Last Update: March 18 @ 5:31 PM
energy
Nat Grid still won’t buy from Deepwater
Utility’s PUC filing claims wind farm electricity too expensive


PROVIDENCE – After two months of talks, Deepwater Wind LLC and National Grid are still unable to agree upon a contract for the utility to purchase electricity from the developer’s offshore wind farm.

In a filing made Wednesday afternoon with the R.I. Public Utilities Commission (PUC), National Grid submitted an unsigned power-purchase agreement, saying the two sides remained apart over the issue of price.

National Grid said the cost of electricity from the eight-turbine wind farm planned off the coast of Block Island would be 25.3 cents per kilowatt-hour in 2013, the first full year of operation. The price would rise 3.5 percent each year after that.

“While National Grid had hoped that Deepwater would be able to offer a firm, unconditional price between 20 to 25 cents per kilowatt-hour in 2013, but to this point, they have not done so,” the utility wrote in a letter to the PUC, which holds the power to approve or reject the contract.

National Grid said it held out hope that a loan guarantee for Deepwater Wind from the U.S. Department of Energy under the American Recovery and Reinvestment Act of 2009 could lower borrowing costs and lead to cheaper electricity. The utility also said it did not have time to evaluate what the price would be if the wind farm produces more electricity than anticipated. Still, it called the price too high.

“National Grid believes that there are likely to be other renewable generation projects that will present less expensive renewable generation options for customers that will achieve the same or greater environmental benefits,” the company wrote.

National Grid added that it also felt the price too high, even if the project is meant as a demonstration project and a precursor to Deepwater’s planned larger farm 15 miles off the mainland.

On Friday, National Grid had asked the PUC for an extension until Wednesday to file a proposed contract, saying both sides were still in negotiations. The Friday deadline was itself an extension after the National Grid rejected Deepwater Wind’s proposed contract in October, saying it contained electric prices that were too costly. National Grid insisted the price would be around 30.7 cents a kilowatt-hour, an estimate that Deepwater Wind sharply disputed.

At the time, the PUC faced a Dec. 31 deadline to approve a contract between the two. But during a special General Assembly session earlier this month, lawmakers extended that deadline until the end of January under a law initially passed earlier this year. That law mandated that National Grid purchase some of its electricity from renewable energy sources and specified criteria that favored Deepwater Wind.

Since the law’s passage, the New Jersey-based company has ramped up operations in Rhode Island. The company announced last week that it hired Sandra T. Whitehouse, the wife of U.S. Sen. Sheldon Whitehouse, D-R.I., as an independent permitting consultant. She is a former chairwoman of the R.I. Coastal Resources Management Council and is a senior policy adviser to the Ocean Conservancy and an independent environmental policy adviser to the R.I. House of Representatives.

Deepwater also brought on board Bryan Wilson, a former New Shoreham town councilor, to serve as its liaison to the island’s population. In Providence, the company said Susan M. DeMacedo has joined Deepwater Wind as a full-time office manager.

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