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All our federal and state subsidies for green energy is designed to boost the price of electricity of us all?
Block Island
Wind Farm: Windfall for the politically connected
Published August 20. 2016
6:38PM | Updated August 21. 2016 7:23AM
It's hard not to admire the five spanking new windmills off the
southeast coast of Block Island, America's first offshore wind farm.
They seem to be getting good reviews on the island, too, where
anxiety about how they would look seems to be subsiding.
The windmills, as seen in a series of mesmerizing aerial photos
last week from The Day's Sean Elliot, are actually quite beautiful. From the
air, the five look like a graceful art installation, statuesque sentinels
staggered in a line just off the island's shoreline.
They are a gift to the island, a project that will replace an
aging and derelict system of diesel power generators, running off fuel brought
by ferry, that now produces the most expensive electricity in the country.
The island will not only see a drastic reduction in electric
rates but also will be connected by cable for the first time to the mainland, a
$100 million umbilical cord that also will bring high-speed internet.
The greatest beauty of the wind farm, though, may be seen by
political observers, who can't help but marvel at the way this economic
windfall has gone to the politically connected — millions of dollars in
profit collected in little increments from all of Rhode Island's electric
users.
The deal making for this at the highest levels of Rhode Island
politics has gotten only scant attention in the extensive news coverage of the
creation of America's first offshore wind farm.
One outspoken critic was the former attorney general of Rhode
Island, Patrick Lynch, who cried foul about the above-market rates guaranteed
for the windmill-generated kilowatts, while running for governor, a race he
eventually abandoned.
"The 'demonstration project' off Block Island would
demonstrate how easy it is to make money off Rhode Island," Lynch once
complained.
One of the best explainers about the politics of this
money-making clean energy deal appeared in Forbes last spring, under the
headline: "Is America's First Offshore Wind Farm A Real Revolution Or
Just Another Green Boondoggle?"
The long piece by staff writer Christopher Helman explains how
the project got its guaranteed above-market electric rates after intervention
by state lawmakers and then-Gov. Donald Carcieri.
Under the deal engineered by Carcieri, Rhode Island's regulated
utility, National Grid, will be required to pay 24.4 cents per kilowatt hour
for the windmill power — more than twice current market rates.
Sweetening the deal even more, there are price escalators of 3.5
percent a year, so that by the end of the 20-year contract period, National
Grid will be paying 50 cents per kilowatt hour from the wind farm.
Forbes calculated that the wind farm eventually would generate
some $900 million, and with $100 million in energy tax credits, the investors
in the project are looking at a return on investment on the order of 7.5
percent.
"It is a legally guaranteed, risk-free money machine,"
Forbes noted.
And how did it happen?, Forbes asked.
"Connections," the magazine said, explaining that the
farm developer, Deepwater Wind, is run by none other than Jeff Grybowski,
former chief of staff to Gov. Carcieri.