Carcieri signs wind farm legislation

Mon, 06/21/2010 - 4:00am

6/21/10 — Governor Donald Carcieri signed new wind farm legislation into law Tuesday, keeping the proposed Block Island wind farm in play for another round before the Public Utilities Commission.

The law calls upon the PUC to consider a renegotiated power contract between Deepwater Wind and National Grid.

“Today, we are taking another step forward in our efforts to be the first state in the nation to construct an offshore wind farm,” said Carcieri. “We are setting a new course for renewable energy which will reduce our reliance on foreign oil, protect our environment and grow a new, green industry which will provide thousands of good-paying jobs for our citizens in the years to come. This was a collaborative effort and I extend my appreciation and thanks to the leadership of the General Assembly … as well as the many industry experts and Block Island residents for their hard work and commitment to see this project through.”

The legislation arrived after the PUC unanimously rejected the first contract reached by Deepwater and National Grid in March as “commercially unreasonable.” In that contract, the Block Island wind farm power price began at 24.4 cents per kilowatt-hour and rose 3.5 percent a year over the 20-year life of the contract. The commission found that it would foist up to $400 million in above-market costs upon ratepayers.

The new legislation requires that a new contract between National Grid and Deepwater Wind be filed with the PUC and a decision rendered within 45 days, including public comment. It also requires the R.I. Economic Development Corporation and the R.I. Department of Environmental Management to testify before the PUC on the economic development and environmental benefits of the project.

The legislation also mandates that the contract contain an “open book” approach that requires Deepwater Wind to disclose and the Division of Public Utilities to verify the construction and development costs of the project. The concept being that the ratepayers would benefit from any cost savings achieved during the development and construction of the demonstration project in the form of a lower power price. The legislation also caps the price of the power price at 24.4 cents per-kilowatt-hour, which was the starting price in the original contract.

The new law, and the process through which it was created, was met with much opposition from both good government groups such as Common Cause and conservation groups such as Conservation Law Foundation and Save the Bay.

Current Attorney General Patrick Lynch spoke out against the law, as did two former attorney generals.

After Tuesday’s signing, Lynch released a statement saying: “Today’s bill signing of this special interest legislation is far from a celebratory occasion for residents of the Ocean State who are expected to support an ineffectual wind power demonstration project when the only viable generator of jobs and wind power for Rhode Island would be a large-scale wind farm such as Cape Wind’s project in Massachusetts. The legislation enabling Deepwater to do what is still essentially an end-run around the PUC to deliver the sweetheart deal of a demonstration project only demonstrates how determined Deepwater and its capital providers are to bring the eight-turbine wind farm to fruition. And it’s all being done on the backs of Rhode Island residents, including every small business struggling to survive and big business looking for Rhode Island to show a competitive edge rather than the favoritism demonstrated here as we push jobs out of state and pay excessively for power to get six permanent jobs and no promise that the utility-scale wind farm will ever be built.”

Still, the leaders of the General Assembly and Sen. Susan Sosnowki, who were on hand for the governor’s signing, spoke to the law’s benefits.

Sosnowski, Block Island’s senator and sponsor of the bill, said, “This important legislation is good for Block Island, and it is good for Rhode Island. It enables Block Island to obtain an electrical connection with the mainland, and facilitates a wind project which will benefit all Rhode Island residents. This demonstration project helps to grow the economy, stabilize electricity prices and protect the environment.”

House Speaker Gordon D. Fox added, “In light of the environmental disaster in the Gulf, the need for alternative energy sources is more apparent than ever. This legislation will enable Rhode Island to become a national leader in the renewable energy field ….”

President of the Senate M. Teresa Paiva Weed said, “This legislation allows our state to seize upon that opportunity to bring jobs and economic development to the state. It positions Rhode Island to be a hub of wind turbine manufacturing, and helps to make us a national leader in wind energy development.”

Finally, Carcieri punctuated why he considered the law important: “This project holds the key to Rhode Island’s economic future, serving as the catalyst for a multi-billion dollar industry that will create thousands of good paying jobs in this region and position Rhode Island as the Silicon Valley of Renewable Energy.”  

Both Paul Rich, chief development officer for Deepwater, and David Graves, spokesman for National Grid, said contract negotiations will begin again in earnest in the coming days.