September 5, 2008

New Rules for Wind Farms

By Timothy C Barmann; Andrew Dzykewicz

PROVIDENCE -- Rhode Island's top energy official said yesterday that proposed federal rules for leasing offshore ocean space to wind- farm operators will not conflict with the state's own plan to select a developer to build a wind project off the coast.

Andrew Dzykewicz, chief energy adviser to the governor, said the rules are "unlikely to interfere" with the state's plans. But he said the state's Office of Energy Resources plans to file its own comments about the rules to make sure there won't be any potential conflict.

The federal Minerals Management Service, part of the Department of the Interior, has proposed the new regulations, which would establish a program to grant leases, easements and rights-of-way for alternative-energy projects on the ocean's outer continental shelf. Federal jurisdiction generally begins three miles offshore.

The public comment period on the proposed regulations ends Monday, and the agency said it expects to issue final rules by the end of the year.

At the same time, several East Coast states, including Rhode Island, are devising their own permitting regulations and pursuing offshore wind projects.

Governor Carcieri has proposed that a private company construct, operate and finance a wind facility that would produce enough power to supply 15 percent of the state's electricity. Cost estimates have run as high as $1.9 billion for the project.

Seven companies have submitted proposals and Dzykewicz said a team of state evaluators completed their interviews with the finalists on Monday and Tuesday at the University of Rhode Island's Graduate School of Oceanography.

"I thought [the interviews] went well," he said. "I think we got a lot of information."

He declined to say whether all seven companies were interviewed, or provide further details about the selection process, citing confidentiality rules that pertain to companies bidding for state contracts.

"Everything about this proposal is confidential until we select somebody," he said.

Dzykewicz added that the governor's evaluation team plans to make a decision by "mid-month."

How the federal rules for granting wind-farm leases are written is important to state officials because the state's preferred site for a wind farm -- to the south and west of Block Island -- is partly in state water and partly in federal water.

Dzykewicz said he thinks the proposed federal rules do need some changes. "I think they need to address some state-related issues, especially where states are undergoing selection processes like we are, like New Jersey is and like Delaware has."

The proposed rules, he said, relate primarily to lease revenues to the federal government.

"What we think should be equally, if not more, important, is some qualification process that states typically go through, some public bidding process," he said.

Nevertheless, Dzykewicz said that the federal rules are unlikely to interfere with the state's plans because Rhode Island is in the process of creating a Special Area Management Plan, or SAMP, for ocean waters that extend several miles beyond the coast. If approved, it would contain standards and regulations that apply to any development within the covered area.

The SAMP project is being carried out by the Coastal Resources Management Council, the state agency that regulates coastal development, along with data provided by URI.

Grover Fugate, executive director of the CRMC, said his agency has been working closely with the Minerals Management Service and the Army Corps of Engineers "to make sure there isn't a conflict."

He said one issue that has already come up relates to the situation that part of the state -- Block Island -- is located 13 miles offshore. Since the state has jurisdiction over water three miles off its shores, there is a band of ocean that is under federal jurisdiction between Block Island and the mainland.

Because of that band, a project in state waters near Block Island would include a cable to the mainland that would run partly through federal waters. Fugate said it appears that the proposed rules would allow for that cable corridor through federal waters without having to obtain a federal permit.

He said that because Rhode Island has a federally approved coastal management program, its regulatory authority can trump the federal government's authority in some cases of ocean up to 200 miles from the coast.

"If MMS wanted to lease an area we thought was too valuable, we could, in effect, deny the MMS sale for that area if we felt it was in conflict with the coastal program," Fugate said.

"I think [the proposed federal rules] need to address some state- related issues..."

Originally published by Timothy C Barmann, Journal Staff Writer.

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