Wind Block Island, LLC did not submit any reports. Deepwater has filed to renew its status to do business in Rhode Island.

Rhode Island allows companies to reincorporate and retroactively approve any business it had done during the time that its Certificate of Organization had been revoked. Deepwater was be required to file the annual reports and pay a $25 fine, according to Grybowski.

“The argument about whether we can do business in Rhode Island is a red herring,” Grybowski said. “It was an unfortunate administrative error but one that carries no legal weight.”

McElroy argues that the sunset provision calls for the termination of the contract between Deepwater and National Grid on June 30 if the PUC had not signed off on it, with all appeals resolved, by that date. The appeal to the Supreme Court over the contract was not ruled on until July 1, with a 10-day rehearing period following that.

The waiver provision was written into the contract to allow the parties to agree to extend the sunset clause in the event that the appeals process ran longer than the one-year time frame laid out in the contract. However, McElroy argues that once the contract expired so did the waiver clause.

“Failure to receive ‘PPA Regulatory Approval’ on or before June 30, 2011 automatically terminates the PPA, except for the obligations airising under Sections 6.1, 12, and 13 [as explained in section 8.3 of the PPA],” said McElroy in the objection. “Section 18 is the waiver provision that the parties are seeking to utilize. However, Section 18 did not survive the automatic termination…”

The objection also argues for the right to seek a review of the PUC’s ruling on the waiver in the Supreme Court if Toray decided to request one. McElroy cites state law, which allows “any person aggrieved by a decision or order of the commission” to ask the Supreme Court for a review of the decision.

Grybowski would not comment directly on the points laid out in Toray’s objection; however, Deepwater will submit a rebuttal to the PUC.

“We will respond in detail to all of Toray’s unfounded arguments in our filing with the Commission on October 17,” said Grybowski. “Deepwater Wind’s contract with National Grid remains in full effect. Toray’s baseless campaign against clean energy is as transparent as it is without merit.”

McElroy defended Toray’s record on renewable energy Wednesday, pointing to a number of clean energy projects the company has been involved in.

“Toray has just finished erecting the largest solar array in Rhode Island and has a cogeneration facility on site,” McElroy said. “They are not at all opposed to clean or renewable energy. What they are against is oppressively expensive energy.”

Deepwater Wind will have until Monday, October 17, to file its response to Toray’s objection with the PUC.