And we're back!

Dear Friends and Colleagues,

You may have noticed that things have been very quiet for the last month here at the Ocean and Offshore Energy Projects and Policy Blog—and it isn’t for lack of developments in the offshore renewable energy world.

I have recently relocated from Philadelphia to join Nixon Peabody LLP’s Environmental and Energy Practice Group in the firm’s Boston office. Among the many reasons that factored into my decision is Nixon Peabody’s unparalleled expertise with the legal issues that impact ocean-based renewable energy projects and the firm’s commitment to and enthusiasm for working with developers and other interested entities who want to see the United States’ offshore renewable energy industry flourish.

Nixon Peabody has one of the broadest energy practices in the country and has served the needs of energy industry clients for more than 100 years. Our energy practice includes a wide variety of renewable energy clients including developers of wind, solar, biomass and other renewable
technologies.

With regard to marine-based renewable energy projects, Nixon Peabody’s attorneys have:

• Assisted developers to prepare Responses to Requests for Proposals and Requests for Information with regard to potential offshore wind installations in the Northeast, Mid-Atlantic, and Great Lakes regions;


• Assisted developers to negotiate leases to install met towers in both state and federal waters;


• Assisted a developer to secure a Memorandum of Understanding for a Power Sales Agreement;


• Provided clients with advice and analysis regarding the permitting requirements involved in both offshore generation and transmission plans;


• Advised clients with regard to structuring a practicable financing plan for developments;
  Assisted clients through all stages of submarine electric transmission project development and financing, including state and federal siting and permitting issues, commercial agreements such as supply chain and construction contracts, federal market-based and incentive rate proceedings, transmission capacity purchase and sale agreements, and financial structuring; and


• Advised and assisted clients to comply with various legislative and regulatory schemes including those governed by BOEMRE, the United States Army Corps of Engineers, NOAA, and various other local, state, and federal authorities.

The energy practice has 5 attorneys listed in Chambers USA America’s Leading Lawyers for Business (2011), and supported by additional teams of lawyers in such areas as intellectual property, creditor’s rights and workouts, and litigation and arbitration.

Nixon Peabody attorneys are frequent speakers at conferences presented by national industry trade groups such as SEIA, AWEA, and ACORE. The firm is also an active member of these groups. Many of our attorneys also speak at conferences presented by commercial sponsors such as Infocast, EUCI, Euromoney, Platt’s, and LSI.

I am extremely honored and excited to join the team here at Nixon Peabody LLP and hope that you will feel free to contact me at my new professional home.

Thanks for being patient during this transitional period. Keep an eye out for my next post where I will resume my usual analysis of timely events in offshore renewable energy development and policy!

Best,
Jennifer Simon Lento, Esq.
Nixon Peabody LLP
100 Summer St.
Boston, MA 02110
jsimonlento@nixonpeabody.com
617-342-1352
http://www.blogger.com/www.nixonpeabody.com

Offshore Wind State Update: Mid-Atlantic Edition (New Jersey, Maryland, Virginia, North Carolina)

New Jersey

Offshore Wind Renewable Energy Credit Program:

On Monday May 16, 2010, the New Jersey Board of Public Utilities announced and confirmed that they have begun accepting applications for offshore wind projects in state waters. Applications must be received by or before June 14, 2011.

Under the recently adopted Offshore Renewable Energy Credit regulations, applications will enter a six-month review process after they have been received and deemed administratively complete.

Fishermen's Energy:

Fishermen's Energy, the developer spearheading an effort to build a windfarm in New Jersey state waters off of Cape May, NJ, has announced that the New Jersey Department of Environmental Protection (NJDEP) has issued the major environmental permits to build its demonstration-scale six turbine Fishermen's Atlantic City Windfarm to be located in New Jersey State waters off the coast of Atlantic City.

In a May 6, 2011 press release, Fishermen’s Energy announced that they have now received approval from the New Jersey State House Commission for a Green Acres permit and the Tidelands Council for an electric line easement and turbine locations license required to build its demonstration-scale six turbine Fishermen's Atlantic City Windfarm. These were the remaining State permits required for the project to
commence construction.

This wind energy project will be located in New Jersey State waters off the coast of Atlantic City. Fishermen’s Energy also announced the completion of a year of pre-construction avian and marine mammal monitoring, keeping the project on target for a Fall 2012 commissioning.

Earlier this spring, NJ DEP issued the project's CAFRA Individual Permit, Waterfront Development Permit and Water Quality Certificate after technical, legal, and staff review of the project application and after a public notice and comment period which garnered only positive support from a variety of stakeholders.

Maryland

Despite strong support from Maryland's Governor O'Malley, the Maryland legislature has decided to shelve proposed legislation which would have required state utilities to enter into power purchase agreements with offshore wind generation facilities to be developed off of Maryland's coastline.

Supporters of the legislation, entitled the Maryland Offshore Wind Energy Act, hope to reintroduce the proposed law again early next year.

Virginia

On May 10, 2011, the Associated Press reported that Virginia Utility Dominion Power announced that it will not include offshore wind as part of its generation portfolio until that offshore wind power becomes cost-competitive with traditional forms of generation. Dominion issued this statement in response to the launch of VA4Wind, a consortium of environmental and green economy offshore wind energy advocates.

“The costs must become competitive with other conventional or renewable forms of generation for the technology to be chosen,” Jim Norvelle, a Dominion spokesman, wrote in an e-mail to the Associated Press. “Dominion continues to pursue cost reduction options and would put plans in place to build when it is cost effective to do so.”

North Carolina

On April 19, 2011, Republican State Sen. Fletcher Hartsell filed a bill in the North Carolina legislature entitled An Act to Encourage the Development of the State's Offshore Wind Energy Resources and to Attract Jobs and Economic Development. The bill was filed just short of the deadline for bills that can be considered during the current legislative session.

The Hartsell bill, which follows (but does not replicate) both New Jersey's 2010 Offshore Wind Economic Development Act and the now-shelved Maryland Offshore Wind Energy Act, requires the North Carolina Utilities Commission to issue regulations mandating that state utilities enter into power purchase agreements for up to 2,500 megawatts of offshore wind energy. The legislation stipulates that the offshore wind generation facilities would be built over a period of seven to ten years, and requires the first project to begin producing power by Dec. 31, 2017. The legislation also sets the goal of building 5,000 megawatts of offshore nameplate capacity by 2030.

The regulations issued by the State Utilities Commission pursuant to the bill set forth a series of aggressive deadlines in order to meet the 2017 project completion date:

January 1, 2012: The Commission must issue a request for proposals soliciting bids from offshore wind project developers.

April 30, 2012: Responses to the RFP from potential project developers are due.

October 31, 2012: The Commission must review the Responses and award bids.

Offshore Wind: An Argument for Aesthetics

Many of those opposed to offshore wind power have argued that offshore wind turbines are an aesthetic blight. Typically, my response to that position has been, "Ok, but have you ever seen a coal fired power plant?" With the understanding that aesthetics are somewhat subjective, I think we can all agree that this:



is not as ugly as this:



In the spirit of wind-favorable aesthetic comparisons, a California-based non-profit organization which advocates for electric vehicles recently issued the following public service announcement. This may be the first domestic video advertisement in support of offshore wind:

Ocean & Offshore Energy Projects and Policy Blog is one of LexisNexis' Top 50 Blogs for 2011!

Dear Offshore Energy Blog Readers, Colleagues and Friends:

Thanks to your support and readership, the LexisNexis Environmental Law & Climate Change Community has selected this blog as one of the top 50 blogs of 2011.

I look forward to continuing to publish timely analysis of cutting edge developments in ocean energy project development, regulation, and policy making in 2011 and beyond.


Best,
Jennifer Simon Lento, Esq.

Secretary Salazar Announces Approval of Cape Wind's Construction and Operations Plan!

At 10:30am on April 19, 2011, Department of the Interior Secretary Ken Salazar announced that Cape Wind's Construction and Operations plan has been approved. Secretary Salazar made the announcement at the Charlestown Navy Yard in Boston and was accompanied by Jim Gordon, the President and CEO of Cape Wind, LLC and Massachussetts governmental representatives.

The Department of the Interior posted the following >press release at the DOI website:

WASHINGTON, DC – Secretary of the Interior Ken Salazar today announced that the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has approved a Construction and Operations Plan (COP) submitted for the Cape Wind Energy Project, which is required before construction may begin on the generation facility planned in Nantucket Sound. The timeframe reported in the COP submitted by Cape Wind Associates suggests that construction of the nation’s first offshore wind farm could begin as early as the fall.

“The Department has taken extraordinary steps to fully evaluate Cape Wind’s potential impacts on environmental and cultural resources of Nantucket Sound,” said Secretary Salazar. “By signing the Construction and Operations Plan today, we are even closer towards ushering in our Nation’s first offshore wind energy facility while creating jobs.”

“After a thorough review of environmental impacts, we are confident that this offshore commercial wind project – the first in the nation – can move forward. This will accelerate interest in the renewable energy sector generally and the offshore wind sector specifically, and spur innovation and investment in our nation’s energy infrastructure,” said BOEMRE Director Michael R. Bromwich.

"With today's announcement by Secretary Salazar, we are one step closer to benefiting from the clean energy, green jobs and long-term economic benefits that will result from creating the nation's first offshore wind farm," said Governor Deval Patrick. "States up and down the East Coast are now looking to Massachusetts with envy as we launch this brand new American industry." ?

The proposed action, including its size and location, remain substantially the same as analyzed in the Cape Wind Final Environmental Impact Statement (FEIS) that was published in January 2009. The Cape Wind energy project calls for 130 3.6± megawatt wind turbine generators, each with a maximum blade height of 440 feet, to be arranged in a grid pattern on the OCS in Nantucket Sound, offshore Cape Cod, Martha’s Vineyard, and Nantucket Island.


As part of its evaluation of the COP, the bureau conducted an Environmental Assessment (EA) under the National Environmental Policy Act (NEPA) to determine whether there were any significant impacts that had not been discussed in the 2009 FEIS or other environmental assessments, and concluded that all impacts had been properly examined. BOEMRE also issued a Record of Decision for the COP approval, which details the terms and conditions that Cape Wind Associates will need to follow these terms and conditions are in addition to those established in the lease agreement.

A notice about the preparation of an EA was posted on the BOEMRE website in February which initiated a comment period and provided an opportunity for public input. BOEMRE received and considered approximately 160 comments during the comment period. Issues considered in the EA include: additional surveys and sampling, conflicts with aviation traffic and fishing use, emergency response, migratory birds, microclimate, oil within wind turbine generators, permits issued by other federal agencies and consultations with other agencies.

For more information about the Cape Wind energy project, including the COP, previous environmental reviews, Record of Decision, lease and related documents, please visit: http://www.boemre.gov/offshore/RenewableEnergy/CapeWind.htm.

Offshore Wind State Update: New England Edition (Maine, Massachusetts and Rhode Island)

The States have been busy this year. Maine has been focusing on developing new technologies. Massachusetts and the Cape Wind project have finally (fingers crossed here!) overcome the worst of the legal obstacles but now must find solutions to financial challenges. Rhode Island's Deepwater Wind Block Island project is still ensnared in legal challenges related to financing issues. See the below for more detailed updates.

MAINE

WindFloat Maine LLC of Camden, a subsidiary of Principle Power Inc., and a member of the DeepCwind Consortium at the University of Maine's Advanced Structures and Composites Center, received a grant of $500,000 from the Maine Technology Institute. The money will be used towards the development of a floating wind turbine platform design, also called Windfloat. WindFloat Maine also brought in a $500,000 matching investment.

The significance of viable floating wind turbine technology should not be underestimated. The turbines that are presently installed at offshore wind farms must be secured to the ocean floor via monopile or gravity offset mechanisms. For this reason, all currently installed offshore windfarms worldwide are installed in waters that are <30 meters. Although new advances in marine turbine technology has made it practicable to install turbines off the eastern seaboard of the United States at depths of up to approximately 40-50 meters.

However, the western seaboard of the United States has significantly steeper ocean bathymetry-- that is, the ocean floor drops off precipitously relatively close to shore. This makes the western seaboard a poor candidate location for offshore windfarms regardless of the available wind resources (and Pacific coastal wind resources are not insignificant). See, e.g., NREL Offshore Wind Resource Map for Washington State. However, proposed floating turbine technology would allow offshore windfarms to be constructed at depths of 40-900 meters, thus effectively opening up the Pacific coast of the United States.

Massachussetts

Cape Wind may begin construction as early as this year. However, Cape Wind Associates, LLC, the developer of the 130-turbine 420MW project, may be in trouble if it cannot obtain sufficient financial backing.

At present, half of the power generated from Cape Wind will be sold to National Grid PLC subject to a 15-year power purchase agreement. Cape Wind has not been able to secure a power purchase agreement for the remaining name plate capacity. The guarantee of a back-end revenue stream yielded through a power purchase agreement provides lenders with the assurance and comfort that loans for front-end costs (like construction) will be repaid. Therefore, Cape Wind's inability to secure a PPA for the entirety of its production does not bode well.

The first phase of construction will cost approximately $1.7 billion. Cape Wind now hopes to find a "strategic partner" that would invest a significant portion of the estimated $500 million of equity needed before debt financing can be launched to round out the complete financing package.

Rhode Island

On Wednesday April 6, the Rhode Island Supreme Court heard oral arguments in a case wherein the Rhode Island Attorney General along with a variety of intervenors (most vocally, the Conservation Law Foundation (“CLF”), Toray Plastics (“TP”) and Polytop Corp.(“PTC”)) have challenged the legality of an amended power purchase agreement between National Grid and Deepwater Wind (In re: Review of Amended Power Purchase Agreement between Narragansett Electric Company d/b/a National Grid and Deepwater Wind Block Island, LLC pursuant to R.I. Gen.Laws § 39-26.1-7, Docket No. 4185). The power purchase agreement governs National Grid’s purchase of certain quantities of power generated by a proposed 8-turbine offshore wind farm planned to be located off of Block Island in the jurisdictional waters of Rhode Island.

The court's decision is expected within 60 days. If the Supreme Court finds the intervenors’ arguments convincing, it will likely mean that Deepwater Wind’s Block Island wind farm will not get built.

The history of the case is somewhat confusing. Back in December 2009, the Rhode Island Public Utilities Commission received for its review a power purchase agreement between National Grid and Deepwater Wind. This PPA was subject to Rhode Island Gen. Laws § 39-26.1-1 to 8. The relevant provision of the law required National Grid to “solicit proposals for one newly developed renewable energy resources project of ten (10) megawatts or less that includes a proposal to enhance the electric reliability and environmental quality of the Town of Shoreham.” See R.I. Gen. Laws §39-26.1-7(a). Once National grid had identified the project, National Grid was to enter into negotiations with the selected project developer with the goal of “achieving a commercially reasonable contract.” R.I. Gen. Laws §39-26.1-7(b).

During the course of the R.I. PUC’s review of the December 2009 PPA, a variety of intervenors, including CLF, TP and PTC, entered submissions arguing that the December 2009 PPA was not “commercially reasonable.” See R.I. PUC Docket No. 4111. On that basis, the R.I. PUC concluded that the 2009 PPA did not comply with the requirements of R.I. Gen. Laws §39-26.1-7(b), and refused to approve it. See R.I. PUC Opinion.

On April 28, 2010, the Rhode Island legislature adopted revised legislation that significantly altered the Rhode Island Gen. Laws § 39-26.1-1 to 8. See revised legislation here. Most notably, the new legislation (a) specifically authorized National Grid to enter into a PPA for an 8-turbine offshore wind project; (b) changed the criteria under which the R.I. PUC was to review that PPA; (c) and provided explicitly for the same intervenors whom had challenged the original PPA to challenge the amended PPA again within the scope of a streamlined process.

Subsequently, National Grid and Deepwater Wind resubmitted their PPA to the Rhode Island PUC. The intervenors, not surprisingly, again the challenged the PPA. However, instead of challenging the PPA exclusively, the intervenors now also argue that the new legislation is itself illegal.

For a summary of the parties’ arguments, see the Providence Journal.

Japan and the Resilience of Wind Power

Although this blog focuses on the United States Offshore Wind industry, things occasionally happen outside of the United States that warrant coverage here. For those of us watching from the safety of the Western Hemisphere, the horrific destruction caused by the earthquakes and tsunami in Japan is simply incomprehensible. And, as if the physical impact of the earthquakes and tsunami weren`t enough, the crisis at the Fukushima Nuclear Plant appears to be getting worse by the hour, and news sources are now reporting that radiation leaks may be severe enough to impact human health and welfare.

According to the World Nuclear Association, Japan's nuclear power plants provide approximately 30% of consumed electricity in Japan. At least 25% of Japan's 55 nuclear reactors have been shut down since the earthquake and tsunami on March 11, 2011.

As Japan begins the long road of "rebuilding the country from scratch", it is important to highlight the infrastructure that survived the catastrophes.

Amazingly, Yoshinori Ueda, leader of the International Committee of the Japan Wind Power Association & Japan Wind Energy Association has reported that there has been no damage reported at any of Japan's member wind generation plants-- including the Kamisu semi-offshore wind farm. The Kamisu wind farm, which is located approximately 300km from the epicenter of the quake, was designed to withstand earthquakes-- and the merit of that design should plainly be lauded.

According to the Huffington Post's Kelly Rigg, Mr. Ueda has confirmed that the majority of Japanese wind turbines are fully operational and have been asked to increase output to make up for shortages due to the disaster:

Eurus Energy Japan says that 174.9MW with eight wind farms (64% of their total capacity with 11 wind farms in eastern part of Japan) are in operation now. The residual three wind farms (Kamaishi 42.9MW, Takinekoshirai 46MW, Satomi 10.02MW) are stopped due to the grid failure caused by the earthquake and Tsunami. Satomi is to re-start operations in a few days. Kamaishi is notorious for tsunami disaster, but this wind farm is safe because it is locate in the mountains about 900m high from sea level.

The resilience of wind power in the face of incredible natural forces should not be overlooked.

Should you wish to contribute to organizations that are providing much-needed services and assistance to those who have been impacted by the earthquakes and tsunami in Japan, please consider donating to the following organizations:



The Red Cross



Doctors Without Borders