Wind farm: AG Lynch wants to ‘kick the tires’

Mon, 05/24/2010 - 4:00am

5/24/10 — State Attorney General Patrick Lynch this week sent a letter to Governor Donald Carcieri suggesting that he go “all in” on his wind farm plans for Rhode Island.

The letter says Carcieri should pursue both phases of the proposed Deepwater Wind project simultaneously — the small eight turbine farm within three miles of Block Island, and a utility scale project of approximately 100 turbines farther out in federal waters. According to Lynch, not only would the economies of scale bring down costs, but the larger project would actually deliver the jobs the governor has promised would come with the wind farm projects.

However, in an interview with the Block Island Times, the state’s leading law enforcement officer made clear that his letter was intended more as a “call out” to the governor to be more honest with the state ratepayers. His proposal was made perhaps more in the tongue-in-cheek vein of “A Modest Proposal.”

For Lynch thinks the larger farm — and its promised creation of jobs — is still a bit of a pipe dream that at best is many years away. In the meantime, he suggests the governor is “ginning up” the public — and especially unions — to support the smaller wind farm that would result only in rewarding a handpicked developer with millions of ratepayers’ dollars.

Lynch, who is running for governor, has been an outspoken critic of proposed legislation that would allow the power contract between Deepwater Wind and National Grid to bypass the Public Utilities Commission. He said the bills “should offend every Rhode Islander.”

The legislation appeared in the wake of the PUC’s rejection in March of the original power contract between Grid and Deepwater for electricity generated by the small Block Island Farm only, at a price of 24.4 cents per-kilowatt-hour with 3.5 percent annual increases over 20 years. With current electricity prices in the 9 cents per-kWh range, the PUC determined that state ratepayers would have paid nearly $500 million above-market over the life of the Deepwater contract.

The new legislation, which would put the contract decision in the hands of four governor-appointed officials — a “star chamber,” according to Lynch — and would allow for no appeal, has been excoriated as an end-run around a well-established regulatory process and a blot on the rule of law.

Lynch said the proposed laws would “distort the process — something I won’t stay silent on.”

Both Deepwater and Carcieri have argued that the small Block Island project was necessary to pursue first in order to pave the way for the larger, utility scale project, but Lynch finds that argument “misleading at best.”

To begin with, says Lynch, Deepwater hasn’t been chosen to build the larger farm; the state would choose a contractor only after an open bid process that has yet to occur. Also, he says the permitting process for federal waters would take at least 7.5 years, and Lynch said he is hearing that the oil spill in the Gulf of Mexico might mean it could be up to 12 years before a large wind farm could begin construction in the ocean off Rhode Island.

Thus he remains suspicious of the governor’s claims that the small Block Island wind farm would automatically lead to a larger utility scale farm and hundreds of jobs. As far as these claims are concerned, Lynch says he has to “at least kick the tires.”

Lynch said he was proud of being accused of being “myopic” for his stance on the Deepwater demonstration project, as some of the plan’s supporters have characterized his position. “If fighting to protect Rhode Island ratepayers from $400 million in increased costs over the next 20 years makes me myopic, I’ll take my near-sightedness any day of the week,” he said.

He said the governor should find a route that doesn’t provide “sticker shock.”

According to Lynch, both the house and senate bills remain in committee and are being modified with amendments after hearing a great deal of comment last week.

He said that if need be, his office is prepared to challenge the constitutionality of the laws. At the very least, he said, the bills must allow for “an avenue to appeal — a fair and thorough review.”

Lynch does not buy the argument made by many that the PUC was not the right venue to weigh the wind project, and that it was not equipped to make the decision.

He said the commission did its job — protected the state’s ratepayers, both residential and commercial.

The costs associated with the small Block Island project — which would only provide one-tenth of one percent of the state’s demand — would be very bad for attracting business, says Lynch.

“Competitive business atmosphere? Deepwater isn’t helping it,” said Lynch. He pointed to one large Rhode Island company that recently relocated to North Carolina because of the high electricity rates here.

He also says that his is not an easy position to take politically. He remains a wind energy advocate and would put “my green record up against any AG in the country.”

He was involved in the contract negotiations between National Grid and Deepwater.

“Let’s clean up the process,” he said.

‘Teed up’

“I don’t pretend to know if this is the right process,” said Deepwater Chief Development Officer Paul Rich in regard to the bills currently in committee. He said that the company, in order to act on contracts already in place, would pursue any “clear avenue” that would keep it on schedule for the Block Island farm.

As far as Lynch’s proposal, Rich doesn’t think it is feasible. “Niether he nor the state have the authority to permit in federal waters,” says Rich. He said the original approach should stay in place: to “do this in a sequence that makes sense; gets us teed up for the utility scale project and provides benefits to the island.”

As far as the larger wind farm, Rich acknowledged last month at a meeting with the island’s Chamber of Commerce that Deepwater would have to bid on the contract; the company did not have a lock on it.

Deepwater placed two large advertisements in the Providence Journal this week, calling upon Rhode Island to embrace its history as an industrial innovator.

Also this week, a passel of groups — including the Rhode Island Tea Party — came out against the wind farm legislation.

On Thursday, a discussion of wind farm issues took place at St. Andrew’s Parish, with Michael Beauregard, a financial expert and Mohegan Trail homeowner, offering information. The Times will provide a complete report next week.