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Rhode Island offshore wind project wins key court ruling

Highlights

Deepwater Wind, one of three developers in the Northeast vying to buildthe US' first offshore wind farm, has won a key court ruling for its 28.8-MWproject off the coast of Rhode Island.

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The Rhode Island Supreme Court on Friday rejected arguments from twomanufacturers that National Grid will pay too much for power from the BlockIsland project.

Toray Plastics and Polytop challenged the state Public UtilitiesCommission decision approving the utility's 20-year deal to buy the power atan opening price of 24.4 cents/kWh with a 3.5% annual escalation.

The favorable court decision paves the way for the $250 millionDeepwater Wind project to seek state and federal permits.


Jim Lanard, president of the Offshore Wind Development Coalition, saidthat the other two offshore wind projects closing in on the finish line are Cape Wind's 420-MW project off Cape Cod, Massachusetts, and the Fishermen'sEnergy 24-MW wind farm off of Atlantic City, New Jersey.

All three developers are trying to complete a different set of finalmilestones, according to Lanard.

Deepwater has a buyer for its power and financial backers, but needs tosecure permits. Fishermen's Energy has permits, but needs to secure a revenuestream for its power. Cape Wind, by far the largest project, has a buyer forhalf its power and has its permits, but now needs financing. Cape Wind alsomust ward off litigation from opponents.

"The offshore wind industry has momentum," Lanard said. "We arebeginning to move in the right direction with projects that are gettingcloser to being able to be financed and built."

Deepwater Wind said it plans to begin site preparation in 2012, andhopes to have the Block Island wind farm operating in 2013 or 2014. Theproject must first secure permits from the US Army Corps of Engineers and theRhode Island Coastal Resources Management Council, according to Meaghan Wims,a Deepwater Wind spokeswoman.

In its 75-page decision, the Rhode Island Supreme Court said the PUCacted according to state law when it approved National Grid's power purchase agreement with Deepwater Wind.

"We are disappointed with this ruling which approved what we believe wasan unreasonable PUC majority decision and will cost RI electric ratepayersabout $400 million, said Mike McElroy, Toray Plastics and Polytop's attorney.

"This project will create only six permanent jobs, but we believe thehuge additional electric costs it will impose, especially on businesses, will significantly discourage growth in RI's sluggish economy, which is struggling to overcome a deep recession," he added.

The developer, however, expects the project to inject over $100 millionin economic activity into the state and create about 200 construction jobs.

--Lisa Wood, newsdesk@platts.com