Another Looming Cost in Deep Water

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One could easily lose track of all of the mounting costs that Rhode Island’s ruling class is piling on our future.

We’ve got such things as the Medicaid expansion, of course, which will soon receive another boost — along with every other welfare program — when the Unified Health Infrastructure Project (UHIP) is fully operational and ensuring that every conceivable recipient is receiving the maximum handout.  We’ve got the state’s pension and other post-employment benefits (OPEB) costs, which will be exploding in the near-to-mid-term future.  In a year or two, there will be tolls on trucks, and we can be sure that they will be followed by tolls on cars.  And all of this comes on top of the increases in taxes, fees, and costly mandates and regulations that slip through the General Assembly into law each and every year.

And then there’s Deepwater Wind, about which Ian Donnis provides a reminder on Rhode Island Public Radio’s site, today.  This part can only lead to shaking heads:

“No one can predict the future,” [Deepwater Wind CEO Jeffrey Grybowski] said. “I know what the cost of the Block Island wind farm will be, because I can predict that going forward. But where the rest of the market is, is completely unknown today — and it’s unpredictable. So those projections of what an over-market cost might be are simply speculation at this point.”

This rationale, from somebody deeply and personally invested in this particular special interest, should be a candidate for the best articulation of Rhode Island government’s wrong-headed approach to economic development.  Hey, whether our investments are good or bad is “simply speculation,” right?  That’s why the people who stand to benefit directly had to get the state government to force everybody else to pay for it.

This is exactly the problem with what some have called “venture socialism.”  Private interests make out one way or another, and the public absorbs all of the risk.  Politicians who supposedly represent you and me shouldn’t be committing us to “speculation.”  Donnis closes the article as follows:

So does this wind power represent a smart investment or a corporate giveaway that will lead to higher bills for electricity? The answer to that question may not be known for many years.

I have yet to see anybody estimate or even describe the upside in concrete terms, but the downside is easy to see, even if we don’t include systematic costs like turning state government into a form of organized crime for theft on a mind boggling scale.



  • Guest

    “No one can predict the future,” [Deepwater Wind CEO Jeffrey
    Grybowski] said. “I know what the cost of the Block Island wind farm will be, because I can predict that going forward. But where the rest of the market is, is completely unknown today — and it’s unpredictable. So those projections of what an over-market cost might be are simply speculation at this point.”

    That statement made by Jeffrey Grybowski; Governor Donald Carcieri’s former Chief of Staff has a hollow ring as global oil and natural gas prices have dropped significantly where the price of electricity sold to National Grid by Deepwater Wind is fixed for next 20 years with built in compounding fixed rate Cost Of Living Adjustment.

    A few things we do know is that Rhode Island will end up with the highest price electric rates in the nation and some of the highest state and municipal tax rates in the nation with businesses, restaurants, gasoline stations, surviving mom and pop stores etc., charging more for goods
    and services due to inflated electric rates and taxes due to those 5 wind
    turbines that ARE NOT directly feeding Block Island electricity. A study
    performed for National Grid on the impact of Deepwater Wind’s electric rate reported that in totality the first year in operation the state of RI and 38
    cites (BI excluded) combined electric costs will rise approximately $250,000 which will be passed on to state population in increased taxes. Each year thereafter the 3.5% COLA will be added to the $250,000. After 20 years the state of RI and 38 cities and towns will be charging $514,857.87 in extra yearly taxes due to Deepwater Wind’s electric rates. This is on top of residential inflated electric rates people will be paying.

    According to the University of Connecticut Law Review; “The final agreed-upon amount was 24.4 cents/kWh, with an escalator clause that would increase this price by 3.5% annually over the twenty-year contract. This
    would culminate in a final price of 46.9 cents/kWh, with an average price of
    34.5 cents/kWh over the lifetime of the PPA.” U.S. Energy Information
    Administration for November 2015 has the current RI residential electric rate at 18.63 cents/kWh.

    Connecticut Law Review: “Second Wind a Legal and Policy Based Evaluation of the Block Island Wind Farm and the Legislation That Saved
    It”: http://connecticutlawreview.org/articles/second-wind-a-legal-and-policy-based-evaluation-of-the-block-island-wind-farm-and-the-legislation-that-saved-it/

  • bobwashburn

    So, if Guest’s comments below are somewhat accurate, then the Carcieri Memorial BI Windmills will send 34 c/kwh electricity the grid to the mainland, while the rest of the average price is 18 cents. Thanks, Don for this “green screwjob”, which coupled with the $100 million 38 Studios fiasco. They cement your RI business credentials.

  • ShannonEntropy

    We should replace The Independent Man atop our State House
    with the BOHICA MAN

    http://rlv.zcache.com/bohica_button-rc7d2ec0ca1aa4f80861b58bfd8cb3877_x7kru_1024.jpg?rlvnet=1

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