Offshore Wind Wire

By William Morgan

The Rhode Island Public Utilities Commission yesterday rejected a proposed offshore wind power purchase agreement between Deepwater Wind and National Grid as being too expensive and not “commercially reasonable.”

Last December, National Grid agreed to buy power from Deepwater’s planned eight-turbine offshore wind project near Block Island for 24.4 cents per kilowatt/hour.  That price was scheduled to rise 3.5 percent each year but was criticized by some as being unrealistically low.  Several experts pointed out that the cost of the cable between Block Island and the mainland would drive the eventual cost of the power purchase agreement even higher.

The agreement was subject to review and approval by the Public Utilities Commission.  Commissioners have been hearing testimony for several months on the viability of the agreement.

The Providence Business Journal quoted Commissioner Paul Roberti as saying the decision was a reflection of an unwillingness by electric ratepayers to “pay substantially above-market prices.”

The Block Island project, and the power purchase agreement, had the backing of Governor Donald Carcieri and other Rhode Island political leaders.  An expert hired by the state, however, told the commission that the price was inflated by excessive returns for investors.

“Naturally we’re disappointed,” said National Grid President Tom King. “We negotiated in good faith to fulfill the mandate established by the Rhode Island legislature to jump start wind power as a source of clean, renewable energy for the state. We believe in renewable energy and we will continue to consider other renewable projects.”

National Grid is currently engaged in negotiations with Cape Wind for a power purchase agreement on that proposed 130-turbine offshore wind project in Massachusetts.  Massachusetts Energy and Environment Secretary Ian Bowles told both parties that he expects them to settle on a purchase price lower than the Rhode Island project.