When the New York Power Authority deflated plans last fall for the Great Lakes’ first offshore wind farm, it justified pulling the plug by highballing the price tag.
But confidential NYPA documents obtained by the Times Union reveal that figure – $100 million annually for 20 years – to be double what the authority privately expected it would cost.
But if it wasn’t about the money, why did the project, initially touted as a pioneering bid to harvest steady lake winds for electrical power, get shut down?
The in-house paper trail of staff reports leading to the demise of the Great Lakes Off-Shore Wind (GLOW) project shows the administration of Gov. Andrew Cuomo apparently turned its back when asked for help.
That adds even more mystery to the killing of high-profile renewable energy, since Cuomo as a candidate called for state support of offshore wind power. The governor’s office disputes its presence in the NYPA paper trail, with a spokesman questioning whether that report was ever shared with the NYPA board of trustees, which voted to kill the project.
Apprised last week of the internal NYPA documents, Brian Smith, program director for Citizens Campaign for the Environment, said, “This shows that the authority’s decision was a sham … NYPA exaggerated the costs, but completely ignored the benefits. They killed this project without any details being revealed to the public, and that stifled any debate. This was a huge missed opportunity for the state.”
After launching GLOW in 2009, NYPA spent nearly two years behind closed doors with five undisclosed developers that offered to build a wind farm in the eastern waters of either Lake Erie or Lake Ontario. All negotiations were secret and no details, including the identities of potential developers, were made public.
On Sept. 27, NYPA announced it was scrapping the project, claiming its electricity would require annual average subsidies of up to $100 million for 20 years. The authority offered no details on how it arrived at that figure, which reflected the extra expense it could cost NYPA to buy the wind farm’s power, compared to traditionally generated electricity.
But internal NYPA documents show the “expected” subsidy to the most competitive developer – Great Winds LLC, a joint venture based in Cape May, N.J. – would average $58 million annually, according to an April 13, 2011 confidential report authored by Jill Anderson, currently chief of staff to NYPA President and CEO Gil C. Quiniones.
That smaller projected subsidy for Great Winds’ proposed 150-megwatt turbine farm in Lake Erie near Buffalo reflected “expected market conditions,” and chances were good it could even be as little as $52 million annually, according to the report.
The larger $100 million subsidy highlighted by NYPA reflected the “worst market conditions” that had less than one chance in 10 of occurring, according to its internal April document.
Responding to questions about the documents, the authority issued a prepared statement Friday that repeated the September message that GLOW would have been too expensive. “Under the challenging economic climate at the time which continues today, that premium was considered too high for potential ratepayers. Also, today’s low gas and power prices, which are expected to continue into the foreseeable future, would make that premium even much higher,” according to the statement.
NYPA, the nation’s largest state-owned utility, took pains to keep such financial analysis from public view, releasing heavily censored records missing all salient financial implications to the Times Union under the state Freedom of Information Law. The newspaper’s request was filed shortly after the authority pulled GLOW’s plug Sept. 27, and took six months for NYPA to fulfill.
NYPA Counsel Brian Wilkie said financial and other proprietary information was removed from the records because it would harm the potential bidders if made public. He told a reporter than no fiscal analysis of potential GLOW subsidies had been done because the authority never reached a written agreement to purchase electricity from a wind farm.
Other confidential NYPA documents obtained by the newspaper also reveal that NYPA was rebuffed after asking Cuomo’s office in the spring of 2011 to throw state support behind Great Lakes wind energy so NYPA would face a smaller GLOW subsidy.
The authority requested that Cuomo add offshore wind to a renewable electricity subsidy program – which relies on a small charge added to every electric bill to give hundreds of millions of dollars to land-based wind farms, landfill gas to energy, hydroelectric and biomass projects – and had support from the New York State Energy Research and Development Authority, the state Public Service Commission and the state Department of State, according to a confidential March 1, 2011 authority report.
Tom Congdon, Cuomo’s energy secretary, told authority staff that the state “is not interested” in adding GLOW to the Renewable Portfolio Standard program, according to the April 13 Anderson document.
Disinterest in offering such support was a far cry from when Cuomo was a candidate running for governor. During his campaign in 2010, Cuomo said the state should “promote onshore and offshore wind projects,” and said offshore wind electricity would protect the state against rising fossil fuel prices in the future and make the state a leader in what could be a burgeoning Great Lakes wind farm industry, according to the candidate’s New NY Agenda.
Asked this week if Congdon rebuffed RPS financial support for GLOW, Cuomo spokesman Rich Azzopardi on Thursday issued a single word reply: “No.” He then questioned whether the NYPA report was seen by the authority’s board of trustees.
But Friday’s NYPA statemement said the authority worked with Cuomo’s office on the RPS question and other “non-confidential aspects of GLOW … Based on the prices provided by GLOW bidders, the proposed projects would not have been competitive in the RPS.”
The RPS is part of the state’s goal of obtaining 30 percent of its electricity from renewable sources by 2015. The program is run through NYSERDA and has a projected $1.4 billion available budget projected through 2024, seemingly enough to support off-shore wind.
At the time of the Anderson report, Quiniones was the authority’s chief operating officer under then-President and CEO Richard Kessel, a staunch supporter of GLOW who was to resign his post three months later under a cloud.
About the same time NYPA learned it would not get support from GLOW from Cuomo, the governor was also directing state Inspector General Ellen Biben, a longtime Cuomo aide and confidant, to investigate Kessel. Biben focused on how NYPA funded charitable organizations with little or no ties to producing power.
No charges were ever filed against Kessel, who is now a private consultant. The investigation into him has faded from public view, and Biben left her post in February.
Meanwhile, the Cuomo administration is reportedly preparing to issue its road map to open up large parts of the state to natural gas hydraulic fracturing, a technology which has drawn increasing opposition from clean energy and environmental groups.
A month after Kessel came under investigation by Biben and NYPA trustees were told that Congdon had rejected any state subsidy for Great Lakes wind power, authority staffers already were moving to end the project,
According to a May 19 authority document entitled “GLOW Competitive Solicitation Closing Plan,” that plan said the public message to justify GLOW’s demise would be the size of the needed subsidy, and that NYPA would only tell the public which firms had bid to build the project, but would “not release any additional information.”
The authority leadership was apparently keenly aware that cancelling the project could be embarrassing. A Nov. 30, 2010 confidential internal NYPA document had warned that GLOW “cancellation … will risk NYPA’s reputation and credibility” with potential bidders for future renewable energy projects.
Another confidential authority document came out Sept. 15, 2011, also titled “GLOW Competitive Solicitation Closing Plan.” It again repeated that the message presented to the public about GLOW would be about the size of the subsidy, which would be explained “only in executive session” at the Sept. 27 authority trustees meeting.
After GLOW was canceled, the NYPA news release announcing its decision also praised Cuomo for “making continued strides to bring about the development of clean alternative energy sources through a Renewable Portfolio Standard” – the very plan the governor’s office withheld months earlier from supporting the project.
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