March 14, 2018

Ten Times Too Much?

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A critic of the proposed wind farm to be built off the coast of Montauk charged this week that Long Islanders will end up paying as much as 10 times more than the market rate for wind-generated electricity.

Si Kinsella is a Wainscott resident who lives near Beach Lane, where Deepwater Wind intends to land a cable from the wind farm and then run it underground to a PSEG generator a couple miles away.

Kinsella, in a missive mailed to town officials and Wainscott residents, noted that PSEG/LIPA agreed to buy all of the power generated by the Deepwater facility for the next 20 years. The contract also states the price per kWh (kilowatt hour) will increase each year. All of the companies involved balked at revealing exactly what the price will be.

"Why are town residents being bound into a 20-year contract to pay for wind-generated electricity without being told what the price will be? Why are local voters and taxpayers being kept in the dark?" Kinsella asked. He said LIPA/PSEG officials said it was omitted from the contract at the behest of Deepwater.

Kinsella said he calculated, "The rate that Deepwater Wind South Fork, LLC ("DWWSF") probably will be charging is nearly 10 times the market rate for wind-generated electricity in the final year of its contract with LIPA. The average multiple by which DWWSF will be overcharging LIPA during the 20-year term of the Purchase Price Agreement is likely to be over four-times the forecast market rate for wind-generated electricity." The missive was sent to own officials, Wainscott residents, and others.

Clint Plummer, vp/development, Deepwater Wind, said the projections in Kinsella's graph are inaccurate. However, he agreed that the rate structure is front loaded to provide cheaper power at the beginning of the 20-year project and more at the end.

"We did that to help ratepayers," Plummer said. "We took all the risk on our party in the near term but it will tick up over time with inflation."

Kinsella said the Bloomberg New Energy Finance's annual long-term economic forecast of the world's power sector forecasts that power will be less expensive in the future than it is now.

"There are very few people against wind farms but no one is in a favor of deception," Kinsella commented.

Plummer said it is important to remember how Deepwater got involved in the process. It was one of 21 companies that answered a call from PSEG/LIPA to provide new sources of electricity to the South Fork. "They determined our project would be the most cost effective. We've had 16 public meetings. We get paid only when we deliver."

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