Apr 04 - Providence Journal

Wind farm developers, show us your plans.

That's the message Governor Carcieri sent yesterday to private developers who may be interested in building a massive offshore wind farm that would generate at least 15 percent of the electricity consumed throughout Rhode Island -- about 1.3 million megawatts of power a year.

At a State House news conference yesterday afternoon, Carcieri announced that the state has begun a formal request for proposals process, in which it seeks a partner in the private sector who would construct, finance and operate the wind farm. The project is expected to be about the same size and scope of the proposed Cape Wind project in Massachusetts and cost perhaps $1.25 billion, said Andrew Dzykewicz, the governor's chief energy adviser.

The state would not play a role in financing the project, but would "use its best efforts" to expedite the permitting process and assure a long-term contract for energy produced by the facility.

The governor said the "preferred site" is off the south and western shores of Block Island, but others may be considered. He said he wants proposals to include providing power to Block Island so that the 1,000 residents there can see some relief in electricity rates. They are currently paying about 40 cents per kilowatt-hour, more than four times the rate paid by mainland residents.

The deadline for proposals is May 16. The governor's office said the state will choose the winning proposal based on the total cost to Rhode Island ratepayers, the qualifications and experience of the developer, and the number of jobs and amount of tax revenue the project would create.

The governor's choice to pursue the Block Island site came after a group of stakeholders, chosen by the governor's office, evaluated 11 potential sites, 10 of which were offshore. The group did not come to a consensus as to which site would be best, concluding that more information would be needed.

The 11 sites they studied were identified as most feasible by a consultant hired by the state, Applied Technology & Management, a coastal, environmental, marine and water resources engineering firm headquartered in Gainesville, Fla.

The report cost about $380,000 and the state paid for it with money from a monthly surcharge collected from utility customers, as well as a $150,000 grant from Florida Power and Light, a major owner and operator of wind farms.

That report identified two adjacent locations, off Block Island, as being a site that could produce the cheapest electricity. One is a 13.1-square-mile site just south of the island in Rhode Island waters, and the other is a 13-square-mile site southwest of the island, in federal waters.

Wind projects in federal waters would have to go through a federal permitting process, while those in state waters would need only state approval. The sites could each contain 56 wind turbines and could generate a total of 220 megawatts of electricity -- enough to power 220,000 homes, the study said. That's about 1 1/2 times the power needed to reach the 15-percent goal.

The study, published last year, estimated that the cost to generate electricity from these two sites, averaged out over 20 years, would be about $96 per megawatt-hour in today's dollars. Under a conservative forecast of energy prices, that would be at or slightly above the market price, according to the study. Under a forecast of higher energy prices, the cost is well below a projected market price of $140 per megawatt-hour. The consultant estimated the total development costs of the Block Island sites to be about $1.9 billion.

At the State House, a wind farm developer and representatives from environmental groups who attended the news conference reacted favorably to the governor's announcement.

"This affords developers a road map," said Bill Fischer, a spokesman for Allco Renewable Energy, the New York energy firm that has expressed interest in building a wind farm off the Rhode Island coast.

"They've identified one of the areas we have the most interest in," he said. "We are going to respond with a serious proposal."

He said the company is particularly pleased by Carcieri's announcement that the state has initiated a zoning process, known as a Special Area Management Plan, to establish exactly where offshore energy projects would be permissible.

"It's huge news," Fischer said. "From a permitting perspective, this shaves time off the back end," allowing the process to move faster, Fischer said.

"We support offshore wind that is sited properly," said John Torgan, a spokesman for the environmental advocacy group Save The Bay. The governor's announcement was a "positive step moving forward," he said. But he said there were contradictory messages coming from the state. On one hand, the state will undertake a process in which it determines which areas are permissible to have offshore wind turbines in state waters. But on the other hand, the governor already has a preferred site -- off of Block Island. What happens, Torgan said, if the state zoning process determines, for some reason, that the Block Island site is not suitable for a wind farm development?

The Conservation Law Foundation "enthusiastically supports offshore wind," said Jerry Elmer, an attorney for the environmental organization. "We commend the governor's interest."

"To the extent that it does speed up wind getting developed, it's a good thing," said Matt Auten, a spokesman for Environment Rhode Island. "The fact that the governor is very committed to wind is a good thing."

He noted that Rhode Island is assuming a big role in getting the project developed by putting itself in the position of choosing the developer and setting conditions that the project should meet.

He said many questions remain, such as whether a developer who wins the bidding process will be given the exclusive right to build on a particular site. Also, there's the question of whether developers would be able to find financial backing for the project without a firm commitment from dominant electricity utility National Grid, or perhaps a state power authority, to buy the power produced by the wind farm.

(There is legislation pending at the State House that would establish a state power authority that would have the ability to enter into long-term contracts to buy electricity. Another pending bill requires National Grid to buy a certain percentage of renewable energy, although not necessarily from a Rhode Island company.)

"We hope it does work to accelerate the process," Auten said. "But it's still an open question as to whether it will do that, or create another layer of complications that need to be worked out before something happens."

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