This is the second agreement between the two companies after the Public Utilities Commission rejected the previous offer as being too expensive. The deal was 24.4 cents per KW/h for a 20MW wind farm at Block Island, a precursor to the final 350MW development.
Under the terms of the new deal, Narragansett will pay the same rate. However, the deal sets the price as an upper limit for the first year and leaves the possibility the price will be reduced the initial period.
The deal follows last month’s clearing of a law to enable the development to circumvent PUC objections. Rhode Island governor Donald Carcieri has signed a bill allowing the commission to take into account other factors besides price when making a decision on a PPA.
The law requires Deepwater Wind to disclose its construction and development costs. If the developer achieves any capital cost savings during development, this will translate into a lower power purchase price, Carcieri's office said.