The Block Island Times
http://block-island.villagesoup.com/p/962002

EUTG votes for Deepwater decommissioning research

Tempers flare over councilor's request
By Stephanie Turaj | Feb 16, 2013

At its Monday, February 11 meeting, the Electric Utility Task Group (EUTG) again discussed decommissioning costs related to the proposed Deepwater Wind Block Island wind farm, but a later discussion on renewable energy resulted in a heated exchange between group member Bill Penn and Town Councilor Chris Warfel.

Town Manager Nancy Dodge updated the EUTG of a conversation she had with the state Coastal Resources Management Council (CRMC) about decommissioning Deepwater Wind’s turbines. Deepwater seeks to install a five-turbine, 30-megawatt offshore wind farm off Block Island, and is currently in the permitting process with various state and federal agencies.

The CRMC is the primary state agency responsible for permitting Deepwater, and the removal of the turbines after they have reached the end of their life, or have failed, falls under the agency’s purview.

“[Decommissioning] would be an issue they would review,” Dodge said. “They would just not hire any experts.”

“That’s all the more reason that we take up charge of the issue as a commission,” said Penn. “If the CRMC is not going to take it seriously enough to hire an expert consultant to counsel them, then we as a town need to take up that role.”

The group voted to ask the Town Council to engage an expert consultant who will verify Deepwater’s methodology for determining the decommissioning costs and plans.

Deepwater’s Block Island Project Manager Bryan Wilson provided updates on the decommissioning process, first explaining that Deepwater estimates decommissioning costs for this specific project could reach $10 million.

Wilson said that Deepwater would set aside a separate account for this money, and neither the company’s lenders nor its equity investors would have access to this account.

“In the instance that the project needs to be decommissioned earlier than expected due to serial failure of the turbines, Siemens will pay the damages, and will first pay [for] the decommissioning and then ... the lenders and equity investors,” he said. Siemens manufactures the wind turbines proposed for this project.

Wilson also said that if the turbines were to be damaged by an outside factor, the damage may be covered under targeted insurance.

In addition, Wilson said that if the cable failed for a period of time, Deepwater still plans to pay money to the decommissioning reserve fund by making up the shortfall once the company's revenue stream is re-established. *

“So the decommissioning fund takes priority takes priority over the lenders?” asked EUTG member Everett Shorey. Wilson responded with a “yes,” but then added that the ultimate decision is up to the CRMC.

Energy request spurs sparks

As the group tackled its next agenda item, Penn immediately expressed reluctance to address it.

Warfel asked the EUTG to research an island-based renewable energy initiative and how to finance such a project. He also provided his own analysis of such an energy initiative.

“I have a big problem with this,” Penn said. “This particular item is a personal political agenda of Chris Warfel ... It seems to me, unless the Town Council endorses this request to invest our intellectual capital, it is inappropriate for us to move forward, and if the rest of the members want to take it on as a volunteer basis, I absolutely refuse because I disagree with Chris in terms of his political agenda.”

“Stop right there,” said Warfel, raising his voice. “Political agenda? I am fulfilling my fiduciary responsibly to the Town of New Shoreham by looking at alternatives, and I’ve been doing that since I’ve served on the EUTG. How dare you say stuff like that?”

“I absolutely refuse to expend my political capital to support your position,” said Penn in response. He explained that he did not think it appropriate that Warfel signed his request as a council member, rather than a member of the public. Warfel said later that he was not speaking on behalf of the entire Town Council — although the council had asked the EUTG to perform research relating to this topic.

After a few verbal broadsides back-and-forth, EUTG Chair Barbara MacMullan interjected, saying that if someone asks the EUTG to look at an issue, the EUTG should look at the issue.

A bit later, Penn asked Warfel, entirely unprompted, if he had voted to appoint him to the EUTG. Warfel said he had. “There was no reason not to vote for you,” Warfel said. “But if it was now, I’d have some serious reservations.”

The group went on to discuss Warfel’s request.

Warfel’s letter reads in part: “I believe most objective analyses would show the best long term option for Block Island, economically and environmentally, is for Block Island to develop its indigenous renewable energy resources, develop cogeneration at appropriate sites...”

A $7-million cable study

The Town Council had also made a request of the EUTG: find out what it would cost to complete a study to determine the cost of a standalone electric transmission cable to the mainland.

Council member Sean McGarry, who had originated the request, explained to the EUTG that he was looking for a study that could result in the cable “going into the ground.”

MacMullan explained that the town had, in the past, already completed a study of a standalone cable. A more detailed study, like one McGarry would want, could cost millions. She asked Wilson how much Deepwater Wind spent to for a study of its proposed electric cable; he said $7 million.

McGarry suggested he would propose this amount at town budget hearings. MacMullan asked McGarry if he would seriously propose a study for that amount. “I would say yes, I plan on putting it in the incoming budget,” he responded.

Solar RFP

During public comment, former Town Councilor Peter Baute asked for an update on a solar RFP (Request for Proposals).

Last July, the EUTG issued an RFP for a purchase power agreement for solar panels on yet-to-be-determined town buildings. But in August the group put the plan on hold, amidst concern that it could be encroaching on the Block Island Power Company’s franchise to sell electricity to the town. Members had agreed to get a legal opinion from the town.

MacMullan told Baute that an RFP draft had been given to the town’s attorney, but the discussion had been put on hold. EUTG members agreed to put the topic on next month’s agenda.

*In the version of this article that appeared in print, Wilson was misquoted. He did not say that Deepwater would pay for electricity it's not generating.

Comments (1)
Posted by: Michael Delia | Feb 18, 2013 09:54

Someone should explain to Bill Penn know that he needs to have political capital in order to spend it. Maybe he's planning to take out a loan.


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