EUTG receives Deepwater update

If approved, construction scheduled to begin in late 2015
Sat, 03/01/2014 - 10:30am

Deepwater Wind’s CEO Jeff Grybowski and Bryan Wilson updated the Electrical Utilities Task Group on the status of the offshore wind farm ahead of the CRMC’s Ocean Special Area Management Plan subcommittee (OSAMP) public hearing that was to be held later that day on Feb. 24.

Grybowski told the EUTG that aside from Deepwater reporting on the “storm survivability” aspect of the project, he expected the hearing to be 90 percent public commentary. After a second public hearing, (to be held on the mainland later in the week) the subcommittee will make a recommendation to the full CRMC, which will make a final determination on the matter.

Asked about the possibility of a legal appeal, Grybowski said that there would be a 30 day window for an appeal to be made to the R.I. Superior Court and that Deepwater would try to get the appeal expedited if one were to be submitted.
Meanwhile, it appears that the timeline for the project has been pushed back somewhat, with the turbines themselves not expected to be delivered to Quonset until 2016. The deadline for the project states that the wind farm must be in commercial operation by Dec. 31, 2017. The foundations for the turbines would hopefully be started in the fall of 2015 and the cable installed in the spring of 2016. “This is the tricky part,” said Grybowski, explaining that the cable needs to get pulled into the foundations of the turbines. The cable would be installed in 2016 when a “weather window” opens up in the spring to begin work, with any beach work (for laying the cable) needing to be completed by the end of May.

Although the turbines won’t be delivered to Rhode Island until 2016, Grybowski told the EUTG that the manufacturing was already underway and that three of the 15 blades had been completed and delivered to Deepwater in Europe. As has been previously reported in this paper, Deepwater signed an agreement with the France-based company Alstom in late December to manufacture the turbines and had delivered funding in order to preserve the investment credits that stipulated that five percent of the hard costs had to be spent by Dec. 31, 2013.

Grybowski told the EUTG that the turbines would utilize a new technology for the motors which would be gearless. Instead of a traditional gear box, the new turbines would be “direct drive” operating with an axle turning a large magnet inside a metal cylinder. He explained that the traditional geared turbines tended to break down in marine environments and were expensive to repair. Further advantages to the new technology were that they were not as heavy, were smaller and less susceptible to failure with 50 percent fewer parts and therefore less friction.

Asked why Deepwater had gone with Alstom instead of Siemens (which is headquartered in Germany) Grybowski responded that while Deepwater had had an “agreement to agree” with Siemens, that was non-binding and had expired in 2012, adding that there was some competition between the two companies in developing this new 6 MW direct drive (gearless) technology. The Alstom Haliade 150-6MW would be 589 feet tall, with smaller rotors (than Siemens), and therefore have more of an “air gap” between the bottom of the blades and the ocean surface. The “box” would be 25 percent smaller. There are currently two of these turbines in use, one in France, and one off the waters of Belgium.

EUTG member Everett Shorey asked about how this agreement with Deepwater would affect Alstom’s financials, and whether something else would “destabilize their balance sheet.”

Grybowski responded that Alstom is an important company in France and that the country is committed to offshore wind with Alstom doing 75 percent of the work there. He added that Alstom also makes the Acela Express trains. (According to Alstom’s website, Alstom has “more than 93,000 professionals in more than 100 countries” and “as many as 7,000 employees in the U.S.” They have a manufacturing plant in Chattanooga, Tenn.) Further, he said that Deepwater had “parent level guarantees” from the company.

Deepwater was also asked to clarify the lighting that would be used on the turbines. Wilson told the group that there would be Coast Guard navigational lights at the bottoms of the towers, similar to a green light buoy with a 1.5 to 2 mile visibility range. As for the lights at the top of the units, those would be red FAA lights flashing at the slowest allowable rate and operating in a three degree narrow cone, during the night only. Wilson said that these lights would be comparable to the ones in use on the communications towers on Block Island (located at the power company) and that the visibility on the island would be similar to viewing those lights from Andy’s Way.
Concerning the decommissioning of the turbines, Grybowski told the group that the CRMC would consider that during the design phase of the project which would begin after the permitting is done. He added that the CRMC will have to sign off on all the engineering aspects of the project and that Deepwater would continue to report to the CRMC for the entire life of the project.

Bill Penn asked First Warden Kim Gaffett, who was in attendance, if the Town Council would address the decommissioning at the public hearing later that day and she responded in the positive.

In other matters, the EUTG once again discussed the new net metering policy being negotiated by the town and the Block Island Power Company. The new policy would increase the cap on production to three percent of peak usage, and include both solar and wind generated power in the equation.

The group acknowledged a letter that both they and the Town council had received from Seth Handy asking them to advocate for further changes to the net metering policy. The letter listed eight items, however, Barbara MacMullan noted that all had been addressed except for three. Those three items concerned including commercial and public installations in the policy, a monthly “true-up” (reconciliation between kilowatts produced and kilowatts used by the customer) instead of an annual one and that energy producers should be exempt from being charged a standby or back-up rate. MacMullan noted that the last was a moot point since BIPCo did not have either a standby or back-up rate.

MacMullan also noted that the new policy is now much closer to the state’s policy, which BIPCo is exempt from. After some back and forth, on the annual versus monthly true-up period and in consideration of those who pay under a seasonal use rate as opposed to an annual user rate, the EUTG settled on a motion to send to the Town Council a recommendation to negotiate with BIPCo to include all customers and use a monthly true-up for those on seasonal rates and an annual true-up for those on an annual rate. The recommendation would also rate PV (photo voltaic) systems at 80 percent of their mandated capacity when calculating the three percent cap.

Finally, the EUTG addressed upcoming expenditures that the town may need to make allowances for in their budgets in upcoming years. The group thought that that there were three areas that would need to be addressed: the cost of a consultant for a solar RFP review, power purchase agreements for municipalities and an upcoming rate-case before the PUC.

Regarding the solar RFP, the group decided that there were too many uncertainties (due to the wind farm) and that expenditures for a consultant should be set aside for now. Concentrating on a power purchase agreement for the town and preparing for a rate case before the PUC would be a better use of time and money they felt.

The rate case itself is full of uncertainties, the main one being when exactly BIPCo might file for one. Some members felt that it might occur in 2016 or 2017 while others thought it might come as soon as 2015. The group decided to consult with Richard LaCapra, a consultant for the town on regulatory issues as to what would be an appropriate amount to include in the budget for the fiscal year beginning July 1, 2014. They also thought it would be appropriate to list that amount as its own line item instead of being lumped in with an overall legal budget.

Meanwhile, the group would develop a list of issues that would be likely to come up during a rate case, emphasizing that it would be important for the town to be proactive rather than reactive as they had been in past rate-cases. And so they started making a list.