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Deepwater Wind’s political ties helped lift $1.5B green-energy proposal to LIPA finals  

Credit:  By MARK HARRINGTON | Newsday | December 6, 2014 | www.newsday.com ~~

An outpouring of support from lawmakers and environmentalists for an offshore wind farm 30 miles from Montauk appears to have been decisive in helping push the politically connected developer’s project to LIPA’s list of finalists.

Critics of the process are concerned that political considerations and lobbying may have eclipsed less-expensive alternatives to the $1.5 billion wind farm proposed by Deepwater Wind of Rhode Island.

LIPA staff examining the economics of dozens of green-energy proposals in a bid request had been leaning against the proposed 35-turbine wind farm because of its costs, Newsday has reported. The staff’s recommendations favored more solar power, and it’s far from certain that LIPA will move ahead with the wind farm.

But Deepwater Wind was notified on Nov. 17 that it was a finalist in the bidding. The company had until Dec. 5 to submit its “best and final offer.”

“Certainly it’s disturbing as a bidder into the LIPA process to see the lowest-cost bid set aside for the highest cost bid for reasons that are unclear,” said Bill Moore, president of Hudson Energy, which worked with another firm to propose a 103-megawatt solar array in Calverton. The project was not selected as a finalist.

“Offshore wind is still 50 percent more expensive on a levelized cost basis” than the cheapest solar project offered to LIPA, said Moore, a former chief executive of Deepwater Wind.

Backers of the Deepwater project have been publicly promoting the project for months, and in October staged a rally on the same day LIPA’s board of trustees met to show their support. Deepwater, meanwhile, has spent $120,000 a year on lobbyists to advocate for the project in Albany.

Last month, Suffolk County Executive Steve Bellone, who had opposed a LIPA wind farm project while Babylon supervisor, expressed support for the Deepwater proposal, lining up at a news conference with labor leaders to say the project would create hundreds of jobs and spur a local green economy.

The Deepwater proposal would require LIPA to buy all the energy the wind farm produces at a first-year cost of just over 18 cents a kilowatt hour, a Deepwater official said. The price would escalate over the 20-year life of the contract, the company said.

Energy at off-peak hours

Supporters say the project would not only bring clean energy to the region, but would produce power at afternoon peaks and deliver it to the East End, where it is desperately needed.

Deepwater chief executive Jeff Grybowski called offshore wind “Long Island’s most cost-effective renewable energy option.”

“We can compete head to head with any other energy source,” he said in a statement. “As Long Islanders learn more about offshore wind, they are rallying around it.”

But the array also would produce lots of energy at night and in winter when it may not be needed on the grid, and LIPA would still be required to buy it at those times. The monthly bill impact could be upward of $4 for the average Long Island ratepayer. The 210-megawatt array is enough to power 120,000 homes.

Deepwater, which has yet to erect a wind turbine in the ocean, is majority owned and funded by D.E. Shaw Group, a $34 billion New York hedge fund, several of whose managers sit on the wind-farm company’s board of advisers.

David E. Shaw, founder of the fund, has contributed widely to Democratic political campaigns, including more than $38,000 to Gov. Andrew M. Cuomo’s campaigns for state attorney general and governor. Shaw tops a list of donors to President Barack Obama’s Organizing for Action campaign committee, with $1 million.

Worked for RI governor

David Hang, Deepwater’s chief financial officer, also is a senior vice president of D.E. Shaw, and Grybowski, Deepwater’s chief executive, was chief of staff to the governor of Rhode Island.

“If there is financial influence that’s trying to push for a project that should not be funded, it would be terribly disappointing because it should be not about winning but doing what’s right,” said Bonnie Brady, executive director of the Long Island Commercial Fishing Association. The group opposes the wind farm because of its potential impact on fishing grounds, including lack of access and damage to the sea bottom. “We want to be able to trust our leaders to do what’s right in face of everything.”

Deepwater’s lobbying firm has been active in pushing for the wind farm, state records show. The company has paid Tonio Burgos & Associates of Manhattan $120,000 a year to lobby state agencies, including the executive branch, Senate and Assembly, Empire State Development Corp., Port Authority, the Department of Transportation, the New York Green Bank, LIPA and the New York Power Authority. Among those registered to lobby for the company are Burgos, the firm’s founder, and Kristen Walsh, former Long Island representative for Sen. Kirsten Gillibrand.

Burgos was appointments secretary and director of executive services in the administration of former Gov. Mario Cuomo. He also served as the senior Cuomo’s commissioner of the Port Authority. Burgos has given more than $80,000 to Andrew Cuomo campaigns since 2005, and his firm has given $140,800.

Richard Azzorpardi, a spokesman for Andrew Cuomo, said the governor’s office has “no stance on any of the proposals that LIPA is currently reviewing as part of its renewable energy portfolio. This administration’s position has always been that we support renewable energy projects that make financial sense to ratepayers.”

Environmental groups

Deepwater’s ties to environmental groups also run deep. One high-profile supporter of the Long Island project is the Natural Resources Defense Council. Max Stone, managing director of D.E. Shaw, sits on the NRDC board. Basil Seggos, Cuomo’s chief environmental adviser, worked for the NRDC on urban environmental issues in the state.

Katherine “Kit” Kennedy, director of energy and transportation for NRDC, was head of the state attorney general’s environmental protection bureau under Cuomo from 2007 to 2010. Kennedy, in a recent blog entry, urged LIPA to “include Deepwater One on the short list for a renewable energy contract.”

Kennedy said in an interview Stone’s position on the NRDC board had no bearing on the group’s support for Deepwater’s project, which NRDC backs because of its merits.

There’s “a sense of excitement that Long Island could be on the cutting edge of a new American industry through Deepwater,” she said. Kennedy said she hadn’t spoken directly to the governor about the project, but acknowledged, “I talk to New York State officials about clean-energy issues, and we regularly submit comments on these issues.”

Deepwater Wind has a minority investment from First Wind, a company that is also funded by Shaw. Long Island Department of Public Service director Julia Bovey previously spent four years at First Wind as director of government affairs, after stints at the NRDC and the Federal Energy Regulatory Commission. Bovey has recused herself from any involvement with Deepwater wind-energy matters on Long Island. She declined to comment.

Ex-official joined PSEG

Chris Hahn, a former vice president at Burgos’ firm who had been listed among the staff that would lobby on Deepwater’s behalf, has since left and is now a government affairs director for PSEG Long Island.

PSEG, which reviewed LIPA power resources and called for a suspension of new projects until the review was complete by the end of next year, has a division, PSEG Renewable Generation, that is a partner with Deepwater for a 1,000-megawatt wind farm off the New Jersey coast. PSEG said that project is “on hold.” PSEG spokesman Jeff Weir said Hahn “has had no role or influence in the evaluation in this or any other request for proposals.”

LIPA trustees are to be briefed about the wind farm and other power proposals at their regular meeting Dec. 17. It’s uncertain whether trustees will vote to approve contracts, or whether the wind farm will get the green light. In a statement, the authority emphasized that “no decisions have been made at this time” on the green-energy proposal, but an “evaluation and recommendation” will be presented to LIPA’s board on Dec. 17.

Source:  By MARK HARRINGTON | Newsday | December 6, 2014 | www.newsday.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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