William Felkner: The Treacherous Waters of Deepwater Wind (Part Two of Two)
Add it all up and that rounds [down] to the paltry sum of $500 million or half a billion dollars above and beyond what we could buy renewable energy for from the market (are we talking about real money yet?).
The Deepwater sales pitch contains ephemeral “system benefits” and glowing statements about how we can become the leader in the renewable industry – ignoring the facts that we would have to overcome our crippling tax structure, crumbling infrastructure, and our well-deserved reputation for corruption, in order to leapfrog ahead of neighboring states that already have wind farms in operation or production.
Governors from California to Delaware, from Michigan to Ohio, and even nearby Massachusetts and Maine, are all convinced that they are the next Silicon Valley of Wind Energy.
And if the Quonset facility is so singularly appropriate for a turbine manufacturer, then surely purchasing eight turbines isn’t going to be the make or break for such a decision – don’t take my word for it, listen to Deepwater (per PUC report):
Deepwater admitted that it “does not expect suppliers of principal components to the Block Island Wind Farm to establish manufacturing facilities in Rhode Island or to hire from the RI labor force simply to supply the Block Island Wind Farm Project.”
But outside of sworn testimony, Deepwater has a different sales pitch.
Deepwater tells us to ignore the high price because it compares favorably to the Cape Wind project, in Massachusetts. But Cape Wind is also a state imposed monopoly, priced at more than twice the market rate, and RI is still 1/3 more expensive.
Then they tell us to ignore the high price because the “fixed” price of Deepwater electricity may well be lower than the price from foreign fossil-fuel sources at some point during the contract. But two independent estimates were presented to the PUC which showed energy prices rising approximately 50% over the next 20 years. For the Deepwater price to look competitive, we would have to see a 410% increase.
And Deepwater tells us we can become the “Saudi Arabia of Wind” which would provide the State with a product to export. But who would buy energy from Deepwater when they can get the same energy from someone already on the grid for half to one third the price?
Then they tell us not to worry because it will only be about $1.50 on your electric bill. Putting aside the “new math” used to create that figure, common sense tells us that you can’t pay a $390,000,000 bill with $1.50 per month installments. Excluded from this figure is the cost to businesses. National Grid estimates the increased (not total) cost to Rhode Island’s fifteen largest businesses at $2,001,512.
Even the cost to run government will go up considerably because of the Deepwater Project.
First, the Project would increase energy costs for governmental entities. The impact on the State of RI’s aggregate electric costs would be an initial annual increase of $476,630 … municipalities would be $1,008,803, with a strong likelihood of escalation each year thereafter.
No matter how you slice it, Deepwater makes the cost of government and the cost of doing business in Rhode Island more expensive and that is bad for the economy.
Why the urgency in pushing this legislation in the face of a PUC rejection and in the final hours of the legislative session? Because federal loans are on the line and Deepwater stands to make a lot of money – over 28%, according to testimony provided to the PUC. And that amount just isn’t reasonable.
For more information, please visit www.nodeepwater.com.
William Felkner is the President and Founder of the Ocean State Policy Research Institute.