A submerged land lease and licenses for underground transmission cables for Deepwater Wind Block Island, LLC. were approved by a unanimous vote of the Coastal Resources Management Council at its Nov. 12 meeting at the Rhode Island Department of Administration.
With the approvals, Deepwater Wind would only need to meet with the CRMC for administrative approvals and sign-offs as it constructs a 30-megawatt wind farm off the coast of Block Island. The leases cover submerged land in a 250-foot radius around the turbines, as well as 50 feet to the left and right of the underground cables.
The leases were approved after about 20 minutes of discussion by the council and a summary of the agreement by CRMC staff council Brian A. Goldman.
Goldman said that the minimum payment by Deepwater Wind for the submerged land lease and transmission cables would be $150,000 per year. The payment per year could be increased based on a formula that accounts for the revenue generated by the project.
As part of the agreement, Deepwater Wind also agreed to hold $7.5 million in decommissioning costs in an escrow account. The money could be tapped for a variety of reasons, such as nonpayment of the lease, failure to maintain insurance for the wind farm, filing for bankruptcy, or failing to finish construction by Dec. 31, 2017.
Goldman said a figure of $10 million suggested by Block Island officials was determined to “include some assumptions that weren’t relevant.” However, as part of the agreement, the $7.5 million for decommissioning the turbines will be reviewed at the completion of the project, and every three years, in case the figure needs to be increased.
Deepwater Wind also agreed to be under the jurisdiction of Rhode Island courts, as opposed to New York courts, if there were any future disagreements about terms.
“We spent considerable time on these documents in executive session,” Goldman said. “On behalf of the legal team, we think the submerged land lease and the agreements for the cables satisfy the stipulations of [court] decisions.”
CRMC Vice Chairman Paul Lemont asked if Deepwater Wind’s agreement prohibited other companies from competing in that area. Goldman said that other companies could apply to CRMC for relief, for example, if they wanted to put cables in the same area, similar to how cell phone companies typically use the same tower for signals.
Councilor Michael Hudner expressed reservations about approving the agreements.
“I’m a little uncomfortable that the council is faced with approving this, because the detail is a little bit beyond our expertise,” he said. “I’ve been busy all my life and I’ve gone to law school, but there is so much about this operation I really don’t know … I think we’ve done a very good job of reviewing everything, but I don’t think we’d want to say we understood everything.”
Chairwoman Anne Maxwell Livingston said some of the apprehension could be chalked up to the nature of the new technology.
“I feel very good about the process, other than that it’s new and it hasn’t been done before, which makes you feel a little nervous,” she said.
Councilors Raymond C. Coia, Tony Affigne, and Lemont, said they had faith that Goldman and other staff members properly vetted the proposal.
“We have to at some point and time put our faith and credit into those people,” Lemont said. “I think we’ve vetted this as best as we could do it, in terms of finished product. It’s a document that makes 38 Studios pale in terms of what we put into it. When I see the work that’s been put into it, I feel pride.”
Affigne concurred with Lemont, and noted that pursuing renewable energy was a goal of the state.
“There may be some unforeseen eventualities that effect this in the future,” he said. “But at this point, we have no good reason not to proceed.”
The Block Island wind farm is projected to cost $205 million, with the installation of the cable costing an additional $60 to $70 million.
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