Candidates for governor disagree on Deepwater’s Block Island wind farm deal

There has been no greater promoter of the Block Island wind farm pilot project proposed by Deepwater Wind than outgoing Gov. Donald L. Carcieri.
Yet, the two Republicans running to take the place of their term-limited, fellow GOP member are opposed to the recent agreement between National Grid and Deepwater, while the Democratic and the independent candidates are in favor – though the latter with reservations.
General Treasurer Frank T. Caprio, the endorsed Democratic candidate for governor, seems to have the fewest reservations about the proposal, according to prepared statements he provided Providence Business News. “We need to consider alternative energy projects like Deepwater as opportunities to create a new-green jobs sector in our state [and] reduce dependence on nonrenewable resources, especially foreign oil,” Caprio said.
Lincoln Chafee, former U.S. senator running as an independent, said in a telephone interview he was “very supportive” of Deepwater until Carcieri and the General Assembly virtually forced the R.I. Public Utilities Commission to approve it. When that happened, support from environmental groups such as the Conservation Law Foundation evaporated. “That troubles me,” Chafee said. (On Aug. 20, the Conservation Law Foundation Rhode Island chapter, as well as Toray Plastics (America) and Polytop Corp., appealed to the state Supreme Court the PUC’s approval of a power-purchase agreement between Deepwater Wind and National Grid. Attorney General Patrick C. Lynch has also filed a petition with the court seeking to overturn the PUC’s approval.)
Opposed to the deal are endorsed Republican John Robitaille, who was in favor and then changed his mind when the normal approval process was circumvented, and GOP challenger Victor Moffitt, who has been against it since the beginning. Moffitt is the strongest opponent of the four. “This particular project stinks,” he said in a telephone interview. At issue is the contract between National Grid and New Jersey-based developer Deepwater Wind, approved by the PUC on Aug. 11 in a 2-1 vote, that will govern the sale of electricity from the eight-turbine wind farm that Deepwater intends to construct off Block Island as a pilot project. The 20-year contract calls for Deepwater to sell electricity at 24.4 cents per kilowatt-hour in the first full year of operation in 2013, with the price increasing 3.5 percent each year after that.
In March, the PUC rejected an almost-identical contract because, commissioners said at the time, the price was not “commercially reasonable.” But the General Assembly and Carcieri had a law passed, mandating the commission to take a second look and use new criteria to judge the price.
If the $200 million, eight-turbine demonstration project proves successful, Deepwater intends to build a larger farm of about 100 turbines 15 miles off the mainland, estimated to cost $2.25 billion and generate more than $800 million in direct and indirect economic benefits to the state, according to a consultant the R.I. Economic Development Corporation hired to review it. The same consultant found the smaller wind farm would have a $107 million impact.
Carcieri has said he believes that construction of the pilot project would position Rhode Island to be a regional and national leader in wind power, spark economic development for years to come by creating a new and vibrant industry in the state, and create what the governor said would be “thousands of additional jobs” in the years ahead.
However, whether the pilot project will be built anytime soon, if at all, remains an unanswered question due to the legal challenges.
In papers filed with the court, the Conservation Law Foundation argues the revised law violated the Rhode Island Constitution by favoring one company. The foundation also said the General Assembly “overstepped its bounds” in intervening in case. The state Supreme Court by law must consider any appeal, and attorneys close to the project estimate a final court decision in late winter or early spring. Deepwater hopes to have the small wind farm online by the end of 2012. Like Carcieri, Caprio sees the long-term benefits of Deepwater outweighing any negative aspects. “This is a chance for Rhode Island to be a leader in the country and create a successful industry with an entirely new sector of green jobs,” he said. “I would like to see Deepwater make Rhode Island a national leader in wind power.”
Some manufacturers, including Toray Plastics (America) Inc. and Polytop Corp., oppose the Deepwater deal due to the high cost of the power produced, but Caprio held out the hope that the price could be lowered in the future. “We can be the national leader in offshore wind and, as the project grows into a larger- scale operation, take advantage of the economies of scale to reduce the cost of energy to the consumer,” he told Providence Business News.
If the contract approval is ultimately overturned, Caprio said he as governor would “work hard to bring green jobs and create a renewable energy sector in our state, whether it be in the form of another off-shore wind development, competing for federal grants to convert our schools and government buildings into energy-efficient structures or developing Quonset Point into a hub for green jobs.”
Clarifying his stance, Chafee said he still supports the Deepwater pilot project, but his backing is “a little less strong” due to the way the usual approval process was circumvented and the subsequent loss of environmental groups’ support.
“I want to review the [CLF] position and the course CLF will take,” he said prior to the appeal to the state Supreme Court. For a renewable energy project to be successful, support of conservation groups is essential, he suggested. The opposition of Robitaille, who worked for two years as Carcieri’s communications director, might surprise some because the project is backed by his former boss.
“It doesn’t matter that John used to work for the governor,” said Robitaille spokesman Mike Napolitano. “He also urged the governor to veto the [FY2011] budget.”
Napolitano said Robitaille at first was in favor of the Deepwater proposal because of the jobs it could create. But, when the usual approval process was circumvented, that changed everything.
According to Napolitano, the cost of renewable energy on the open market now is about 10 cents per kilowatt-hour, compared with the 24.4 cents Deepwater projects for the small wind farm. If the court upholds an appeal, Robitaille believes that any similar future proposals must include a lower cost for power, Napolitano said.
Moffitt, a former state representative and House Finance Committee member for six years, flatly called the proposal “anti-business” because of the high energy costs attached to it. Recent reports indicate that wind power can be bought from the Canadian grid for about 11 cents per kilowatt-hour, Moffitt said, making it “much cheaper” for the state to purchase it elsewhere.
He is concerned about Deepwater’s limited track record in the nascent industry. Another point that bothers him is the fact that the developer was named in the legislation because, during his time in the legislature, “it was always taboo to specify a certain company or a certain project” in pending bills, Moffitt said. And, the “last slap in the face,” he said, was circumventing the usual regulatory process.
Moffitt is in favor of creating manufacturing facilities at Quonset or other state locations to manufacture turbines or other alternative energy products because jobs would be created, he said – and that’s the only part of the Deepwater agreement that he can support. •