Businesses at R.I. summer resort back offshore wind farm

By Peter Voskamp

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Sailboats race off the coast of Block Island, R.I. A company called Deepwater Wind is poised to build the nation’s first offshore wind farm in the Atlantic Ocean near here. Many local businesses support development of the project. (Photo courtesy of Block Island Tourism Council)

Block Island, R.I., is a community of about 1,000 souls 12 miles out to sea in the Atlantic Ocean. As a long-running advertisement in the Block Island Times tells it: Everything needed for human habitation on the pork chop-shaped idyll comes by ferry. There’s an airline, too, but it generally doesn’t transport much more than a few suitcases. If you build a house, all the material comes via ferry. All the food and drink. Even the electricity comes via ferry.

Unlike other New England resort islands, including Martha’s Vineyard and Nantucket in neighboring Massachusetts, Block Island is not connected to the mainland’s electric grid. Instead, roughly 1 million gallons of diesel fuel are ferried to the island annually. This fuel fires the island’s privately owned power plant, which pours its exhaust into the otherwise splendid island air.

The unique setting of Block Island adds to the cost of almost everything in town. Residents and visitors balk at the prices in the one grocery store. Restaurants shoulder shipping and utility costs reflected in menu prices. And nearly everyone has to live with high electricity bills.

In 2008, when worldwide oil prices spiked to nearly $150 a barrel, Block Island briefly held the distinction of having the highest electricity rate in the nation – 65 cents per kilowatt-hour. That’s compared to the current national average of 11 cents, according to the U.S. Energy Information Administration. Since most local businesses are in the tourism industry, they generate the vast majority of their revenues during the summer. Electricity takes a giant bite out of any profit margin.

Enter Deepwater Wind and its proposed five-turbine wind farm sited within 3 miles of Block Island’s southeast side. At full strength, the Block Island Wind Farm would have a capacity of 30 megawatts, enough to power about 17,000 homes – far more than the number of homes on the island, where maximum demand is seldom more than 4 megawatts total. Surplus electricity would be delivered from Block Island Power Company to National Grid on the mainland.

Construction of the $205-million project is expected to begin this summer. It would be the first offshore wind farm in the nation.

Deepwater has obtained leases at the state-owned Quonset Point, a former naval station, betting that the project will spur a jobs windfall for Rhode Island via the creation of a manufacturing hub for the burgeoning clean energy industry. The wind farm is expected to create as many as 200 local construction jobs, in addition to long-term maintenance jobs.

With electricity rates still hovering around 50 cents per kWh, businesses on Block Island are out front supporting the project.

“Might be our salvation as a business,” said Justin Abrams, who’s been doing business on Block Island for almost half a century.

During the summer Abrams, along with his daughter and son-in-law Rita and Steve Draper, run Block Island Resorts, one of the largest enterprises on the island, which consists of two hotels (1661 Inn and Hotel Manisses), three restaurants (The Oar along with both the hotel’s restaurants), the island’s only Laundromat, and the management of a half-dozen independent bed-and-breakfasts, not to mention providing housing for their 160 seasonal employees.

Abrams said he supports the wind farm “to get some help…in order to survive as a business on Block Island.”

Not only does the electricity expense affect the bottom line, it also deters from expansion and additional investments. Electricity comes up “every time we talk about expansion, as electricity is such a big part of the overhead,” Abrams said.

Air conditioning is “almost a demand by our customers now,” Abrams said, adding that in 1969, when he and his late wife Joan first started their first business on the island, “no one thought” about air conditioning.

“We can’t do [air conditioning] now,” Abrams said, not until there is a “more feasible [electricity] rate.”

For Elizabeth Connor, general manager of the Block Island Resorts, the wind farm offers more than just a long-term investment in how the island procures its power. High-speed Internet access remains an issue for the island – to the point that town government had to approach the mainland provider about more reliable service. But via an underwater cable connected to the mainland, the wind farm could also deliver fiber-optic Internet connections enabling residents, businesses, as well as the island’s school and medical center, better access to cloud-based computing services.

Offshore wind farms like these are popular in Europe. They could soon help generate clean, renewable electricity near U.S. coastal population centers. (Image Source: axelivarsson/Flickr)

Offshore wind farms like these are popular in Europe. They will soon help generate clean, renewable electricity near U.S. coastal population centers. (Image Source: axelivarsson/Flickr)

It’s not just owners of big seasonal businesses who are in favor of the wind farm; proprietors of smaller, year-round businesses are also desperate for relief.

Rick Lysik is a co-owner of Club Soda, a popular old restaurant and bar in the basement of the Highview Hotel. It’s a year-round establishment, one of the few serving food in winter.

Lysik said electricity is by far his business’s biggest-single expense – more than the labor costs of six employees, more than rent, and more than supplies. “It’s ridiculous,” he said.

Though Club Soda operates year-round, like all island businesses, it has to maximize summer revenues in order to pay bills come winter. “The power bill just kills,” Lysik said.

Having lived on the island for years, Lysik long ago came to terms with the cost of living trade-offs that come with residing on an island that many consider a piece of paradise.

“You’re gonna pay,” Lysik said. But still, he also doesn’t think the community –   especially the island’s business community – should just accept the higher costs if there’s a lifeline being offered to them.

“It’s a good” offer, and he wholly supports the island getting behind it.

Like other proposed offshore wind projects, most notably Cape Wind in Massachusetts, the Deepwater Project has not been without its critics. Some critics say simply lay a $50-million cable and forget the view-ruining, highly subsidized wind farm. Wind farm supporters say: No one will pay for the cable without the wind farm.

With the Block Island’s power arrangement currently relying on diesel fuel that has to get ferried onto the island, most everyone agrees that something has to give. That’s the bottom line with most island businesses:

“We’ve got to reduce our costs…and stay in business,” Abrams said.

Peter Voskamp is the former editor of the Block Island Times.