Legislative loss could hurt RIPA plans

Gov. Donald L. Carcieri’s failed effort this year to create a R.I. Power Authority to finance the development and purchasing of power from wind, water and solar energy projects in the state has divided local renewable energy companies and environmental groups.
Legislation to create the quasi-public agency got stuck in a House of Representatives committee, effectively killing the initiative until next year.
If created, the power authority would sell bonds to finance renewable energy projects, including Carcieri’s effort to eventually generate 15 percent of Rhode Island’s electricity usage by building a series of wind farms in the state or off its shore.
The agency would have been created by pooling funds already set aside for green energy development, including the Rhode Island Renewable Energy Development Fund, and the sale of some credits that will come to the state as part of its participation in the Regional Greenhouse Gas Initiative.
The wind energy developers Cape Wind and Blue Water Wind joined with the Conservation Law Foundation in supporting creation of the power authority, which they said would spur wind projects in the state by providing a long-term contracts for the projects.
Renewable energy developers need long-term contracts to finance their projects, which require large up-front capital investments and need to earn revenue from that investment over a long time period in order to make the cost of energy produced by the project affordable, said Erich Stephens, Rhode Island project director for Blue Water Wind, an offshore wind energy development firm seeking to do a project in the state.
“A well-structured and well-thought-through energy authority of some sort could be helpful to project developers such as ourselves,” he said.
But Henry DuPont, president of Block Island-based Lorax Energy Systems LLC, a wind project consulting company that worked to install a wind turbine at Portsmouth Abbey, said the governor’s plan would have restricted developers’ ability to get the best price for their power on the free market by forcing them to sell exclusively to the power authority.
“Wind energy projects need to get the highest available price in the market to be economic, and as I read this bill, and the accompanying literature in the press, this was not what was going to be offered,” DuPont said.
At the same time, People’s Power and Light and Environment Rhode Island, both of which originally supported the power authority legislation, withdrew their support because concerns they had about specific language in the bill were not addressed on time, DuPont said.
Regardless of the arguments for or against the power authority, the General Assembly’s failure to enact the legislation has jeopardized the future of two marquee renewable energy projects in the state, said Andrew Dzykewicz, commissioner of the R.I. Office of Energy Resources.
RIWINDS – Carcieri’s proposal to build a $900 million to $1.9 billion wind farm to generate about 150 megawatts of electricity for the state – is on hiatus, Dzykewiczsaid.
The stalled power authority is also jeopardizing the state’s hopes of luring OceanLinx, an Australian wave energy company that is considering a $40 million project which would provide electricity at a stable, low price for 20 years, and is also looking to locate its U.S. headquarters and its U.S. East Coast manufacturing in Rhode Island, Dzykewicz said.
Dzykewicz said he is exploring moving some of the functions of the failed power authority to the R.I. Economic Development Corporation or another state office, including the ability to issue bonds.
But no existing state entity has the ability to purchase and sell power, which Dzykewicz considers a necessary ingredient for spurring large-scale renewable energy investment in the state.
Ultimately, Dzykewicz said, he hopes the General Assembly will enact legislation to create the power authority early in its next session.
“We’re hopeful that we can clarify whatever misunderstandings the House of Representatives had about that legislation last year,” he said.