BRIAN E.J. MARTIN

April 19, 2010

Since mid-2001, the U.S. energy community has expected that the first American offshore wind farm would be located just off of Massachusetts, in the waters of Cape Cod. However, due to astonishing legal and regulatory delays, Massachusetts still does not have an offshore wind facility. Meanwhile, as reported in the New York Times ("Massachusetts and Rhode Island Compete Over Wind Farm") in April 2010, Rhode Island has developed its own offshore wind farm siting regime, which may prove superior to Massachusetts' permitting and siting regime. Unlike in Massachusetts, where a private developer initiated the permitting process, Rhode Island has decided that it will make the siting and planning decision, then choose a private developer to execute the state's vision. Currently, Massachusetts and Rhode Island appear to be at the head of the pack in offshore wind farm siting.

Nationally, the wind energy industry boomed last year, increasing generation by 39% over 2008. To east coast states, wind energy is enticing because of its clean, non-carbon emitting nature, the security interest in energy independence, and the economic potential of this emerging technology (i.e. new "green" jobs and stable electricity prices when oil, coal, and gas markets fluctuate). Specifically, offshore wind farms are attractive, in particular, because the east coast has especially strong winds, because several major demand centers are located in Northeast (such as Boston and New York), which means lower conventional transmission costs, and because nearly every state wants to be the first-mover in a potential $ 270 billion dollar industry. For more than a decade, several European countries have successfully enjoyed offshore wind energy, yet no offshore wind energy exists in the U.S.

Massachusetts was the first state out of the gate, but may not be the first to cross the finish line. In mid-2001, the private development company Energy Management, Inc. (EMI) proposed a wind farm, the Cape Wind Project, in the Nantucket Sound. The enormous, 131-turbine installation would be clearly visible from Cape Cod and its islands, well-known as vacation destinations and, in some spots, as enclaves of the liberal and wealthy. Since then, the project has gained significant popular support, from the Governor, the editorial pages of the New York Times, and even the majority of both state residents and Cape Cod residents. Most environmental advocacy groups favor the project, and as the Conservation Law Foundation put it, "[Cape Wind] is critically important . . . because of the significant amount of clean energy it will supply and because it is a pioneering project that will serve as a beacon for future clean renewable energy development in the region." However, a vocal and not-insignificant coalition of environmental activists, prominent state residents such as Mitt Romney and the Kennedy family, and native American tribes have opposed development by intervening in the permitting and regulatory process. To date, challenges and litigation have stalled the project. A final federal decision is due this month and Cape Wind's developers claim that the earliest they can begin supplying energy is 2012.

Now, Rhode Island has "hope[s] of outpacing — and upstaging" Massachusetts. Rhode Island, in developing its own siting regime, paid attention to the troubles that plagued the Cape Wind Project. As the New York Times quoted the leader of the Rhode Island effort, Grover Fugate, "We took the opposite approach of what Cape Wind did." Unlike Massachusetts, which let EMI "dominate the research on potential sites," while the state focused on its regulatory role, Rhode Island has more aggressively jumped into the fray. The two states, for example, engaged in two different approaches when analyzing the environmental and cultural impact of the large wind farms. In Massachusetts, EMI submitted its own proposal and identified its preferred site. Then, the local, state, and federal governments began the permitting processes. In Rhode Island, the state scouted its bays for the best site. The state conducted its own environmental and cultural risk assessment and review. Then, at last, the state selected a preferred private developer to build and operate the wind farms.

By comparison to the Massachusetts approach, the Rhode Island permitting process is attractive. Indeed, anything seems better than a potential decade-plus delay. But judge the approach on its own merits, and the Rhode Island approach to offshore wind farm permitting stills appears preferable. By implementing the regulatory processes before the private developer jumps into the fray, a state will appear more welcoming and inviting to future private developers. It cuts down on regulatory uncertainty, limits the amount a private developer will need to spend to promote its project, and settles anxiety that the state may waiver in its support.

Of course, since no U.S. state has yet built an offshore wind farm, whether Rhode Island has truly leapfrogged Massachusetts as the leader in offshore wind farm siting remains unresolved. Indeed, both states have faced recent setbacks. In April, a federal historic panel recommended that the Department of the Interior (which must approve the use of this offshore site) reject the Cape Wind plan because it will negatively affect a site that is important to the areas native peoples, namely that it will disrupt the view of the sunrise and possibly disturb pre-Colonial burial grounds. Meanwhile, the Rhode Island Public Utilities Commission rejected the proposed power purchase agreement, a phase that Cape Wind has already secured. But it seems likely that as other states continue to examine the regulatory delays that have gummed up the works in Massachusetts, those states will look to the Rhode Island permitting model as a way to avoid some of the most debilitating boondoggles. So, while Rhode Island may not have actually leapfrogged Massachusetts in the race to establish the first offshore wind farm, its permitting regime will likely emerge as the preferred model for coastal states.

Sources:

Cape Wind, America's First Offshore Wind Farm on Nantucket Sound, http://www.capewind.org/index.php (last visited Apr. 17, 2010).

Conservation Law Foundation, Cape Wind, http://www.clf.org/work/CECC/capewind/index.html (last visited Apr. 17, 2010).

Dan Levitan, U.S. Wind Industry Bullish on Offshore Potential, but Breakthrough Needed, SolveClimate.com, Apr. 8, 2010 http://solveclimate.com/blog/20100408/u-s-wind-industry-bullish-offshore-potential-breakthrough-needed.

Sindya N. Bhanoo, A Race to Reap Energy From the Ocean Breezes, N.Y. Times, Apr. 2, 2010, http://www.nytimes.com/2010/04/03/science/earth/03wind.html?scp=1&sq=rhode%20island%20massachussetts&st=cse.

Tom Moroney & Jim Efstathiou Jr., Obama Wind Farm Goals Threatened by Indian Rites, Kennedy Wish, Business Week, Apr. 15, 2010, http://www.businessweek.com/news/2010-04-15/obama-wind-farm-goals-threatened-by-indian-rites-kennedy-wish.html.