A Rhode Island power deal points to higher rates, but advocates say deepwater wind farms will pay off

By Tux Turkel, Staff Writer January 3, 2010
Electricity from wind farms off the Maine coast is likely to cost more than what customers now pay, experts say, and a power purchase deal for a proposed offshore wind project in Rhode Island is raising questions about how much.

New Jersey-based developer Deepwater Wind LLC last month signed a 20-year agreement with National Grid, which serves Rhode Island, to buy power from a 30-megawatt wind farm three miles off Block Island. The Block Island Wind Farm is the first offshore power purchase deal in New England, so it offers some indication of what ocean wind power could cost in the region.

The rate is 24.4 cents per kilowatt hour, escalating 3.5 cents per year. That starting rate is roughly 60 percent more than what home customers in Maine and Rhode Island now pay on their total bill for energy and distribution. In Maine, home customers on average pay 15.4 cents per kilowatt hour. Roughly 9 cents of that is for energy.

But it’s inaccurate to compare the Block Island Wind Farm to the large-scale wind projects Maine wants to attract to deep water off its coast, according to Habib Dagher, the University of Maine professor spearheading the state’s effort.

Rhode Island’s eight-turbine wind farm is a demonstration project in shallow water, he said, too small to take advantage of the economies of scale needed to reduce costs. Any comparison also ignores the fact that fossil fuel prices are low today, but likely will rise when the economy recovers. Read more here.

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