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RI PUC Sinks Deepwater Wind Project April 2, 2010

Posted by truthspew in Uncategorized.
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I’ve previously written about the ridiculous rates that Deepwater Wind wanted to charge. Well, the Rhode Island Public Utilities Commission voted down the proposal between Deepwater Wind and National Grid. It was a no-brainer.

The key paragraph from the linked article:

The three-member commission voted unanimously against the power-purchase agreement between developer Deepwater Wind and National Grid during a public meeting Tuesday morning in its Warwick offices. In separate statements during the hour-long hearing that capped nearly four months of deliberations, the commissioners all spoke out against the proposed contract, saying that the price of power agreed to by the two sides was too high and that the overall deal — according to the standard set by statute — was not “commercially reasonable.”

The initial offering rate would be 24.4 cents per kWh with a 3.5% per year increase for the next 20 years yielding a price just short of 50 cents per kWh.

Interestingly the Providence Journal posted a story on the town of Portsmouth’s wind turbine. Some interesting stats:

“PORTSMOUTH — The wind turbine at Portsmouth High School earned $281,219 for the town in its first full year of operation — 14 percent higher than projected.

Most of that amount is reflected in a credit on electric bills for schools and town buildings, although a recently enacted change in the law means that the town will instead get checks back every month from National Grid.

The 1.5-megawatt turbine, towering 336 feet into the air, marked its first anniversary on March 18.

According to figures compiled by the town, the turbine produced 3,359,100 kilowatt hours of electricity and took in a total of $516,898 worth of revenue — from the power sold to National Grid.

Debt service on the construction costs, as well as operation and maintenance expenses, totaled $235,679. “

So profit = revenue-expenses and that netted the town $281,219 profit. Not too shabby.

Now the town used some of the 3,359,100 kWh but I don’t know how much. They charged National Grid 11 cents + 4 cents or 15 cents a kWh. That’s more in the realm of reality as opposed to Deepwater Wind’s 24.4 cents. If I run it revenue/power it comes out to 15 cents a kWh.

Cost is what really matters though. 7 cents a kWh. So the reality is you could actually produce wind power for prices competitive with the standard offers from National Grid and satisfy your debt service and maintenance at say 10 cents per kWh. I’d be willing to go wind power for that price.

I see the best avenue for wind power projects being run by the cities, towns and state. This is a disruptive technology and we cannot allow the incumbent power providers to take this and run it under the same scheme we’ve run electric services under for the last century.

I was talking to a friend of mine who is no fan of National Grid especially since his business went without electrical power for three days during the recent flooding here in Providence. The stinker of it was that the bank right next door had power.

But I told him I was glad the PUC tanked the Deepwater project. He started yammering about how this would have put RI on the map, that they’d build the turbines here, etc.

I told him the best we could hope for would be to act as a distribution point for the northeast because in order to sell those turbines at a reasonable price they are NOT going to be manufactured here in the United States but instead in China or India.

And the whole panacea of wind power is that even if we did build them here in the U.S. it’s a short term market. Once you have installed all the wind turbines you can install, there isn’t any sense in continuing large scale manufacturing.

I also told him about how Nikola Tesla’s wireless power distribution was killed by Westinghouse because they couldn’t slap a meter on it. But then I explained that the generators run whether somoene is using power or not. It is for the most part a fixed cost to generate the power.

But that is the other thing about wind power. Suppose Portsmouth’s debt service is for ten years. After that it’s expenses are for maintenance and might total $10K per year.

$10,000 divided by the output gives $0.002 per kWh cost wise. In essence I agree with my friend, wind power gets cheaper as time goes by and debt is serviced.

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