The January 3 report said that “the ISO and its consultants … have determined that it is unlikely that the project will achieve Commercial Operation” by June 1, 2015.

The company disagreed with the ISO New England assessment.

“We think it is very likely we’ll be online by June 2015, either in whole or in part,” said Cape Wind Vice President Dennis Duffy.

Atlantic City Project Aims For 2013 Commissioning

Fishermen’s Energy vice president and senior counsel Paul Gallagher said yesterday that his company’s Atlantic City offshore wind project is almost ready to begin construction, the Press of Atlantic City reported today.

Construction is waiting on a decision in March from the New Jersey Board of Public Utilities on the sale of the project’s electricity.

“We have arranged our financing, selected our turbines and lined up our contractors … We are, in what Obamaspeak refers to, as ‘shovel ready,’” Gallagher said. The decision in March “will allow us to put steel in the water next summer (2013), with turbines installed in August and power being generated by Labor Day 2013.”

Maryland Rallies For Offshore Wind

Over 100 protesters rallied at the Maryland statehouse this week to urge state lawmakers to support Gov. Martin O’Malley’s offshore wind plan, the Huffington Post reported.

In a major victory for Cape Wind supporters, the Massachusetts Supreme Judicial Court today issued a decision in which it upheld the long term power purchase agreement (PPA) between Cape Wind and National Grid. In its decision, the Court sided with the Massachusetts Department of Public Utilities (DPU) in finding that the Cape Wind project offered “unique benefits” and that the PPA was in the “public interest”.

“Our review of the record indicates that there was clearly sufficient evidence on which the department could base its conclusion that the special benefits of (the PPA) exceeded those of other renewable energy resources, and we uphold the department’s conclusion that approval of the contract was in the public interest,” Associate Justice Margot Botsford stated in the SJC’s opinion.

In November of 2010, the DPU approved the 15-year PPA, saying the project’s unique benefit to the public interest outweighed its costs. That ruling was then challenged in court by trade groups Associated Industries of Massachusetts and New England Power Generators Association, along with opposition group Alliance to Protect Nantucket Sound and energy company TransCanada. The SJC’s decision today will end those challenges, and may clear the way for Cape Wind to find a buyer for the other half of its electricity generation.

“This decision provides a big boost for creating up to 1,000 jobs and providing Massachusetts with cleaner air, greater energy independence and a leadership position in offshore wind power,” said Jim Gordon, President of Cape Wind.

CAPE WIND ADVOCATE CLOSES ITS DOORS

Clean Power Now, a Cape Cod non-profit supportive of Cape Wind and other renewable energy projects, has announced that it is halting its efforts. Executive Director Barbara Hill announced the group’s plan in an email Thursday morning citing “challenges” facing non-profits and public and federal support for Cape Wind. “This decision is bittersweet, but both the governing board and the staff feel that our core mission has been accomplished through our work as citizen advocates for America’s first fully permitted offshore wind farm – Cape Wind,” Hill wrote in her email. “Today, a strong majority supports the Cape Wind project, and the project has cleared all local, state and federal reviews, with help from Clean Power Now at each step along the way.”

UPDATE

Mark Rodgers, Communications Director for Cape Wind, recently issued a statement on the closing of Clean Power Now:

“Volunteers, Staff, and Directors of Clean Power Now should be very proud of their important work and accomplishments in ultimately helping Cape Wind become a reality.  They mobilized the voices of the many people of the Cape and Islands who support Cape Wind and they were there in force when they were most needed to demonstrate public support and to help counter misinformation being put out by project opponents.  I think after Secretary Salazar approved Cape Wind and granted us a lease last year that many of their members rightly felt a sense of ‘mission accomplished’ but that also made it harder for their organization to continue to move forward with the same energy as they had in the past. You also see evidence of the challenge in keeping up that energy on the other side as the Alliance to Protect Nantucket Sound recently filed their 2010 financials which show they ended that year nearly 1 ½ million dollars in debt, with contributions not coming close to keeping up with their growing expenses.  As for Cape Wind, we are resolute to continue to move forward to construct and operate America’s first utility scale offshore wind farm that will deliver important economic and environmental benefits to the region and we are grateful to the hard work of the thousands of members of Clean Power Now in having helped make that happen.”

Last week, when the U.S. Court of Appeals for the District of Columbia Circuit overturned a ruling that Cape Wind’s turbines would pose no hazard to aviation, many assumed that the decision would be the latest setback to the project.

The Federal Aviation Administration decision that was overturned had only a 24-month shelf life, which is why Cape Wind has already received three of these “No Hazard” determinations over the course of the project.  In fact, the one that the Appeals Court vacated last week was set to expire in 90 days, at which time Cape Wind would have had to go back to the FAA so they could review the file again and write a new Determination.

As reported by the Offshore Wind Wire, the proposed Cape Wind offshore wind project hit a legal snag last week.  The U.S. Court of Appeals for the District of Columbia Circuit issued an order overturning a finding by the Federal Aviation Administration (FAA) that the Cape Wind project’s wind turbines would pose no hazard to aviation.

While this ruling may be a setback for the project, it reveals the complex interplay between federal agencies in permitting offshore wind in the U.S.

Federal regulation of offshore wind projects spans a broad range of activities, from site leasing on the outer continental shelf to marine mammal protection and fisheries to impacts on historic sites.  These regulatory functions are carried out by an “alphabet soup” of administrative agencies from the universe of federal bureaucracy.  FAA is charged with maintaining the safety of air navigation, so the Department of Interior consults FAA before granting a project developer a site lease.

If FAA decides that constructing an offshore wind tower would result in either an “obstruction of the navigable airspace” or “interference with air navigation facilities” like radar systems, FAA has the authority to study the proposed project in more detail and recommend strategies to mitigate the project’s impacts.  On their own, FAA’s recommendations are technically advisory, but the Interior Department can issue site leases contingent upon compliance with any FAA mitigation measures.  This gives FAA’s findings increased importance.

In Cape Wind’s case, after the developer notified FAA of the project, FAA initially issued a Notice of Presumed Hazard, requested public comment, and performed aeronautical studies. FAA analyzed the project for 8 years, ultimately concluding that Cape Wind’s 130 turbines “would have no substantial adverse effect on the safe and efficient utilization of the navigable airspace by aircraft or on the operation of air navigation facilities.”  FAA issued 130 identical Determinations of No Hazard for the project, one for each proposed turbine.

In the meantime, the Department of Interior granted Cape Wind a site lease, contingent on compliance with aviation impact mitigation requirements in the lease as well as any FAA recommendations; once the FAA found no hazard, no such recommendations applied beyond the mitigation measures required in the lease itself.

The Cape Cod town of Barnstable, Massachusetts and the Alliance to Protect Nantucket Sound challenged FAA’s No Hazard determinations by filing a petition for review by the D.C. Circuit Court of Appeals.  Petitioners argued that FAA had violated its governing statute, misread its own regulations, and failed to calculate the project’s safety impacts on aviation.

The D.C. Circuit agreed with the petitioners, finding that “FAA did misread its regulations, leaving the challenged determinations inadequately justified.”  The court noted that the record contained evidence of safety risks from the project, such as avoiding the towers in foggy weather and increased traffic density if planes must divert around the project’s airspace.  By contrast, the court found that the record did not contain sufficient countervailing evidence:

While of course the wind farm may be one of those projects with such overwhelming policy benefits (and political support) as to trump all other considerations, even as they relate to safety, the record expresses no such proposition.

The court also found that while the Department of Interior technically could have ignored an FAA determination of hazard, it was likely that the “Interior Department would rethink the project if faced with an FAA determination that the project posed an unmitigable hazard.”

The court found that FAA improperly applied its own handbook in evaluating whether the project would have an “adverse aeronautical effect.”  In the D.C. Circuit’s view, FAA interpreted its handbook too narrowly, and “catapulted over the real issues and the analytical work required by its handbook.”  As a result,

FAA may ultimately find the risk of these dangers to be modest, but we cannot meaningfully review any such prediction because the FAA cut the process short in reliance on a misreading of its handbook and thus, as far as we can tell, never calculated the risks in the first place.

The court noted that it could not tell whether FAA will find the project to be a hazard when it applies the handbook guidelines correctly, but that it would hold FAA to the “standard requirement of reasoned decision-making, i.e. to require the FAA to address the issues and explain its conclusion.”  As a result, the court vacated FAA’s No Hazard determinations, sending the question back to FAA for further analysis and a renewed determination process.

FAA will now reconsider whether the Cape Wind project would pose any adverse effects on air navigation.  The D.C. Circuit did not rule that FAA reached the wrong conclusion in finding the project would pose no hazard, but rather that FAA did not properly document (and it appears properly consider) how it reached that conclusion.

FAA now has guidance from the court as to how to conduct this determination.  FAA’s new look at the project could result in the agency reaching a different conclusion, but could equally well result in a stronger order affirming its previous finding the Cape Wind project would pose no hazard to aviation.  Either way, Cape Wind’s signed lease with the Department of Interior remains in effect, yet the D.C. Circuit’s ruling reveals the complexity of navigating the multiple layers of federal regulation of offshore wind projects.

Todd J. Griset practices energy law with Preti Flaherty Beliveau & Pachios in Maine. He also writes a blog on offshore wind, renewable energy and policy issues.

Welcome to the November edition, where we ask our experts which state will host the country’s first offshore wind turbines. And oh my, how the playing field has changed since we last checked in.

After holding the top spot for the first four rankings — and really, for the past decade — Massachusetts is no longer the favorite to build the first US offshore wind farm. Thanks to strong political backing, a project in state waters and an apparent absence of local opposition, New Jersey has taken the lead. Fishermen’s Energy has an outside chance to begin construction before the end of this calendar year.

Rhode Island also surged in the vote totals to take second place. Deepwater Wind cleared a huge hurdle when the state’s Supreme Court rejected a challenge to the company’s power purchase agreement with National Grid. Deepwater is now pushing forward to secure the remaining permits and plans to begin construction of its Block Island offshore wind farm in 2013 or 2014.

Cape Wind, meanwhile, suffered a potential setback last week when a federal court vacated its FAA “no hazard” ruling. That challenge, difficulty selling the project’s remaining power and the continued opposition of William Koch’s Alliance to Protect Nantucket Sound caused Massachusetts to slide all the way to the third slot in the rankings.

1) New Jersey: “I don’t like to say we’re going to be first, but we have a good shot,’’ said Rhonda Jackson of Fishermen’s Energy, discussing the Atlantic City project.

2) Rhode Island: Deepwater Wind announced last month that they are buying Siemens’ 6 megawatt turbines for their Block Island project.

3) Massachusetts: Cape Wind continues to face well-funded opposition and must obtain another “no hazard” determination from the FAA. But don’t forget, this is the only project that has a signed federal lease.

4) Texas: The Lone Star State has built in advantages, but we’ve been saying that for two years now.

5) Maryland: In his opening address to AWEA’s annual offshore wind conference last month, Gov. Martin O’Malley promised to push his offshore wind plan.

According to the Associated Press report, the court “vacated” the FAA decision and ordered a new review.

“The FAA did misread its regulations, leaving the challenged determinations inadequately justified,” the ruling read.

Cape Wind spokesman Mark Rodgers said the ruling would not be an obstacle to the project’s development.

“The FAA has reviewed Cape Wind for eight years and repeatedly determined that Cape Wind did not pose a hazard to air navigation. The essence of today’s court ruling is that the FAA needs to better explain its Determination of No Hazard,” Rodgers said in a press release. “We are confident that after the FAA does this, that their decision will stand and we do not foresee any impact on the project’s schedule in moving forward.  Really, today’s court decision doesn’t change things very much because our existing Determination of No Hazard (the 3rd we have received since we started with this project) was set to expire in just 90 days and we were going to have to re-apply at that time anyway, this lets us begin that process sooner.”

The Alliance to Protect Nantucket Sound — a group funded by the oil and gas tycoon Koch brothers — exulted in the decision, according to the AP.

“It’s a key step toward Cape Wind’s ultimate failure,” said the organization’s director, Audra Parker.

The Alliance has shown a willingness to profess deep concern over any issue that could potentially derail the offshore wind project. One of the brothers, William Koch, owns a beachside estate that would look out at the Cape Wind project.

Siemens Chief technology officer Henrik Stiesdal called the turbine — currently being tested in Denmark — the “smartest and most beautiful machine.”

“Whenever you bring in new technology, you will have surprises, but the number of surprises we had with the 6MW has been hugely less than for the 3MW, even though the 6MW is a bigger machine,” he says. “The fact that elements of the generator are the same as for the 3MW but just bigger has meant a whole lot.”

Cape Wind Delays Cause Port Construction Delays

Delayed construction on the Cape Wind project has also delayed construction on a planned offshore wind port facility in New Bedford, MA, the Boston Herald reported yesterday.

“As the Cape Wind project has taken longer than anyone expected, it’s delayed the urgency of getting the terminal ready,” New Bedford Mayor Scott Lang said. “Every day that goes by that we can’t put together the infrastructure … is a day we’re literally delaying getting people back to work.”

Lang said that he now expects construction to begin on the port facility in February or March of 2012. Cape Wind has been stalled by inconsistent federal incentives, difficulty finding a buyer to take all the electricity produced by the project and opposition from wealthy coastal landowners.

The project, situated in state waters, could qualify for an expiring federal tax incentive if construction begins before December 31. According to the Times report, the project is slated to cost between $200 and $250 million.

“I don’t like to say we’re going to be first, but we have a good shot,’’ said Rhonda Jackson, director of project development at Fishermen’s Energy.

Utilities Reject Renewable Energy Merger Requirement

Two utilities seeking a merger have told Massachusetts regulators that requiring a renewable energy purchase — including one from offshore wind — would be unconstitutional, the Associated Press reported yesterday.

Massachusetts officials have been pressuring NStar and Northeast Utilities to buy electricity from Cape Wind as a prerequisite to their proposed merger.

“The Department has no authority under (state law), or any other statutory provision to impose a requirement to enter into a long-term contract for renewable power,” the utilities wrote in a filing to the Department of Public Utilities, which reviews the merger.

Seemingly leaving themselves room to maneuver, the companies also wrote that the issue “would not exist if NSTAR Electric were to unilaterally decide to enter into a contract with Cape Wind.”

Dennis Duffy, vice president of Cape Wind Associates, made the request last week in a letter filed to the state Department of Public Utilities. Other organizations, including the state Department of Energy Resources and the nonprofit Conservation Law Foundation, have requested that the merger be approved only if the merged entity agrees to buy a large amount of wind generated electricity, according to the report. NStar spokeswoman Caroline Allen told the Globe that the company did not want the requirement put in place.

“We would hope that any decision on Cape Wind would not affect any decision on our merger,’’ Allen said.

GE Planning 15 MW Offshore Wind Turbine

GE Energy is planning a 15 megawatt offshore wind turbine, Recharge News reported today.

The project is being developed under a $3m cost-share arrangement with the Department of Energy, according to the report.

“To do this, you do need transformational technology — you can’t just scale up from existing industry products — and that is the power that superconducting technology offers,” said Keith Longtin, wind technology platform leader at GE Global Research.