U.S. and Rhode Island officials recently celebrated the start of construction on the Block Island Wind Farm, which is on track to be the first commercial offshore wind farm in the U.S. The five-turbine, 30-megawatt project under development by Deepwater Wind is scheduled to come online in 2016; turbine foundation construction and other "steel in the water" activities are underway. As a pioneer in U.S. offshore wind development, the Block Island project has survived years of permitting uncertainty and repeated legal challenges by project opponents. But another such lawsuit was filed this week in federal court. What does the future hold for the Block Island Wind Farm?
Project developer Deepwater Wind is owned principally by an entity of the D.E. Shaw group. Its Block Island project is currently under construction in Rhode Island state waters about three
nautical miles southeast of Block Island. The project will feed power directly to consumers on Block Island, but also includes a 25-mile bi-directional submerged transmission cable between Block Island and the mainland. The project's finances rest in part on a power purchase agreement through which Deepwater Wind will sell power to
utility National Grid.
That power purchase agreement, or PPA, has been the subject of several legal challenges. Those challenges often cite the deal's cost: pricing for the Block Island power starts as high as 24.4 cents per kilowatt-hour, and escalates 3.5 percent annually. These prices are more than double the typical Rhode Island energy price, for an estimated $497 million in above-market costs over the 20-year deal.
In 2009 and early 2010, the Rhode Island Public Utilities Commission rejected proposals by Deepwater Wind and National Grid, largely over cost. The parties then returned with a revised proposal. In 2010, TransCanada Power Marketing Ltd. unsuccessfully argued that the Rhode Island commission shouldn't consider that proposal due to constitutional infirmities in the Rhode Island law favoring renewable power contracts with in-state projects. On August 16, 2010, the Commission issued its order approving the PPA. After that order was appealed to the state Supreme Court, the Supreme Court issued a written opinion upholding the Commission's Order on July 1, 2011. In 2012 and in 2015, project opponents petitioned the Federal Energy Regulatory Commission to invalidate the Rhode Island commission's action, which FERC declined to do. Through all this, the project moved forward and ultimately began local construction earlier this year.
But the project is not yet completely out of stormy seas. On August 14, 2015, plaintiffs with a history of engagement in some of these earlier challenges filed a lawsuit in U.S. District Court in Rhode Island. As in previous challenges, this complaint argues that the Rhode Island Public Utilities Commission violated federal laws in approving the Block Island deal because only the Federal Energy Regulatory Commission may regulate wholesale electricity sales. While it is possible that this case could be swiftly dismissed, if it lingers it could add uncertainty to the project until its resolution. Last year a federal court invalidated a FERC ruling on the grounds that it impermissibly tread on state rights to set retail electricity rates. That case, Electric Power Supply Association v. Federal Energy Regulatory Commission, has been appealed to the U.S. Supreme Court.
With construction underway, the Block Island project now has significant inertia behind it. What impact will the recently filed lawsuit have? Will it affect Deepwater Wind's position as "first in the water" in the race for U.S. commercial offshore wind development?
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label lawsuit. Show all posts
Showing posts with label lawsuit. Show all posts
Feds pay damages in Yankee Atomic Power lawsuit
Wednesday, February 6, 2013
The Portland Press Herald reports that the federal government has partially paid damages awarded under a lawsuit filed by the owners of three former nuclear power plants for about $160 million in damages. While final regulatory approvals remain pending, the companies plan to use the award to benefit ratepayers.
The nuclear plants -- Maine Yankee, Connecticut Yankee, and Yankee Rowe -- closed in the 1990s. Federal law requires the federal government to develop a plan for long-term storage and disposal of radioactive waste. While waste removal was supposed to start in 1998, the federal government has yet to designate a permanent waste repository or to remove the spent fuel. As a result, the radioactive waste is stored in concrete casks at the sites of the former plants, at the plant owners' expense. For Maine Yankee, those storage and maintenance costs range from $7 million to $11 million annually, with similar expenses for the other two plants.
The plant owners filed a lawsuit against the federal government in 1998, seeking damages for the cost of maintaining the spent fuel onsite. After a series of awards and appeals, a 2012 U.S. Court of Appeals decision upheld the award of $39,667,243 to Connecticut Yankee and $81,690,866 to Maine Yankee, and increased Yankee Atomic's damages award from $21,246,912.55 to $38,268,654.55.
These amount have reportedly now been paid, and the power companies are proposing how they will use the proceeds to benefit ratepayers. Meanwhile, because the U.S. Court of Claims ruled that utility companies cannot receive damage awards for storage costs that have not yet been incurred, the Yankee Companies have filed a second round of damages claims for approximately $247 million, and anticipate filing a third round of damage claims before the end of 2013.
From 1972 until permanent shutdown in 1997, Maine Yankee operated a 900 megawatt pressurized water reactor in Wiscasset, Maine. During its operations, Maine Yankee was the largest generating station in Maine. The plant closed after its owners received a report by the Nuclear Regulatory Commission staff identifying safety problems that were deemed too costly to fix. Even after closure, the unexpected costs of storing the spent fuel onsite only worsened the plants' economics. The lawsuit judgment is designed to compensate the plant owners for these costs, although the litigation itself carries a price tag for both the companies and the U.S. taxpayer.
What role will nuclear power play in our energy mix in the coming years? For now, no federal waste repository is planned. Safety is paramount, particularly following the 2011 Fukushima disaster in Japan. Nuclear power plants can produce cost-effective baseload electricity, but face the risk of surprise costs such as those faced by Maine Yankee. Can a holistic legal and business solution enable the safe operation of nuclear power plants?
The nuclear plants -- Maine Yankee, Connecticut Yankee, and Yankee Rowe -- closed in the 1990s. Federal law requires the federal government to develop a plan for long-term storage and disposal of radioactive waste. While waste removal was supposed to start in 1998, the federal government has yet to designate a permanent waste repository or to remove the spent fuel. As a result, the radioactive waste is stored in concrete casks at the sites of the former plants, at the plant owners' expense. For Maine Yankee, those storage and maintenance costs range from $7 million to $11 million annually, with similar expenses for the other two plants.
The plant owners filed a lawsuit against the federal government in 1998, seeking damages for the cost of maintaining the spent fuel onsite. After a series of awards and appeals, a 2012 U.S. Court of Appeals decision upheld the award of $39,667,243 to Connecticut Yankee and $81,690,866 to Maine Yankee, and increased Yankee Atomic's damages award from $21,246,912.55 to $38,268,654.55.
These amount have reportedly now been paid, and the power companies are proposing how they will use the proceeds to benefit ratepayers. Meanwhile, because the U.S. Court of Claims ruled that utility companies cannot receive damage awards for storage costs that have not yet been incurred, the Yankee Companies have filed a second round of damages claims for approximately $247 million, and anticipate filing a third round of damage claims before the end of 2013.
From 1972 until permanent shutdown in 1997, Maine Yankee operated a 900 megawatt pressurized water reactor in Wiscasset, Maine. During its operations, Maine Yankee was the largest generating station in Maine. The plant closed after its owners received a report by the Nuclear Regulatory Commission staff identifying safety problems that were deemed too costly to fix. Even after closure, the unexpected costs of storing the spent fuel onsite only worsened the plants' economics. The lawsuit judgment is designed to compensate the plant owners for these costs, although the litigation itself carries a price tag for both the companies and the U.S. taxpayer.
What role will nuclear power play in our energy mix in the coming years? For now, no federal waste repository is planned. Safety is paramount, particularly following the 2011 Fukushima disaster in Japan. Nuclear power plants can produce cost-effective baseload electricity, but face the risk of surprise costs such as those faced by Maine Yankee. Can a holistic legal and business solution enable the safe operation of nuclear power plants?
July 19, 2010 - life on a Maine island
Monday, July 19, 2010
I've just returned from a visit to one of Maine's offshore islands. Life on a small island can seem fundamentally different: the pace of life is driven by the tides and boat schedules, and fog can often replace the mainland's heat. It was a good place to think about energy policy, and history, and where we can go from here.
More updates to follow regularly.
Brief news recap:
Friends of Merrymeeting Bay (FOMB) have provided 60-day notice of intent to sue the owners of four Maine dams under the Clean Water Act over issues relating to Atlantic salmon. FOMB have a history of legal activism over fish (including eel) passage at dams in Maine, particularly in the Merrymeeting Bay watershed. If you've read my earlier posts about kayaking in Merrymeeting Bay, you might know that Merrymeeting Bay is where the Androscoggin River flows into the Kennebec. FOMB has identified four dams in its threat: the Lockwood Dam in Waterville, "Hydro Kennebec" in Winslow, Shawmut Dam in Fairfield and Weston Dam in Skowhegan.
More updates to follow regularly.
Brief news recap:
Friends of Merrymeeting Bay (FOMB) have provided 60-day notice of intent to sue the owners of four Maine dams under the Clean Water Act over issues relating to Atlantic salmon. FOMB have a history of legal activism over fish (including eel) passage at dams in Maine, particularly in the Merrymeeting Bay watershed. If you've read my earlier posts about kayaking in Merrymeeting Bay, you might know that Merrymeeting Bay is where the Androscoggin River flows into the Kennebec. FOMB has identified four dams in its threat: the Lockwood Dam in Waterville, "Hydro Kennebec" in Winslow, Shawmut Dam in Fairfield and Weston Dam in Skowhegan.
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