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Processors join forces to tilt at offshore wind energy project

Two plastics processors with plenty of "green cred" filed a joint petition to stop construction of an offshore wind energy facility. The clash in Rhode Island has made allies of the two processors, Toray Plastics and PolyTop, as well as a local environmental group, the Rhode Island chapter of the Conservation Law Foundation, which also has filed an appeal to halt building of the new site.

The case has had widespread coverage in the local press, including in articles here and here, and brings together a host of hot-button issues including renewable energy versus the cost for it; job creation and the cost of it; and the potential of the windmills to blow away the region's tourism industry. Add in "not in my backyard," plus an angry attorney general, and you have the makings for a real slugfest.

Earlier this month, the state's Public Utilities Commission (PUC) approved a plan for the state's largest utility, called National Grid, to purchase energy form the new wind power site. A company called Deepwater Wind hopes to build a 6-8-windmill site off the shore of Block island, RI. The Commission approved a plan to 20-year contract by which Deepwater will sell electricity for $0.244/kWh to National Grid. The contracts to take hold in 2013, with prices increasing 3.5% each year thereafter.

The price contracted for the wind energy reportedly is more than double what National Grid pays for energy from more conventional sources. Not mincing words, the state's attorney general, Patrick Lynch, said the deal smells of "an outrageously bad sweetheart deal for Rhode Island," as he described it in a statement released by his office.

Flexible plastics packaging processor Toray Plastics (America) Inc. (North Kingstown, RI) has its own sustainable manufacturing program, so it has plenty of green credibility to carry into the fracas. The same can be said for Polytop (Slatersville, RI), a closure molder whose sustainability initiatives include greater use of post-consumer recyclate, a company-wide recycling program, and investment in both energy-saving new cooling technology for its processing machinery and in all-electric molding machinery.

In their joint appeal, the companies argued that permission for the wind farm was given without evidence the contract for its energy met the "commercially reasonable" test required by Rhode Island law. According to local news reports, the appeal also included statements from both companies predicting the contract would force them to pay substantially more annually for energy: $7 million more in Toray's case and more than $1 million for PolyTop.

Lynch's office provided MPW with a press release regarding a letter he sent to the state's PUC immediately before it approved this contract. From that release: Lynch said it was “especially disheartening” to hear the testimony of Shigeru Osada, senior vice president of engineering and maintenance for Toray Plastics America Inc. In the direct testimony he filed with the PUC, Mr. Osada noted that since Toray established its film-manufacturing base at the Quonset Point Business Park in 1985, it has invested $750 million in Rhode Island. Toray employs 600 people, making it one of the state’s biggest employers, and in 2009 paid $76 million in Rhode Island in payroll, state taxes and purchasing.

Yet, Mr. Osada noted, “We never imposed a financial burden on any existing or potential businesses to achieve this.”

Observing that he’s been harshly criticized for criticizing what he believes are the Deepwater project’s unrealistically rosy economics and job estimates, Lynch said, “Here is one of the very brightest of Rhode Island’s business leaders stating, and I quote from Mr. Osada’s direct testimony, ‘In a free-market competitive economy, laws should not attempt to specifically guarantee one company’s revenue and profits for 20 years…Subsidizing one company by forcing all people to buy high-priced electricity is what this Power Purchase Agreement really does.’ ”

At presstime MPW had not yet received comments from the two processors nor from Deepwater Wind.

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