Last week, the Rhode Island Public Utilities Commission rejected a power purchase agreement (PPA) between Deepwater Wind and National Grid, the state’s largest utility, stating that the deal’s projected cost of electricity did not qualify as “commercially reasonable” under a test required by state law. Deepwater would have charged National Grid 24.4 cents per kilowatt-hour in 2013, the first year of the contract. Prices would increase 3.5 percent per year after that.
The state previously passed legislation requiring National Grid to purchase the energy output from an offshore wind project. The PPA that was ultimately signed was for the output of a 28.8 MW project near Block Island.
The news of the PUC rejection comes shortly after receipt of $23.3 million in stimulus funds by the Quonset Business Park to improve piers, roads and rails and to install a crane in preparation for offshore wind development. Deepwater Wind has signed an agreement to lease 117 acres in the Quonset Business Park to store and assemble components, and ultimately create 800 jobs, as projected by Deepwater.