Regulators approve Block Island deal

Rhode Island regulators have signed off on the purchase by National Grid US of transmission facilities that will link the 30MW Block Island demonstration wind project to be located in state waters with the mainland electric grid.

Under the agreement, utility National Grid US will pay $9.48m to project developer Deepwater Wind for assets that include right-of-way on the ocean floor in federal waters between Block Island and shore, and state easements for the project. The amount will also include a development fee and other costs.

National Grid will build, own and operate the 20-mile (32.1km), 34.5kV submarine electric cable and associated terrestrial infrastructure including a new substation and switchyard, according to its filing with the Rhode Island Division of Public Utilities and Carriers (DPU).

In its ruling, DPU stipulates that National Grid shall not begin the physical installation of the submarine portion of the transmission facilities until Deepwater has delivered evidence, including through third party verification that “fabrication has begun of the jacket foundation structures that will support the wind turbine generators.”

The other condition is that the purchase price will not exceed the amount agreed by both parties in the filing.

National Grid estimates that the cost of the transmission facilities between $56.25m and $112.5m, which it expects to recover through rates filed with the Federal Energy Regulatory Commission.

The five-turbine array will also cover electricity needs of Block Island, where distribution is through a municipal utility. National Grid has a 20-year power purchase agreement with Deepwater that pays 24.4 cents per kWh in the first year, with a 3.5% annual increase after then.