Projo Biz Blog

Even though a New York-based wind farm developer has abandoned its plans to build an offshore wind farm off the coast of Rhode Island, the company is still hoping to get into the wind energy business here.

Allco Renewable Energy Group Ltd. has approached half-dozen Rhode Island communities with what some see as an appealing offer. The company will finance, build, operate and own a wind turbine within a town and sell the power at a price that's at or below the price from the local utility company. And Allco will guarantee that price for 20 years.

"We think it makes a lot of financial sense to go with a developer-financed model with the town," said Bill Fischer, a spokesman for Allco.

Allco was one of the seven developers that submitted proposals to Governor Carcieri as part of the governor's plan to build a privately-owned and financed wind farm off the coast of Rhode Island. In September, Gov. Carcieri's selection team chose another company -- Deepwater Wind -- to be the state's preferred developer. That company is now negotiating a final agreement with the state.

Fischer said Allco's model may be attractive to towns that have lots of wind, but don't have the money to buy their own wind turbine, as some Rhode Island municipalities are planning to do.

Allco made a presentation to the Tiverton Town Council last month, and the company's approach seemed appealing to the group, said Brian Medeiros, a council member.

Fischer declined to name the other communities that Allco has approached.

"The lack of any risk or any financial investments up front [by the town] was one of the key qualities," Medeiros said. "That's why their pitch was appealing."
He said that unlike towns such as Portsmouth and Barrington, which are planning to buy and own their own wind turbines, Tiverton wasn't in a position to ask voters to approve a bond issue to pay for it.

If Tiverton agrees, Allco said it would first put up a meteorological tower, at its own expense, to measure the wind over a period of nine months to a year, Fischer said. Once that data is analyzed, the company will know whether a wind turbine at that particular location would be economically viable.

Then, the town would sign a long term agreement with Allco in which the company would lease the land where the wind turbine would located, and the town would agree to buy the power at a fixed price over a period of 20 years.

The company would erect up to three wind turbines, sized to provide enough power to meet the municipality's electricity usage.
Medeiros said Allco told the council it could sell the power at 15 to 20 percent below the market rate.

(Fischer, the Allco spokesman, would say only that it anticipates its price will be below the standard offer rate offered by National Grid, which is currently about 12.5 cents per kilowatt-hour.)

The downside of a developer-owned wind turbine, Medeiros said, is that the town won't profit from any excess electricity generated that is sold back to the power grid. That would go to the developer.

"If we could afford to do it, we certainly would have looked into that."

Medeiros said the town is considering allowing the tower to be erected at the town's landfill, a site that is far enough away from residents that it may not be objectionable to neighbors.

At the council meeting at which Allco made its presentation, the council voted to issue a request for proposals to see if it could get a better deal from other companies.
One other company has offered a similar offer, Medeiros said, except that it would require the town to pay $5,000 to $6,000 to do the wind speed testing.

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