Rhode Island puts pause on key part of offshore wind project. Here's why

PROVIDENCE – State regulators have hit the pause button on permitting for a transmission line that would run up the Sakonnet River from SouthCoast Wind's large offshore wind farm proposed in ocean waters south of Martha’s Vineyard.

The Rhode Island Energy Facility Siting Board voted unanimously on Thursday to stay the application process for the cable that SouthCoast Wind needs to deliver electricity to the mainland grid from its proposed $5-billion project that would power more than a million homes.

What led up to the decision?

The three-member board made the decision in response to the company’s decision to terminate a set of long-term contracts it signed to sell power to Massachusetts utilities. The power purchase agreements were negotiated before inflation and the war in Ukraine pushed up the cost of construction. SouthCoast Wind said it had no choice but to walk away from the deals because its investors wouldn’t make the profits they were promised under the price for power that was agreed to.

More on offshore wind: SouthCoast Wind wants to walk away from contracts to sell power to Massachusetts. Here's why.

But such agreements are essential to finance offshore wind projects because they lock in revenues for decades to come. Even though SouthCoast Wind is planning to rebid the contracts in a coming offshore wind solicitation announced in Massachusetts, there’s no guarantee the joint venture between Shell and Ocean Winds will be selected again over competing projects. And without any agreements, the 147-turbine wind farm won’t get built.

That raised a big question in the eyes of the siting board, which only has jurisdiction over the transmission cable that would travel up the Sakonnet, cross Common Fence Point in Portsmouth and connect to a substation at the site of the former Brayton Point Power Station in Somerset.

Under state law, the board can only approve an energy facility if the applicant demonstrates a need for the project. As long as SouthCoast Wind had power purchase contracts in place, it could argue that its wind farm was viable and the electric cable was needed to deliver energy. But without the contracts, it’s a different scenario.

“If there is no wind farm financed and constructed, there is no need for the transmission facility,” board chair Ron Gerwatowski said. “An incontrovertible fact that has been conceded by SouthCoast Wind.”

Gerwatowski was not passing judgment on whether there’s a need for offshore wind in general or even SouthCoast Wind’s particular wind farm, only whether at this point the company can demonstrate a need for the cable.

'We really shouldn't be looking at a hypothetical case'

The issue is a practical one. Siting board proceedings are generally lengthy, taking up a lot of staff time at the state Public Utilities Commission, the Division of Public Utilities and Carriers and other agencies. Gerwatowski, who also chairs the PUC, argued – and the other board members agreed – that it’s premature to do the work necessary to assess the project until SouthCoast Wind wins new contracts.

“We really shouldn’t be looking at a hypothetical case,” said Meredith Brady, associate director of the state Division of Planning. “And this is, at this point, hypothetical until you have that power purchase [agreement], at least the bid award.”

The board decided to stay its proceedings until Oct. 1, 2024, to give SouthCoast Wind time to secure new power purchase agreements. If the company is chosen again in the Massachusetts procurement, the permitting process would restart.

SouthCoast Wind CEO Francis Slingsby said he was disappointed in the decision but expressed confidence in the company’s proposal.

“While this one aspect of permitting is temporarily on hold, we continue to advance our permitting with federal, Rhode Island and Massachusetts state and local bodies,” he said in a statement.

More: SouthCoast Wind denies allegations from state engineer about lying to regulators

On a side issue, before the board’s vote, Gerwatowski addressed the controversy caused by an email from an engineer with the state Coastal Resources Management Council who accused SouthCoast Wind of lying to the board about a permit application before the council.

While SouthCoast Wind had told the board that the application for what’s known as a Category B assent for its transmission cable was under review by the council, the application had in fact been deemed incomplete.

“When they said the CRMC was currently reviewing the filing, that left out an important piece of information about the status of the application,” said Gerwatowski, who added that his opinion on the matter didn’t impact the decision on the stay.

This article originally appeared on The Providence Journal: SouthCoast Wind's Sakonnet River transmission cable on pause in RI