Offshore Wind Farm in Rhode Island

Governor Donald L. Carcieri praised the Public Utilities Commission (PUC) for approval of the power purchase agreement (PPA) between National Grid and Deepwater Wind for the development of the Block Island wind power project.

The approval by the PUC of the power-purchase agreement with utility company National Grid represents a crucial next step toward development of the Block Island wind energy project, which remains on track to become America’s first offshore wind project.

“I am pleased by the PUC’s approval of the PPA between National Grid and Deepwater, and thank the commissioners for their robust and comprehensive review of the agreement,” said Governor Donald L. Carcieri. “This approval marks a critical step in our bid to develop the nations’ first off shore wind turbines project. More so, this project will jump start a new industry in Rhode Island.”

The Block Island wind energy project will include up to eight wind turbines and will provide clean, stable power at mainland rates for Block Island residents, who now pay some of the nation’s highest electric prices. The wind farm will provide approximately one percent of Rhode Island’s energy needs.

Deepwater Wind must still secure PUC approval of a transmission line connecting the Block Island demonstration project with the Island and with mainland Rhode Island.

In a joint statement by President of the Senate M. Teresa Paiva Weed and House Speaker Gordon D. Fox, the two praised the approval, “Today’s approval by the PUC allows Rhode Island to seize upon a major opportunity to bring jobs to the state and develop a new industry as a wind manufacturing and support hub for the entire eastern seaboard. With the expertise that exists through the CRMC’s Special Area Management Plan, an ideally situated deepwater port at Quonset, and our prime location rich in off-shore wind resources, Rhode Island is exceptionally well-positioned to become a national leader in wind energy development.”

Governor Carcieri cited the economic development and the economic security benefits of wind power. “From an economic development perspective, we will capture significant economic development benefits including the creation of hundreds of jobs at Quonset Point. In addition, if Rhode Island is at the nexus of an offshore wind industry in the Northeast, we expect to attract ancillary turbine, blade, and component companies to Rhode Island to support this new industry,” said Governor Carcieri.

“From an economic and national security perspective, we cannot continue to be held hostage to imported sources of carbon-based fuels. If we do not aggressively seek alternative sources of energy, our economic and national security is at risk. This important initiative will accelerate our efforts to be the first state in the nation to take our energy needs into our own hands, through the development of clean, sustainable renewable energy off our shores.”

“More aggressive development of generation resources, with corresponding transmission infrastructure investment, will enable New England to become more self reliant for its own energy needs. Developing these new renewable resources will help to diversify our region’s energy mix and has the potential to put downward pressure on the marginal prices for energy within the New England electricity market,” continued Carcieri.

The PPA before the PUC was the result of legislation passed this year by the General Assembly, and signed by Governor Carcieri, that clarified the intent of the original long-term contracting legislation.

The new law required that a new PPA between National Grid and Deepwater Wind be filed with the PUC with a decision rendered within 45 days and include public comment. In addition, the legislation required the RI Economic Development Corporation (RI EDC) and the RI Department of Environmental Management to offer testimony before the PUC on the economic development and environmental benefits of the project. According to RI EDC’s independent consultant, the direct economic benefit to Rhode Island attributed to the Block Island project are more than $100 million, and close to $900 million for the larger project in federal waters, with the economic activity centered at Quonset Business Park.

As prescribed by statute, the new PPA contains an “open book” approach that requires Deepwater Wind to disclose and the Division of Public Utilities to verify, the construction and development costs of the project. The open book assures that ratepayers will benefit from any capital cost savings achieved during the development and construction of the demonstration project in the form of a lower power price. The legislation also caps the price of the power to that in the PPA previously filed with the PUC. However, that price shall be reduced commensurate with any savings achieved in the development of the project.