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Friday, February 13, 2015

National Grid slows down turbine development

By TIM FAULKNER/ecoRI News staff

PROVIDENCE — The construction of 10 wind turbines, and possibly dozens more, has been stymied by a dispute between a renewable-energy developer and National Grid.

For more than three years, Wind Energy Development LLC, headed by construction company owner Mark DePasquale, has been feuding with National Grid over the cost of connecting proposed turbines to the electric grid, a process known as interconnection.

So far, Wind Energy Development (WED) has built one commercial-scale turbine in North Kingstown and has received approval to build 10 400-foot-high wind turbines in Coventry. 

Construction is ongoing for two of those turbines at the site of the former Picillo Farm, a 99-acre Superfund site owned by Coventry. Site work is underway for another six turbines on private property adjacent to the former pig farm. Sites are also being prepared for two more turbines along Route 117.

On Feb. 17, WED is scheduled to present proposals for two turbines to the North Smithfield Town Council.

DePasquale claims National Grid is stalling the projects and jeopardizing plans for others by delaying approval of paperwork and frequently requesting new information. The utility also has increased WED’s interconnection cost from $270,000 to $1.2 million, according to DePasquale.

He believes National Grid is stymieing interconnections and intentionally inflating costs to dissuade developers like him from generating electricity and selling it directly to customers. This process was helped last year by a change in state law that allows all public entities, such as water supply boards and sewage treatment facilities, to enter into long-term power-purchase agreements.

“That’s a threat to National Grid. A big threat,” DePasquale said during a Jan. 29 Statehouse hearing for a bill that requires utilities such as National Grid to complete interconnection agreements within 60 days.

The legislation asks the utility to pay for the interconnection through its maintenance fund, called the Electric Infrastructure, Safety and Reliability Account. The bill also looks to double the size of a renewable-energy project that qualifies for the state’s fixed-pricing program, known as distributed generation (DG).

DePasquale said he’s willing to pay his fair share of the interconnection costs, but not for maintenance that should have been done years ago. The stall tactics, he claimed, are holding up $81 million in new construction and $12 million in lease revenue to private property owners.

Coventry and West Warwick have already signed long-term, fixed-price agreements to buy power from WED turbines and are eager to receive the savings, he said.

DePasquale added that the interconnection dispute also is delaying new contracts with hundreds of other potential partners for wind turbines, such as farmers. German wind turbine company Vensys, he said, is also looking to open a facility at the Quonset Business Park to import its turbines and meet the demand WED is creating in the region.

WED has filed a dispute with the Rhode Island Public Utilities Commission that seeks to prohibit National Grid from assessing a charge-through tax and ends the practice of overcharging for studies.
National Grid says the delays and the 150-day waiting period are justified in order to address the complexities of a relatively new renewable-energy program. 

Mike Ryan, National Grid’s vice president of government affairs for Rhode Island, said the company has devoted $500 million to update its substations, utility poles and electric wires.

He said using funds from the Electric Infrastructure, Safety and Reliability Account for interconnection would increase ratepayer costs. He noted that all other states require renewable-energy developers to pay the entire cost for interconnection.

“Those costs are always built into it,” Ryan said.

The state Office of Energy Resources, which oversees the DG program and other renewable-energy incentives, said it hasn’t received complaints about interconnection from other commercial-scale renewable developers. However, the three turbines built at the Narragansett Bay Commission water treatment facility at Field’s Point was delayed by a protracted dispute over interconnection costs.

The sponsor of the bill, Rep. John Carnevale, D-Providence, said National Grid is using delay tactics and “squeezing” WED to pay for maintenance the company has neglected for decades. Carnevale claimed National Grid is instead spending its money on executive pay.

He noted that last year compensation to National Grid CEO Steve Holliday increased 56 percent, to $7.8 million. He said Steve King, head of the U.S. operations for National Grid, received a 58 percent pay raise, to $6.8 million.

“And they hit our ratepayers with a 23 percent increase,” Carnevale said.

He noted National Grid’s repeated resistance to legislation that expanded wholesale buying and selling of electricity, known as net metering, by independent power producers.

“They don’t want competition plain and simple,” Carnevale said.

The legislation was held for further study by the House Committee on Corporations. The PUC said it expects to conduct a full review of the matter.