Projo Biz Blog

By ALEX KUFFNER
Journal staff writer

PROVIDENCE, R.I. -- National Grid is willing to resume negotiations with Deepwater Wind over a power purchase agreement if certain conditions are met first, according to a letter from the utility to the offshore wind farm developer.

The primary stipulation is that Deepwater must commit to a fixed price in the contract that increases at a consistent annual rate and is not subject to other variables, including potential project delays or other complications that could raise the cost of the developer's plan to install up to eight turbines off the coast of Block Island.

The letter, which was filed with the state Public Utilities Commission on Wednesday, follows National Grid's decision on Oct. 15 to reject a proposed agreement with Deepwater, because, the utility argued, the price for electricity generated by the small wind farm would be prohibitively high.

National Grid calculated the price to be 30.7 cents per kilowatt-hour, more than three times the price of electricity from conventional sources, according to filings with the PUC. In interviews last week, Deepwater executives said the price would be lower -- between 20 and 25 cents per kilowatt-hour -- and would increase by 3.5 percent each year.

National Grid maintains that although that pricing range was published in the media after talks broke down, Deepwater never submitted it formally during negotiations.

"While we cannot promise that we would necessarily support a new proposal at the stipulated pricing, given the fact that 20 to 25 cents per kilowatt-hour is still quite high, we certainly would consider and evaluate it," wrote Madison N. Milhous Jr., National Grid's director of wholesale market relations, to Deepwater chief executive officer William M. Moore.

 Tags  Deepwater Wind National Grid offshore wind Public Utilities Commission

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