Two plastics companies are among those appealing a recent decision by the Rhode Island Public Utilities Commission to green light the United States' first large-scale offshore wind-energy farm in the Atlantic Ocean.
Toray Plastics America Inc. and Polytop Corp. on Aug. 23 appealed the commission's Aug. 12 approval of a 20-year contract between development firm Deepwater Wind LLC of Hoboken, N.J., and utility company National Grid USA of New York to transmit power from Block Island — about 13 miles south of Rhode Island and 15 miles east of Montauk, N.Y. — to National Grid customers.
The wind farm, a $220 million project that would result in the installation of six to eight European-style large wind turbines near the island, is scheduled to be operational in 2012.
Under the contract, Deepwater Wind would sell electricity to National Grid for 24.4 cents a kilowatt-hour, with annual price increases of 3.5 percent over the life of the agreement. The baseline price could be lower if construction costs fall below the developers' expectations.
Opponents charge that completion of the wind farm, which is estimated by its backers to be able to produce 1.3 million megawatts of electricity annually — about 15 percent of Rhode Island's electricity usage — would increase the state's market-based power transmission rates (the so-called “wire fee”) to a level that would outweigh the benefits of “green” energy for most customers.
Toray and Polytop, New England environmental group Conservation Law Foundation and Rhode Island Attorney General Patrick Lynch have filed petitions with the state Supreme Court seeking to reverse the RIPUC decision.
“As I've repeatedly said, I'm all for green energy,” Lynch said in an Aug. 23 statement. “But in this case, green energy translates into greenbacks for the developers of an anti-competitive project with a limited scope that will force us to buy overpriced electricity for the next 20 years in order to subsidize one company, rather than jobs that are so desperately needed.”
The court has not indicated when it may hear the appeals.
In filings with RIPUC, Toray — a North Kingston, R.I., film extruder owned by Toray Industries Inc. of Tokyo — argues that the Deepwater Wind project would cost it $304,732 in above-market payments in the first year of operation, and $7.3 million over the life of the contract with National Grid.
According to its filings, Toray employs 600 in Rhode Island with a $79 million annual payroll.
Polytop — a closures injection molder in Slatersville, R.I. — said its costs would be $46,000 in the first year and $1.1 million over 20 years. According to its filings, Polytop employs 200 with a $10 million annual payroll.
Toray uses about 160 million kwh of electricity per year, Michael McElroy, a Providence, R.I.-based attorney for both companies, said Aug. 25 by telephone.
Although Toray buys about 100 million kwh of that electricity from an alternative supplier —TransCanada Corp. of Calgary, Alberta — completion of the Block Island wind farm would drive up the wire fee, McElroy said. Toray produces between 50-60 kwh of electricity at its own natural gas cogeneration plant, but it would not be able to ramp up production to offset the higher charges, he added. Polytop uses about 16-17 million kwh of electricity per year, he said.
Both companies have projects in place to reduce their energy use and practice recycling, McElroy said. He would not comment further on the appeals.
“I certainly don't want to say anything to offend the Rhode Island Supreme Court,” he said.
Through a spokeswoman, Deepwater Wind declined to comment. But CEO William Moore told the Providence Journal April 24 that his firm would “vigorously” defend the RIPUC decision.
In filings with RIPUC, Deepwater Wind said it has spent $9 million already on the Block Island project. The firm plans a second wind farm in the Rhode Island Sound northeast of Block Island, 15-20 miles off the coastline near Narragansett Bay, and a third about 20 miles east of Avalon, N.J.
Deepwater Wind's major investors are First Wind Holdings Inc. of Boston, a developer of U.S. onshore wind projects; D.E. Shaw & Co. of New York, a capital investment firm; and Ospraie Management LLC, a New York-based asset management firm.
National Grid USA, a subsidiary of London-based National Grid plc, delivers electricity to about 3.3 million customers in Rhode Island, Massachusetts, New Hampshire and New York.