BURLINGTON, Vt. – Vermont’s two largest electric utilities are examining whether to sign long-term contracts to buy power from an offshore wind farm that Delaware-based Bluewater Wind hopes to build in Rhode Island Sound.
The two utilities, Central Vermont Public Service and Green Mountain Power, are seeking potential replacement sources in case the Vermont legislature chooses not to renew the license for the state’s nuclear power plant, Vermont Yankee, next year.
“We’re very interested in in-state wind as well as out-of-state wind, and obviously we have to look at the cost of all of those,” Dottie Schnure, a spokeswoman for Green Mountain Power, told WCAX-TV in Vermont.
Erich Stephens, Bluewater’s project director in Rhode Island, told Providence Business News his company is proposing to build a 450-megawatt offshore wind farm in federal waters between Martha’s Vineyard and Block Island. It would generate approximately 1.3 million megawatt-hours of electricity per year, he said.
The proposed site of the wind farm is about 11 miles from the nearest shoreline and 20.4 miles from Rhode Island, said Stephens, former executive director of the green-energy group People’s Power & Light.
Renewable energy companies say long-term power purchase contracts are vital to getting their projects off the ground because they guarantee a steady source of revenue for the developments once they are built, which attracts investors.
Bluewater’s proposal could put the company in conflict with the Carcieri administration, which last September passed over Bluewater and instead picked Hoboken, N.J.-based Deepwater Wind as the state’s preferred developer of a utility-scale wind farm off the Rhode Island coast.
At the time, Andrew Dzykewicz, the governor’s chief energy adviser and the director of the R.I. Office of Energy Resources, told PBN the administration would move to block Bluewater from building a wind farm off Rhode Island, saying “we would take an adversarial stand [against] them with the [federal] regulatory agencies.”
Deepwater is proposing two projects: a 20-megawatt wind farm, consisting of five to eight turbines, to be located three miles off Block Island and put into operation by June 2012; and a 100-turbine, 385-megawatt wind farm in federal waters that will power up to 120,000 homes. Federal documents say construction on Deepwater’s larger wind farm would start in 2015.
But Stephens downplayed any conflict with state officials, saying he believes the two companies are studying different sites for their farms. “There’s room for both [projects],” he said. “It’s a big ocean.”
If there is a conflict, Stephens added, draft regulations by the U.S. Minerals Management Service – the federal agency Congress has tasked with permitting offshore wind projects – call for a competitive bidding process to determine who gets access to the site.
The Obama administration has signaled that those long-delayed regulations should be released in the coming months. Stephens said all offshore projects – except for those that were proposed years ago, including the Cape Wind project in Nantucket Sound – are on hold until the final rules are in place.
Last year Bluewater signed a long-term electricity-purchasing contract with a utility in Delaware, and last fall both Bluewater and Deepwater were among the companies chosen by the State of New Jersey to study the viability of a wind farm there.
“What it shows is that we’re really turning over every stone to find these long-term contracts, because they are sort of central to the whole undertaking,” Stephens said.
Bluewater has also felt the impact of the global economic crisis. Its parent company, the Australian investment bank Babcock & Brown, collapsed last month and was put into voluntary administration. Its subsidiary companies, including Bluewater Wind, will be sold off, Stephens said, adding that he does not expect the breakup of Babcock & Brown to affect Bluewater’s various projects.
Wind power is not the only renewable energy source that Central Vermont Public Service, that state’s largest utility, is considering. The company also is planning to build a solar energy project in Rutland, Vt.
Correction: The original version of this story said the smaller wind farm that Deepwater Wind plans to build near Block Island is expected to have between six and eight wind turbines. The company says the minimum number of turbines it is considering putting up is five.
