Bill would establish state Power Authority
BYLINE: Timothy C. Barmann, Journal Staff Writer
The agency would oversee the construction of wind farms and control the electricity produced by them.
The Senate Corporations Committee is expected to consider today a bill that would create the Rhode Island Power Authority, a quasi-public agency designed to facilitate the development of renewable energy projects, such as the offshore wind farm proposed by Governor Carcieri.
The Rhode Island Power Authority Act would establish an agency, similar in structure to the state's Economic Development Corporation, which would have the power to borrow money, construct and own energy projects.
The bill was submitted by Senate Minority Leader Dennis L. Algiere, R-Westerly, on behalf of Carcieri, the governor's office said. One of the cosponsors of the bill is Senate President Joseph A. Montalbano, D-Lincoln, which is a signal that the bill is likely to be supported by the Senate.
"Over the last year and a half, my administration has worked hard to make Rhode Island a leader in the development of renewable sources of energy," Carcieri said in a statement. "The creation of a Rhode Island Power Authority would represent a critical step in that process."
"These new projects will decrease Rhode Island's reliance on oil and natural gas, thus reducing the major environmental threats posed by the continued use of these fossil fuels," Algiere said in a statement.
The power authority's main role would be to implement Carcieri's plan to generate 15 percent of the state's electricity usage from wind power. Last month, the governor released the results of a $380,000 study, commissioned by the state, that identified 10 offshore sites, and 1 onshore site that would be economically viable locations for wind farms.
Not all the sites would need to be developed to reach Carcieri's 15-percent goal. For example, developing two areas off the coast of Block Island would exceed that goal, according to the study.
Once a stakeholders group recommends which site or sites would be best, the power authority would seek bids from developers who agree to design, construct and operate the wind turbine facilities, said Andrew Dzykewicz, the commissioner of the Office of Energy Resources.
The agency would also be responsible for arranging the financing for the project, which could cost $900,000 to $1.9 million.
The power authority would retain ownership of the wind farm, as well as the electricity it generated, and could enter into contracts with suppliers, such as National Grid.
"Rhode Island then gets the full benefit of its investment," he said.
Without a power authority, Dzykewicz said a private developer could step in to build and operate its own wind facilities. But under that scenario, electricity from the project would likely be more expensive since the developer would expect to make a profit.
Under the proposed legislation, the power authority would consist of five board members - four appointed by the governor with approval from the Senate - and one, the chairman, would be the commissioner of the Office of Energy Resources, the position now held by Dzykewicz.
The power authority would have a staff of perhaps three or four people in addition to the board members: an executive director, a finance director and one or two project managers, Dzykewicz said.
He estimated that administrative costs would be $600,000 to $700,000 a year. The agency would be self-supporting, using a portion of the money it would collect by selling electricity to cover operating costs.
Dzykewicz estimated that if the bill passes, it could take five years before a wind farm is built and becomes operational. Permitting could take about two years, he said, and construction would last for about 18 months.
The power authority would also take on some duties now performed by other state agencies, under the bill. For example, it would take over administration of the Renewable Energy Fund, which is now managed by the Office of Energy Resources.
tbarmann@projo.com / (401) 277-7369