Ever find yourself talking back to a TV show? You know, one of the opinion commentators or member on a panel show rattling on about some nonsense you just know needs challenged?
I’ve just had a similar experience with an article in Trading Markets.com. The article, titled “National Grid OKs deal to buy Deepwater’s wind-generated power” is quite good, but the content of the article soon had me talking back to the computer screen. Take a look – (article text in bold):
Hmmm … so, what’s this all about? National Grid has agreed to purchase electricity from Deepwater Wind’s proposed wind farm off Block Island.
OK! What’s that do for me? (The agreement is) a critical step forward for the offshore wind developer’s plans to bring clean energy to Rhode Island.
No, not the wind developer … for me? What’s the deal? National Grid will pay Deepwater 24.4 cents per kilowatt-hour of electricity starting in 2013. The price will then rise by 3.5 percent annually over the 20-year agreement.
But, even so, that will make my electric bill cheaper, right? National Grid estimates that the typical Rhode Island household’s annual electric bill — which currently stands at about $957 — will see an increase of $16.20 in the first year of the contract.
What? How come? I thought the wind was free. That includes a 2.75-percent markup on electricity generated from renewable sources that National Grid is allowed by state law. It also includes the cost of a power cable from Block Island to the mainland that would be required for the project. The wind farm would supply power to Block Island, but any excess would be fed to the rest of the state.
National Grid is just jumping into this, so how does their increase stack up against what the developer was forecasting? National Grid’s estimate of the additional cost for its customers differs significantly from Deepwater’s calculation, which is about $7.
How can that be? Do you one of you guys need a new calculator? The discrepancy can be explained, in part, because Deepwater’s number does not account for the cost of the cable. Deepwater did not factor in that cost because it’s still unclear who would install it.
Oh, yeah, a little oversight! Who would have thought you’d need a cable to actually move the power! Anything else you missed, like who will pay to cart the turbines off when they stop producing? Or do we, perhaps, have the makings of a row of fish shelters for flying fish?
Who thinks this is a good idea for us Consumers? Jerry Elmer, staff attorney for the Conservation Law Foundation, which has been monitoring the talks closely, said the premium that customers will pay for clean energy is reasonable, especially considering the detrimental effects on the environment from cheaper sources of power.
Wait a minute, a lawyer, who likely makes a ton more than us average folks, thinks it’s better for me to pay higher prices for electricity? Help me out with that one, please! “We think it is very, very important to get new renewable-energy projects up and running,” he said in an interview. “It’s worth paying a small premium to do that. It’s important to account for wind generation that has zero carbon emissions. When you internalize the cost of carbon, that raises the price of electricity from fossil fuels.”
What a lot of baloney! Wind could be called zero carbon emissions during the time it happens to be running and producing 30% of the nameplate capacity. But I hear reports that 16% is about all grids expect to see from these towers, so before we dump bags of taxpayer funds into this little adventure, how about the name of the fossil fueled power plant you’re shutting down as a result. Because remember, if you don’t close fossil fuel plants, wind’s contribution to carbon emission reduction is zero.
Who else thinks this is a great idea? Governor Carcieri’s office announced the agreement minutes after the filing was made, heralding it as “a significant milestone in Rhode Island’s path toward developing the nation’s first offshore wind farm and establishing a green-collar industry.”
Oh, Lord! A politician … “This is a tremendous accomplishment and ensures that Rhode Island remains the leader in developing the nation’s first offshore wind farm,” Carcieri said in a statement. “I commend National Grid and Deepwater Wind for recognizing the importance of this agreement both to the ratepayer and the Rhode Island economy. Investing in renewable energy reduces our exposure to the volatility of energy prices on the world market and this agreement establishes confidence in the financial feasibility of the project.”
They should have just captured the energy from that burst of gas and scrapped the turbine idea! So how did this all come together? The accord comes after months of negotiations and two rejections by National Grid of earlier offers from Deepwater.
Let’s see, I’ll come back to all that insider financial mumbo jumbo and stay focused on the most important part … what’s in if for me, the Consumer? Why a multi-year contract in the first place? In an interview, William Moore, chief executive officer of Deepwater, said the agreement is critically important to his company in securing financing for the project. “A project like this would not happen without a PPA [power-purchase agreement],” he said.
No, darn it, that’s the wind developer again! I asked what’s in it for me – you know – the ultimate bill payer? We know these clunkers won’t see the light of day unless the developers have everyone in the chain tossing cash at them. What exactly does it do for us Consumers? In a letter filed with the signed agreement, National Grid attorney Ronald T. Gerwatowski said power from the wind farm will be more expensive than from conventional sources, which average about 9.2 cents per kilowatt hour.
Wait a minute, more expensive??? Then would someone please explain why I should go for this boondoggle. “Having said this, however, there are valid policy reasons to move forward,” he wrote.
Policy reasons??? What “policy reasons?” “Specifically, if the State of Rhode Island desires to meet climate-change objectives through the development of offshore wind, this small demonstration project is a reasonable place to start.”
So, it has nothing to do with me, the Consumer, at all? Is that what you’re saying? I pay higher prices so a developer can make a lot of money building a power plant that doesn’t power, selling it to the National Grid, a forced, presumably reluctant buyer, with the main purpose of the project being the reduction of emissions, which it won’t? And I should be grateful? How exactly does this crap happen?
TIMELINE How the deal happened
June 26: Governor Carcieri signs law requiring National Grid to purchase renewable energy.
Aug. 31: Deepwater Wind is the only developer to submit a proposal by National Grid’s deadline.
Oct. 15: National Grid rejects Deepwater’s first offer, estimated at 30.7 cents per kilowatt hour.
Nov. 18: National Grid rejects a second offer from Deepwater of 25.3 cents per kilowatt hour.
Dec. 9: An agreement is reached at 24.4 cents per kilowatt hour.
There you go! The law forced National Grid to accept the power from the only bidder in the game. So, it was a shotgun wedding after all and we Consumers pay for the whole thing, and don’t even get invited to the reception.
Can you at least bring us back a T-shirt from the honeymoon trip?
Go to Trading Markets.com for the complete article.