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Rhode Island Governor Carcieri Names Deepwater Wind As Developer for Rhode Island’s Off-Shore Wind Farm

September 25, 2008

Governor Donald L. Carcieri today announced that Deepwater Wind was chosen as the successful developer to construct a wind energy project off the shores of Rhode Island that will provide 1.3 million megawatt hours per year of renewable energy – 15 percent of all electricity used in the state. It is expected that the project will cost in excess of $1 billion to construct – all from private investment sources. A team of experts assembled by Governor Carcieri spent several months evaluating the detailed proposals submitted by seven development groups.

Deepwater Wind was established to develop utility-scale offshore wind projects in the northeastern part of the United States. The company’s major investors are FirstWind, a major developer of on-shore wind projects in the United States, D.E. Shaw & Co., a capital investment firm with deep experience in the energy sector, and Ospraie Management, a leading asset management firm with a focus on alternative energy markets.

“Today marks a major step to bring wind power to Rhode Island and to reach our goal of at least 15 percent of all electricity in the state be renewable energy,” said Governor Donald L. Carcieri. “Of the many forms of renewable energy alternatives available, wind is the proven leader. Wind power is clean, green power that is not subject to variations and increases in fuel price. Rhode Island is uniquely positioned to lead the nation with the development of this country’s first off shore wind farm.”

“This is much more than an energy project. This is about creating a new industry in Rhode Island; an industry that puts Rhode Island at the epicenter of the emerging alternative energy market. Deepwater Wind will help bring new economic activity, jobs and opportunity to Rhode Island. From construction through operation, Deepwater Wind projects will provide high-quality, green collar jobs. Further, Deepwater Wind’s jacket foundations are the ideal cost-effective solution for the deeper waters in our region,” continued Carcieri.

“Deepwater Wind is excited to partner with the State of Rhode Island at the cutting-edge of the drive towards energy independence for our nation,” said Deepwater Wind CEO Chris Brown. “Off-shore wind power is a critical piece of the national energy solution. We can reduce carbon emissions, stabilize energy prices, and create good jobs right here in the Ocean State. We can make Rhode Island a center of the emerging green collar industry in the northeast by making it the manufacturing hub for offshore wind projects. It is very exciting that a state with a rich maritime history will once again look to the ocean as a source of industrial development.”

Deepwater Wind has pledged a significant private investment in Rhode Island of approximately $1.5 billion with the construction of a regional manufacturing facility in Quonset, and creating up to 800 direct jobs, with annual wages of $60 million. The Quonset facility will manufacture support structures upon which the turbine and its tower are based and will serve the entire northeast.

“Our vision is to develop multiple utility-scale wind farms in deep water in the northeast. Quonset will be the base of those manufacturing operations,” added Brown.

The exact location of the wind project will be determined from the results of the Special Area Management Plan (SAMP) permitting process led by the Rhode Island Coastal Resources Management Council in partnership with URI’s Graduate School of Oceanography.

“When the Governor started us down this path two years ago, we had expectations that we could find a partner who would provide us with a clean source of energy that would be competitive with the electric market and help stabilize electric prices for Rhode Island consumers long into the future. This RFP process has shown us that this can be a reality. The frosting on the cake is that Deepwater has committed to help us start a new industry here as well,” commented Andrew Dzykewicz, Commissioner of the Office of Energy Resources.

“Deepwater offers us a compelling and credible vision to help Rhode Island develop one of the country’s first off shore wind farms. Beyond accelerating our state’s move toward energy independence, Deepwater’s plan will also strengthen Rhode Island’s economy by creating more than 800 new jobs at Quonset,” said Saul Kaplan, executive director of the Rhode Island Economic Development Corporation and member of the selection team responsible for making the wind farm award. “We will also partner with Deepwater to attract a wind turbine manufacturer and additional high wage manufacturing jobs to the state. By establishing ourselves as an early leader in off shore wind energy production, Rhode Island gains an important competitive advantage in attracting alternative energy companies to the state and in creating new high wage, green energy jobs across Rhode Island.”

The state and Deepwater Wind will now enter a 90-day period to negotiate a formal development agreement. The final agreement will include the total commitment to Rhode Island made by Deepwater Wind, including the establishment of a manufacturing headquarters in the State and the reimbursement of the cost of the SAMP to the Renewable Energy Fund. In addition, the agreement will outline the preferred developer status for Deepwater Wind in the permitting process.

Final approval of the project is contingent on multiple regulatory approvals from both the state and federal governments.

Seven bids were received by the Wind Energy Proposal Evaluation Team. Bids were evaluated on the basis of total cost to Rhode Island ratepayers, the qualification and experience of the bidder in constructing wind projects, and the number of jobs and the amount of tax dollars to be created. The Evaluation Team was assisted by independent consultants in the area of energy economics and engineering technology, including the National Renewable Energy Laboratory.

The State’s Path Towards 20 Percent Renewable Energy

In 2006, Governor Carcieri announced an ambitious plan to increase the use of renewable sources of energy to generate 20 percent of the state’s electricity needs. It was expected that approximately 15 percent would be derived from wind energy.

In June 2007, the Rhode Island Office of Energy Resources received the results of a report it had commissioned to determine the best locations for the development of wind energy projects. The report ranked ten sites according to the amount and cost of producible energy, whether or not the sites were in federal or state waters, and the visibility of the projects from shore. Factors highlighted in the report would guide the selection of sites. Most importantly, the report projected that 15 percent of Rhode Island’s average energy demand at a competitive cost could be achieved by establishing a wind farm using areas identified as J and K in the study.

Last fall, an extensive stakeholder process was organized to evaluate the study. Participants in the four stakeholder meetings included city and town representatives, environmental organizations, local economic development organizations, commercial and recreational fishing interests, state government agencies, the U.S. Coast Guard, area university representatives, National Grid officials, and consultants to the RI Office of Energy Resources.

In April, the State issued a formal RFP seeking bids from private companies to construct and operate an off-shore wind farm. In June, Governor Carcieri announced the team of individuals responsible for selecting the contractor to develop and construct a wind energy project off the shores of Rhode Island.

The Wind Energy Proposal Evaluation Team included several state energy and economic development officials, as well as the Dean of the URI Graduate School of Oceanography, Dr. David Farmer. Seven bids were received.

In July 2008, the Rhode Island Renewable Energy Fund Board of Trustees approved funding for the development of a SAMP covering Rhode Island’s offshore waters, executed by a joint partnership between the Coastal Resources Management Council (CRMC) and the University of Rhode Island (URI). URI will provide data to the CRMC, who will execute the regulatory framework of the SAMP.

Under the federal Coastal Zone Management Act, preparation of a SAMP enables permitting of projects within the area covered by the SAMP to proceed on the basis of an Environmental Assessment in lieu of an Environmental Impact Statement. The SAMP process is expected to be completed in two years.

Most recently, Governor Carcieri urged the Public Utilities Commission to mandate that National Grid enter into long-term energy contracts with renewable energy generators for the Company’s standard offer supply. The PUC has such authority under Title 39, which gives the Commission broad powers to guarantee that ratepayers’ costs are minimized.

“By moving forward with an expedited process, Rhode Island is setting the stage to be leader for the emerging renewable energy industry in the Northeast,” continued Governor Carcieri.

About First Wind

First Wind, based in Newton, Massachusetts, is a leading developer of onshore wind projects in the United States. First Wind’s portfolio of wind energy projects includes 5,507 MW of capacity of which 92 MW were operating and 182 MW were under construction. Their projects now in operation include projects done in cooperation with government regulators and the community in environmentally sensitive areas of Hawaii, New York, and Maine. For more information, visit www.firstwind.com.

About D.E. Shaw & Co.

D.E. Shaw, based in New York, New York, is a global investment and technology development firm with more than 1,300 employees; approximately $39 billion in aggregate investment capital; and offices in North America, Europe and Asia. Since its organization in 1988, D.E. Shaw has earned an international reputation for financial innovation, technological leadership and an extraordinarily distinguished staff. D.E. Shaw has a successful history of investing and growing companies in the energy sector and is a national leader in investing in alternative energies.




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