Featured Letter: from Deepwater Wind's CEO

Mon, 02/25/2013 - 3:30pm

To: the Editor —

For more than four years, the team at Deepwater Wind has been a part of the Block Island community, meeting with residents and business owners at coffee shops, open houses, and town meetings. We’ve invested more than $25 million in private funds into the Block Island Wind Farm and Transmission System. Our work — and the island’s vision for a secure and clean energy future — has made Block Island a national leader. The project is on track to be the nation’s first offshore wind farm — and people around the globe are watching closely.

I’ve been with the Deepwater Wind team since 2008, when the Block Island Wind Farm and Transmission System was first conceived. As a born-and-bred Rhode Islander, I’m proud to have become the company’s CEO a few months ago.

We’ve never wavered in our commitment to developing this offshore wind farm responsibly and sticking to the facts at every juncture. Although the great majority of residents support the project, we respect that some community members do not. Unfortunately, in recent weeks some of our opponents have lodged a series of erroneous and, in some cases, patently false claims.

Some have suggested that Block Islanders are uninformed about the project. These folks don’t give their neighbors enough credit. Block Islanders have been fully engaged in this issue since 2008. They’ve attended public hearings, heard their Town Council members debate the issues, written letters to the editor, and visited with us at our many open houses on the island. To claim that Block Islanders somehow have the wool over their eyes insults the intelligence of this very civic-minded community.

Few projects in Rhode Island’s history have undergone more extensive public scrutiny than this one. Let’s be clear: Our project has nothing at all in common with 38 Studios, despite what some critics have claimed. Deepwater Wind was selected for this project after winning a public competition in 2008, besting six other development companies on the merits of our proposal. The selection committee included respected academics as well as energy experts from the National Renewable Energy Laboratory.

What’s more, only private-sector funds are involved in this project – a $25 million investment to date. We continue to be baffled why some would criticize such private investment in our state. After all, if the project for some reason did not proceed, the only people on the hook would be our investors, including our primary backer, the D.E. Shaw Group and our minority investor, First Wind, a developer and operator of onshore wind farms across the country. Taxpayers and ratepayers would not owe a penny.

Some have continued to spread the outlandish claim that Deepwater Wind will reap a 100 percent return on this project. The Rhode Island Public Utilities Commission addressed this very issue and agreed that our projected return of 10.5 percent was reasonable for a project of this nature. The Rhode Island Supreme Court upheld that decision unanimously.

Some have tried to make hay of our request that the Coastal Resources Management Council, in setting our permit application filing fee, give some consideration to the $3.2 million we’ve already paid to support the state’s ocean planning process and the value that our extensive environmental studies will provide for other researchers. Plus, we’ll be paying the costs of the CRMC hearings on our permit applications. The CRMC has the discretion to set a reasonable fee, and has made adjustments before. We have simply asked that they take into consideration the money we have already paid the state.

The benefits of the Block Island Wind Farm and transmission system are real and substantiated: A projected 40 percent reduction in Block Island electricity rates; reduced carbon emissions; a reliable energy source over the life of the wind farm; and the likely decommissioning of dirty diesel generators; and a secure connection to the mainland electric grid. After many years of community discussions about connecting Block Island to the mainland grid, our transmission system provides for the first and only viable option to do just that. No other project, much less a renewable energy project, can provide these benefits.

One of the more ridiculous myths we’ve heard is that the wind farm will eventually grow in size to include dozens of additional turbines. Here are the facts: The Block Island Wind Farm is limited to 30 megawatts by state law. Using 6-megawatt turbines, that means a wind farm with a maximum of five turbines. Deepwater Wind will not build more than these 30 megawatts near Block Island. We are siting these turbines in the only suitable area of the state’s Renewable Energy Zone; the other areas along the southern side of the Island present a number of technical issues (including large boulders in the ocean floor) that make construction challenging.

Some have claimed that the transmission cable won’t be properly maintained or that it will be the island’s responsibility to maintain it after the wind farm is decommissioned. That’s just false. We’ve been clear about our plan to sell the cable to National Grid once it’s built, or even sooner, and state law provides for this. By owning and operating the cable, National Grid will add the cable to its transmission system – regulated by the Federal Energy Regulatory Commission and state agencies. National Grid will have legal obligations to maintain the cable for its lifetime.

Decommissioning is an important aspect of this project, and we take our obligation seriously. Deepwater Wind will be responsible for decommissioning costs. State regulators require that we outline our decommissioning plan before we even begin construction. That plan will include an approximately $10 million fund from wind farm revenues, in addition to the scrap value of the steel and other materials in the wind farm, that we estimate will be more than sufficient to decommission the wind farm. The fund will be held by a third party and no one, including Deepwater Wind, will be able to use that fund for anything but decommissioning. We’ll also have a robust insurance program covering catastrophic losses and a long-term warranty from our turbine manufacturer. Those insurances and warranties can provide additional funds to ensure that the project is property decommissioned when necessary.

At the end of the wind farm’s lifetime, we will decommission the project according to strict industry standards and in compliance with laws and regulations. The turbines will be removed entirely and the foundations will be removed to 10 feet below the sea floor — nothing will be left visible above or below the water line. The remainder of the pilings for the foundations and the cables will be left in place. This is best practice, because the process of digging up those components creates more impacts to the ocean bottom than leaving them there.

We’re proud of the team we’ve assembled — the nation’s best offshore wind development team — and of the jobs we’ve created so far. We’re excited to enter the construction phase, when we expect to create many dozens of jobs locally, including steel fabricators, electricians, pipefitters, boat crews, supervisors and engineers. Long-term, we’ll need a local maintenance and operations team, and expect to directly hire about half a dozen full-time employees plus a number of part-time employees and contractors over the project’s lifetime. Of course, our project has already injected thousands of dollars into the Block Island and statewide economy. We’ve hired local contractors, boat crews and other professionals, booked hundreds of hotel room nights and dined and shopped at many of the island’s businesses.

This year is a pivotal one, as we enter the permitting phase and plan to ramp up development. I’m proud of the work we’ve done thus far, and I’m excited to enter this next phase of this landmark project. We’re proud to be part of the remarkable Block Island community and we look forward to continuing an open and honest dialogue.

Jeff Grybowski

CEO, Deepwater Wind