General Assembly sends wind farm bills to gov.

Mon, 06/22/2009 - 4:15am

06/20/09 - In a victory for Deepwater Wind, the General Assembly passed legislation this week that provides the wind farm developer a guaranteed market for its electricity.

And as a bonus for Deepwater, the Legislature approved the bills with veto-proof margins.

“Relieved, that’s the principal feeling,” Deepwater Managing Director Chris Wissemann said Thursday. “It’s been a tenuous couple of months working with stakeholders on all sides.”

Deepwater is proposing two wind farms off the coast of Block Island. One, with five to eight turbines, would be within three miles of the southeast coast. The other, with about 100 turbines, would sit about 15 miles to the east. The smaller farm would include a tie-in with Block Island and an electricity cable to the mainland.

The legislation passed by the House on Tuesday and Senate on Wednesday forces National Grid, the state’s largest electric distributor, to purchase electricity from renewable energy projects. The bill is important for Deepwater, which will sell electricity at higher than market rates. Without the bill, National Grid would have no incentive to purchase electricity at higher prices than electricity coming from, say, a coal plant.

But to garner National Grid’s support, lawmakers included a provision that allows the company to tack on an extra profit to its electricity rates. The overall profit — ultimately passed along to customers — would equal 2.75 percent of the contract with Deepwater. National Grid has not provided an estimate about what that would mean in dollars, but it would likely put millions in the utility’s coffers.

“You want both sides to have an interest in success and I think this is what this does,” Wissemann said.

A similar clause that promised 3 percent led Gov. Donald Carcieri to veto comparable legislation passed last year. But his spokeswoman, Amy Kempe, said Thursday that new protections for ratepayers in this year’s bills changed the governor’s tune.

The new protections include a process for the Public Utilities Commission to oversee contracts between National Grid and renewable energy producers such as Deepwater. It also gives the commission the power to reject contracts it does not find “commercially reasonable.”

The bill also requires that Block Island customers pay a higher rate for such electricity than mainland electric customers. During committee hearings, lawmakers expressed concern about mainland customers subsidizing the cost of an electric cable between Block Island and the mainland. The tiered structure was included as an effort to placate those concerned legislators.

Deepwater officials have said they hope to install the cable by 2011 and have the smaller farm operational later that year. The larger wind farm would come online a few years later. The company is still waiting for the state Coastal Resources Council and scientists at the University of Rhode Island to complete an ocean Special Area Management Plan that will zone the ocean off Rhode Island for various uses, including wind farms.

In the meantime, Deepwater is forging ahead with scientific studies. It’s waiting for approval from the CRMC to install a 180-foot meteorological tower near the Coast Guard Station. It also needs approval to install an 8-foot tall Light Detection and Ranging (LIDAR) unit near the North Light. Both units collect wind data. The company needs CRMC approval because its equipment would be on the coast.