As of December 12, 2016 Deepwater Wind, developers of the Block Island Wind Farm, announced that they had “flipped the switch” and the turbines were in commercial operation, producing “clean, affordable” electricity for the people of Block Island, Rhode Island and (presumably) New England.
Maybe it is time to review the bidding and assess the value of this project. The electricity rate payers of Rhode Island deserve an accounting.
To review, the main benefits of the wind farm, proclaimed for the project at the outset by its proponents, were:
• Block Islanders, who pay some of the highest rates for electricity in the country, would see reductions in their electricity bills of up to 40 percent;
• While there would be five huge windmills placed less than 3 miles off the south shore of Block Island, they would be hardly noticeable;
• Since these would be the first offshore wind turbines in the US, Rhode Island could become the hub of a new industry, creating many high value jobs for the State;
• The wind farm would be a leader in the fight against global climate change, saving the planet and making Rhode Island “the Green State;”
• Block Islanders, long deprived of decent cable TV and internet services, would get access to world class cable TV and internet.
Politicians, federal, state and local, jumped on the bandwagon celebrating the arrival of “clean, affordable electricity.” If this all sounds reminiscent of the lead up to the 38 Studios debacle, it is. None of these benefits are materializing.
In fact, Block Islanders were told last year by John Bell, a rate expert, of the Rhode Island Division of Public Utilities that they would see little, if any, reduction in the electricity rates. Space does not allow me to explain the complex structure of how Block Island rate payers will eventually be billed for electricity, but Mr. Bell was correct. There will be no significant cost savings for the electricity rate payers of Block Island as a result of this wind farm.
In fact, the windmills are hardly unobtrusive. Viewing the windmills from the south shore last Fall, I and many others looking at them from the lawn of the Southeast Lighthouse were stunned at how close they seemed, how they dominate the view. Some may argue that will attract tourists to the island. Some residents of the south shore, however, may feel that their pristine Atlantic seascape has been converted into an industrial landscape of considerably less aesthetic value and may ultimately reduce the value of their properties. While this may seem inconsequential to those who don’t own such real estate, a deterioration of real estate values could eventually reduce the tax revenues that New Shoreham relies on to fund its operations, consequentially raising tax rates for all.
In fact, Rhode Island is not the hub of a new, fast growing industry, nor is it likely to become one. The real expertise in erecting offshore platforms, which requires massive and expensive special equipment, is resident in the states that border the Gulf of Mexico and is likely to remain there.
In fact, companies looking for a place to do business look closely at costs: what do they see? A state that cannot afford to maintain its roads has loaded another layer of unproductive expense onto those who live and work here. They will not flock here because of those windmills.
In fact, the Intergovernmental Panel on Climate Change (IPCC) report explicitly warns that global climate change patterns are irreversible, even if carbon dioxide emissions are reduced to zero. That means that the wind turbines don’t help at all in the fruitless fight against climate change, but rather where the money needs to go is into mitigation of the negative effects of climate change. An example of mitigation is the state’s effort to shore up the bluff in East Matunuck. Not so glamorous, perhaps, but probably an harbinger of our future.
In fact, the residents of Block Island are struggling to get cable TV and internet out of the deal. While the fiber optic cable promised to be included in National Grid’s “Shore 2 Sea” cable has been included, it also seems that the costs of actually wiring Block Island to connect its homes to the internet, possibly as much as $10 million, is more than the major providers of cable services, such as Verizon or Cox, are willing to undertake for such a small market.
The only winners in this whole mess are the investors. No attention has been paid to why the investors might have thought this was a good deal. The answer is what I call “the prize money.” In short, when the development is completed and the wind turbines are brought on line, the investors are rewarded by the Federal Treasury with a check for an estimated $100 million. That is far more than they risked on the project, a handsome prize, indeed.
But, who is ultimately paying for this roughly $400 million project? Yes, you guessed it, the people of Rhode Island, and we didn’t even get to vote on it.
Yes, it does remind one of 38 Studios, doesn’t it. But, whereas the investors in 38 Studios may have lost everything they put into it, in this case the investors have hit the jackpot. Rhode Island has hit another pothole.
Zachariah Allen has worked since 1975 as a consultant and project development advisor in the energy industry. He presently lives in Perryville, returning to Rhode Island after many years of absence.