An Historic Deal
Massachusetts’ Vineyard Power Cooperative, a Community Power Network member, achieved a significant victory in late January. The 501(c)(12) organization, with its corporate partner Offshore MW, won the right to develop offshore wind power. The partners leased a 166,886-acre tract in ocean waters approximately 12 miles south of the island of Martha’s Vineyard, where Vineyard Power is based. Their winning bid in the auction was $166,886 (that is, a rate of $1 per acre).
Vineyard Power was established in 2009 with the goal of powering Martha’s Vineyard from renewable sources, such as solar and wind. Offshore MW is the New Jersey-based sister company to Wind MW, a German firm. In April 2011, the two partners jointly submitted, as a response to a Request for Interest (RFI) notification issued by the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM), a commercial lease proposal to BOEM. The two organizations then made their partnership official through a Community Benefit Agreement (CBA), signed in January.
Erik Peckar, General Manager of Vineyard Power, calls the CBA agreement “the first of its kind in the US offshore wind industry” The CBA enabled BOEM to approve the partnership prior to the auction, and thus the sale itself. It also enabled the developer (Offshore MW) to receive a 10 percent credit in the auction. “The CBA,” said Peckar, “is a collaborative effort to develop a utility scale offshore wind farm with the intention of delivering value to the local community of Martha’s Vineyard through local job creation, infrastructure investment, and community participation and input into the project.”
Peckar said the membership and community project participation was crucial to the success of the sale. “Membership input, as well as input from our local representatives and community members, was very critical in receiving the CBA credit factor in the bid. Our members contacted BOEM during every public comment period during the process. We are grateful for their activism and for BOEMs response to their requests.”
“Overall our membership and the community [are] very excited [about the deal],” said Peckar. “This was a major achievement not only for our organization, but for our community as a whole. While we took a giant step in achieving our renewable energy goals for our island, there is still much work to be done on the legislative side in Massachusetts in order to create and maintain an offshore wind energy industry in New England.”
What Happens Now
Despite the lease, Vineyard and Offshore MW cannot begin building their offshore wind farm immediately. Once the Department of Justice approves the provisional lease, an annual rent of $3 per acre ($500,658) must be paid to BOEM. (Offshore MW is responsible for these payments.) The permitting process will then begin, which will take about three years, according to Vineyard Power President Richard Andre.
Peckar explained the necessity for the long lead time from approval to construction as follows: “Over the next three years, as per the National Environmental Policy Act or NEPA, all developers must submit an Environmental Impact Statement [EIS] on their leased area. This process along with the extensive permitting purviews makes the process very detailed. It is necessary when constructing an offshore wind farm to make sure that all of the bases are covered in terms of safety, environment and permitting.”
Innovation and Goals
When asked what he thought was innovative about Vineyard Power, Peckar responded, “Vineyard Power is creating a 21st Century utility company owned and controlled by the members of our island community. Current utility and energy structures are dominated by investor-owned utility companies and our model puts the control and benefit back in the hands of the community.” As to the mix of solar and wind energy the organization offers, he commented, “Renewable energy such as offshore wind and solar complement each other well when talking about loads and load management. At Vineyard Power, our goal is [to] balance these two technologies with grid management and energy storage systems such as electric vehicles, ultimately decreasing our dependence on the grid and storing more of our energy on island.”
“Our goal is a 100MW community-owned offshore wind farm with benefits, such as electricity price stabilization and ownership remaining in the local community,” he continued. “We anticipate several phases of development, the first being the 40 MW phase and, as our population grows and membership in our cooperative increases, we would expand to 100MW.” Peckar hopes to expand the current membership in the cooperative from 1,400 to more than 8,000: “Our goal has always been to represent a majority of individuals and businesses on Martha’s Vineyard. This level of success is important in terms of scalability of our wind farm and financing.”
“Our main objective and challenge,” Peckar concluded, “is to create a 21st Century utility cooperative that is replicable, both regionally and nationally.”