Energy task group weighs post-wind farm electricity costs

Mon, 06/28/2010 - 4:00am

6/28/10 — The Electric Utility Task Group received a preliminary timeline of the schedule of hearings by the Public Utility Commission on a new Power Purchase Agreement between Deepwater Wind and National Grid at its meeting last week.

Deepwater liaison Bryan Wilson said that after the new PPA is submitted the PUC would have 45 days to review the case. The first 20 days would include testimony from both the Department of Environmental Management and the Economic Development Corporation.

Given a June 30 filing, the PUC could begin evidentiary hearings on Thursday July 22, leaving a projected decision date of August 11.

Wilson also explained some of the changes in the new law that provided the new definition of “commercially reasonable” that the PUC will be operating under. Electric Utility Task Group Chair Everett Shorey said that the new definition represented a “very different standard.”

“[The new definition] really doesn’t mean commercially reasonable; it means a fair price for an off shore wind farm of that size,” Shorey said. “That is a standard that is a lot easier to meet.”

The task group members also responded to a letter published in the Block Island Times by Town Council member Peter Baute who attempted to calculate what the change in his electricity bill would be if the wind farm were built.

Shorey thought the task group could come up with its own estimate of the electric rate with a wind farm. Before the new bill was passed, calculating the change was impossible because it was not clear what the cable allocation would cost island ratepayers; however, the new bill lays out a formula that will be used in determining the allocation, which is roughly 1.8 times what a mainland customer would pay.

“We all agree [electricity bills] will go down,” task group member Bill Penn said. “The question now is by how much?”

Another aspect of the cost would be upgrading the distribution system; however, this cost will be added whether the wind farm is built or not, Shorey explained. The task group was not sure where the upgrade, which would require approval by the PUC, stood.

Town Manager Nancy Dodge said that the PUC would likely reopen an old docket on the distribution system later this year to consider allowing the Block Island Power Company to increase its rates to cover the cost of the upgrade.

On-shore wind

The task group expects to hear whether the island will receive grant money for a wind feasibility study later this month. The study will look at several locations around the island and determine how effective a wind turbine would be.

Penn also shared a study with the group done by the New England Wind Energy Education Project, which looked at the effect of commercial wind turbines on adjacent property values. According to task group member Barbara MacMullen the study found “no statistically significant effect on property values.”

The study, which looked at properties in nine states near 24 different wind farms and divided them based on distance to the closest wind turbine, found a small decrease in home values in the group closest to the turbines; however, the decrease was so small it was not clear if it was caused by the turbines or by another factor not accounted for in the study.

MacMullen said that one of the more interesting findings of the study suggested that property values were more effected during the lead up to the installation of a turbine than after the turbine had been erected. This is likely due to uncertainty over how the turbine will impact the area.