01/09/10 - Block Island residents got a first chance Tuesday to offer input to state decision makers about the wind farm proposed for within three miles of the island’s shores. The Public Utilities Commission held a hearing at Town Hall — so far the only hearing scheduled for the island — as part of its consideration of the Power Purchase Agreement reached between National Grid and Deepwater Wind. The commission will render a decision on the agreement by March 30.

The event provided a forum for residents, as well as town officials and Block Island Power Co. management, to offer their thoughts — both pro and con.

National Grid attorney Jennifer L. Brooks Hutchinson opened proceedings, saying the 24.4-cent per kilowatt-hour price reached with Deepwater “was the best possible … for this type of demonstration project.” Still, she said, Grid customers should be aware it was far more expensive than other traditional and renewable electricity sources. She expected that the average 500-kilowatt-per-month residential customer would see an increase of $1.37 per month on their bills. She called it “a reasonable starting point.”

The negotiated price does not affect Block Island residents because they are not Grid customers.

In fact, while there was a healthy exchange of views at the hearing, PUC Chairman Elia Germani made it clear that the only matter currently before the commission was the price reached between Deepwater and National Grid — not view sheds, potential effect on tourism or real estate, a cable to the mainland or the costs to Block Island residents

This perhaps accounted for why a hearing scheduled for two hours barely lasted 45 minutes.

‘A win-win’

Block Island Power Company President Albert Casazza said the company was very much in favor of the project, especially because it offered a cable to the island, which could provide higher quality and more reliable electricity.

BIPCo Chief Operating Officer Cliff McGinnes Sr. said approval of the PPA was “a first step in an important process.” He said that electricity rates on the island were not sustainable, and if oil prices reached $147 per barrel, “we’ll be right back where we were — a terrible burden on the community.” In summer 2008, Block Island had the highest electricity rate in the nation — 65 cents per-kWh — due primarily to spiking oil prices. The island’s electricity comes from diesel generators.

Town Councilor Ken Lacoste stood to offer his support for the project, which he called a “win-win situation for everyone.” He said the ongoing burning of thousands of gallons of fuel to provide electricity for the island was untenable.

Peter Baute, a member of Town Council but speaking on behalf of the Block Island Residents Association, also offered that organization’s support of the project. He said it had “enormous economic importance to the island,” especially because electricity costs put “our hospitality industry at a disadvantage.”

First Warden Kim Gaffett stood to read a statement from the Town Council in support of the farm.

Other voices

Mick Connelly asked about a recent filing with the PUC that included a map showing potential wind farm sites wrapped around the south and east sides of the island.

Deepwater Wind Chief Development Officer Paul Rich said others had approached him about the same illustration. He explained that the map came from an early state-sponsored wind study that identified areas with optimal wind. It no longer had a bearing on current events, Rich said, as the state statute says Deepwater can build no more than eight turbines (or approximately 30 megawatts of capacity) in state waters off the island.

What, Mary Stover asked, would the commission do if it became clear that a cable is too expensive for island residents to shoulder — would it advocate for “a rock with 1,000 people?” Germani replied that the commission would have to eventually weigh all aspects once the cable issue came before it.

Sandra Hopf said the island offered “beautiful beaches and view sheds,” and she suggested it needed to be determined how a wind farm would affect these. Similarly, Linda Spak pointed out that Deepwater suggested in its literature and filings that its proposed larger farm (107 turbines 15 miles east of the island) would not have a visual impact on state residents — yet Block Island is part of the state, and would have eight turbines directly in view.

“We’re going to see this everywhere,” Maggie Delia said in regard to the proliferation of wind farm proposals along the East Coast. She said it was imperative that everyone involved “get the real numbers about what this is going to do to global warming,” as well as what effect it could have on a community so reliant upon a tourism economy.

She also mentioned that the “cost of the cable is a crucial thing.”

The conversation returned to the question of the cable: what would it cost and who would own it? Also, how would that cost be allocated to island ratepayers? Suggested cable costs have ranged from $30 million to more than $50 million. And, last summer the General Assembly included language in legislation calling on Block Island residents to pay proportionally more for the cable.

Georgianne Walken called the cable question “an extraordinary unknown.”

Christopher Walken asked about the life span of the turbines and why the island couldn’t simply be tied into the larger farm that will eventually be built to the east.

Rich explained that the turbines are under warranty for 20 years — the length of the proposed contract between Deepwater and National Grid — though there isn’t a great deal of data on turbines in a marine environment.

He suggested that the idea for the smaller wind farm came from the governor and state Legislature to help the island with its “exorbitant” electricity costs.

Previously Deepwater officials have explained that the smaller farm is needed in order for the company to gain financing for the larger farm; also, they said a cable connecting the larger farm to the island would be cost-prohibitive.

Before adjourning, McGinnes stood again to suggest that once the larger farm is in operation to the east, perhaps the smaller farm on the island could be decommissioned.

After the meeting Rich stressed that the public would have more opportunity to address items such as siting and view sheds during the permitting process before the Coastal Resources Management Council and the U.S. Army Corps of Engineers.

The next hearings the PUC will hold on the matter will be January 13 in Pawtucket and January 20 in Warwick.

The Town Council statement presented at the public hearing of the Public Utilities Commission hearing held on Block Island Tuesday, January 5, 2010:

The Town of New Shoreham has always been actively involved in energy issues on island, from both a cost and environmental standpoint since our power source is the diesel generating plant on island owned by [Block Island Power Company]. Besides the Council and Town Manager’s monitoring of energy, we also have an energy task force which allows us to keep continual attention on costs, environmental impacts and reliability of energy services. When the council learned of the legislation seeking to expand the supply of renewable energy in Rhode Island by building a wind farm just off the coast of Block Island we were interested in assessing the opportunities for, and risks to the island. From inception, we have followed the legislation and its resultant regulatory process closely. As the project developed we have maintained an openness to various development possibilities and welcomed informational meetings and presentations on the island. From the town’s viewpoint, we see a broad diversity of opinion concerning this project, but it would be fair to say that a majority of island residents believe it could benefit New Shoreham as well as other communities in Rhode Island. This benefit is, of course, fully dependent on:

1. The final terms of the wind farm;

2. The proposed cable from the wind farm to the island and from the island to the mainland; and

3. The development and management of the power supply and local facilities on Block Island.

We would like to address each of these aspects of the project.

At this point, we note that the major participants — Deepwater Wind Co. and National Grid Co. (Narragansett Electric) — have reached commercially agreeable terms for the output of the wind farm through a Purchase Power Agreement (“PPA”). Our own review of their experts’ reports and testimony gives us confidence that the wind project as now conceived is commercially viable and can provide the benefits of renewable power to Rhode Island.

As part of the project, the wind power will be delivered to a point on Block Island and transmitted to mainland Rhode island. From the experts’ testimony to date, we note a great deal of precision in pricing and design of the wind farm but not of the cable. While this is understandable in that a viable wind project must exist for other aspects of the project to proceed, we find it premature to make a final determination on the cable in this particular docket, or at least this particular phase of Docket 4111. As presented by the experts, the cable sizing, routing, design and cost are either preliminary or not yet determined. Consequently, we request that the commission defer any specific review or approval for the cable project until the PPA has been acted upon and the specifications for the cable are firmly established.

Lastly, at such point that the cable project is ready for regulatory review, the Town of New Shoreham will have several associated issues, for example, new power supply, on island generation back-up requirements and local distribution enhancement. Thus, we request the commission re-affirm its prior ruling that these issues be evaluated within a fully integrated resource plan (“IRP”).

In summary, the Town of New Shoreham offers its support and cooperation to continuing the development of the wind farm off its shore; it believes that the cable project is still in preliminary planning and any evaluations or approval of the cable project or its associated procedure rate-making is premature; and lastly, when the cable is ready for review, the commission consider all of the associated utility issues affecting Block Island in the context of an IRP.

Thank you for your time and attention.