The PPA is for the 20MW Block Island development, billed as a precursor to an eventual plan build a 350MW large-scale development. The first PPA for the project was rejected as "not commercially viable" by the PUC in March.
The aim of the Block Island project is prove the commercial viability of the overall project. The higher power purchase price has attracted critics of the scheme.
Under the terms of the new deal, National Grid 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 after that period.
However, there is still trouble ahead. Rhode Island attorney general Patrick Lynch said he would be appealing the decision. He said recent changes to the state law that required the PUC to re-examine the PPA unfairly favoured Deepwater.
In June, 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.
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