Opposition to Deepwater Wind application fee waiver 

I am a resident of Block Island and have followed Deepwater Wind’s effort to design, build and sell its proposed development of the Block Island Wind Farm. Please accept this letter as my opposition to the Deepwater Wind application to waive the $700,000 application fee to build its proposed Block Island Wind Farm. Furthermore, all parties involved in the Project should require an Environmental Impact Study rather than having this project continue down a path of regulatory short cuts and process waivers (fees or otherwise).

The Joint Development Agreement (JDA) between the State of Rhode Island and Deepwater Wind signed in January 2009 specifically states that the purposes and objectives of the Special Area Management Plan (SAMP) are to “foster a well-informed and committed public constituency” – see SAMP Section 1(BB)(4). It has been my mission now for three years to be well-informed and to be a vocal constituency of the public in order to ensure information made available to the public was analyzed and communicated to decision makers and interested parties. On behalf of the residents of Rhode Island, you represent one of those decision-makers.

In order to justify its petition to the CRMC to waive the fee, Deepwater cites the fact that it has already reimbursed the state $3.2 million for the CRMC’s SAMP used to guide the development of offshore renewable energy in Rhode Island. The fee waiver petition and public relations initiatives undertaken by Deepwater in connection with its request to waive the $700,000 fee would have its audience believe that this $3.2 million reimbursement was discretionary on Deepwater’s part – suggesting, therefore, it should be given a break by not having to pay the statutory application fee.

Quite to the contrary, Section V(E)(2) of the JDA specifically obligated Deepwater to deposit into escrow $3.2 million for purposes of reimbursing expenditures by CRMC for costs incurred in connection with development of the SAMP. Deepwater’s obligation to pay the $3.2 million is part of its consideration and bargained-for exchange in return for the State of Rhode Island to designate Deepwater as the Preferred Developer and the State’s other obligations under Section II.C and elsewhere under the JDA. If that reimbursement obligation is directly or indirectly rebated through fee waivers, the JDA itself will be subject to attack for insufficiency or lack of consideration.

As for Deepwater’s petition for the fee waiver, it is in direct violation of Section II.E of the JDA wherein Deepwater agrees not to seek any state-paid subsidies for Deepwater’s obligations under the JDA or for the Block Island Wind Farm. Consequently, neither Deepwater nor the CRMC has authority to waive the $700,000 application fee since doing so would illegally subsidize the Project. Furthermore, a fee waiver would result in a $700,000 reduction in the specific $3.2 million reimbursement obligation contemplated by the JDA. Had the State of Rhode Island’s Department of Administration, CRMC and Deepwater contemplated the potential for a fee waive, the parties surely would have specifically addressed it while drafting the JDA.

Lastly, please be aware that Deepwater Wind and its capital providers stand to make over $127 million in profits from the power sold to National Grid under the pending Power Purchase Agreement. That represents fully 30 percent of every dollar paid for every megawatt of power to be generated by the proposed Block Island Windfarm. These $127 million in profits is after taking into account (i) cost recovery for building the windfarm, (ii) operating & maintenance expenses, (iii) cash taxes, (iv) decommissioning costs, and (v) costs of the cable (which will be paid for or reimbursed by parties other than Deepwater). All for creating just six permanent jobs – $127 million for just six jobs. Instead of waiving the $700,000 application fee, the CRMC should take the fee and fund a jobs initiative for the State of Rhode Island or have the funds specifically donated to the University of Rhode Island. Deepwater is in no position to cite financial hardship as the basis to waive this fee.

All figures cited in this letter are sourced from publicly available information in Dockets 4111 and 4185 at the R.I. Public Utilities Commission. Should you require specific citations, I can quite easily provide them to you.

Michael R Beauregard

Mohegan Trail

and Bloomfield Hills, Mich.

This letter was sent to the R.I. Coastal Resources Management Council and copied to the Block Island Times