RI Court affirms Deepwater-Grid agreement

A R.I. SUPREME COURT ruling has removed a major obstacle from the development of offshore wind energy in Rhode Island by Deepwater Wind.
Posted 7/1/11

(Updated, July 5, 8:30 a.m.)

PROVIDENCE – The R.I. Supreme Court unanimously turned away the effort by two manufacturers to invalidate the power purchase agreement between National Grid and alternative energy developer Deepwater Wind that had been approved by the R.I. Public Utilities Commission, in a decision released late Friday.

The agreement had been approved by the PUC last August by a 2-to-1 vote, and it followed by five months a rejection of an earlier version of the power purchase agreement, largely done on a determination that the price of the electricity to be generated by a demonstration wind power project off the coast of Block Island was too high.

In the interim, the General Assembly and then-Gov. Donald L. Carcieri had modified the statute that created the framework for the power purchase agreement in such a way that the price – which National Grid has acknowledged will ultimately cost the utility $409 million to $415 million more than power from traditional sources such as natural gas plants – would be viewed only in comparison with other similar projects and not any renewable energy source.

The PUC approval had been challenged originally by Toray Plastics (America) Inc. and Polytop Corp., as well as the Conservation Law Foundation and then-Attorney General Patrick C. Lynch. When he was installed as Attorney General earlier this year, Peter Kilmartin withdrew the office’s challenge, and the Supreme Court subsequently determined that the CLF had no legal standing to bring suit in the matter.

Toray and Polytop had argued that the electricity generated by the offshore wind farm would add millions of dollars to their utility bills and was thus not “commercially reasonable” under the state law.

In the court’s opinion, written by Associate Justice Gilbert V. Indeglia, the justices found that the PUC had correctly interpreted the long-term contract rules and that no matter their opinion about the venture – the ruling said that the court viewed “with trepidation the General Assembly’s unwavering quest to sink this demonstration wind farm into the sediment of Rhode Island’s continental shelf” – they could not “substitute our will for that of a body democratically elected by the citizens of this state.”

Deepwater Wind CEO William M. Moore said “We’re gratified by today’s ruling … We’ll now proceed to the permitting and construction planning phases of the project, working closely over the coming months with state and federal agencies as well as Block Island residents and other stakeholders.”

Mike McElroy, attorney for Toray and Polytop, said this in response to an inquiry from Providence Business News: “We are disappointed with this decision, which approved what we believe was an unreasonable PUC majority decision and will cost Rhode Island electric ratepayers about $400 million. This project will create only 6 permanent jobs, but we believe the huge additional electric costs it will impose, especially on businesses, will significantly discourage growth in Rhode Island's sluggish economy, which is struggling to overcome a deep recession.”

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