R.I. wind-power developer, utility may reopen talks

Published Oct. 29, 2009 at 10:35 p.m.

WARWICK, R.I. -- Deepwater Wind and National Grid will have another two weeks to negotiate a power purchase agreement before state regulators decide whether to order arbitration or take other steps to move the stalled talks forward.

During a pre-hearing conference Thursday afternoon in the offices of the state Public Utilities Commission, the offshore wind-power developer and the state's main electricity utility were given a new target date of Nov. 13 to reach an agreement.

Several weeks of talks failed to yield a contract by the initial Oct. 15 deadline set by a renewable-energy law that was enacted in the summer. The law requires the commission to approve or deny an agreement by Dec. 31, but that date may be pushed back as negotiations continue.

Deepwater wants to sell power from a small wind farm proposed off the coast of Block Island to National Grid, but the utility has so far rejected the developer's overtures, maintaining that the price is prohibitively high. The wind farm, which would have up to eight turbines, is being designed as a precursor to a much larger project with 100 machines far off the Rhode Island shore.

The main sticking point between Deepwater and National Grid has been the proposed price of the energy from the Block Island wind farm. National Grid argues that, at more than three times the cost of power from conventional sources, the electricity would be commercially unreasonable. The utility also contends that Deepwater's proposed pricing structure would be subject to too many variables.

In a letter last week, the utility asked the developer to commit to a fixed price before talks could resume.

"I think we can get this done in a short period of time if we can get over the pricing hurdle," said National Grid lawyer Ronald T. Gerwatowski at the commission meeting
Thursday.

Deepwater chief executive officer William M. Moore said his company is preparing a proposal in writing with a fixed price.

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