Offshore Wind Blowing into the Ocean State
Lefteris Pavlides was feeling a little under the weather when I reached him Thursday morning. The professor of architecture at Roger Williams University and president of the Rhode Island Wind Alliance was nursing a cold and had not yet caught up with the day's news, when I told him that the state's predominant utility and an offshore wind developer had finally reached an agreement on pricing. "That's fantastic," he exulted. After years of effort to bring wind energy to Rhode Island, the hurdle of power prices for utility scale projects may have been crossed.
Late Wednesday the utility, National Grid, and the project developer, New Jersey-based Deepwater Wind, said they had hammered out a power purchase agreement. The agreement brought this phase of the process to closer to completion, following months of contentious negotiations, prodded along by Governor Donald Carcieri. The agreement was filed with state regulators Wednesday, who have until January 31 to approve it. As recently as two weeks ago, negotiations between the developer and the utility broke down for the second time.
Deepwater is starting small, with up to eight turbines to be erected 3 miles off Block Island. The PPA is for 20 years. Deepwater has plans for up to 106 turbines for a $1.3 billion project about 15 miles from the mainland that would be covered by a separate PPA. Power comes at a steep price compared to mainland rates of about 9 cents per kilowatt-hour. The PPA anticipates the turbines would be spinning in 2013, with Deepwater to be paid 24.4 cents per kilowatt-hour, with a yearly 3.5 percent increase thereafter. Legislation passed earlier this year boosted the projects as it allows National Grid to collect a profit of 2.75 percent of its annual contract with Deepwater. Statewide, ratepayers are expected to see their power bills increase by about $16 a year, with Deepwater promising to absorb the cost of the transmission connections.
These prices would be a relative bargain for Block Island residents and the owners of second homes. The island's electric system is not tied into the mainland and residents now rely on a small diesel-fired power plant. Prices spiked to 68 cents per kWh in the summer of 2008 and have returned to a more "normal" 45 cents lately. Aside from price, homeowners and registered voters have come out overwhelmingly in favor of the project. Pavlides and Annie Gjelsvik, assistant professor of community health at Brown University, co-led a poll of island residents and second home owners this year. Those who lived on the island showed 84 percent in favor; nonresidents still indicated 71 percent support.
Pavlides, who also was instrumental a few years ago in having a single turbine erected at a private school not far from his university campus, said the numbers supported the efforts he and others have made for promoting wind energy. As I apologized for disturbing his quiet morning, Pavlides would have none of it. "Ah, but you've given me energy today," Pavlides said. The same might be said for the offshore wind development in the Northeast.
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