Government reviewing Google-backed power line

WASHINGTON Tue Dec 20, 2011 4:15pm EST

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WASHINGTON (Reuters) - The U.S. Interior Department on Tuesday said it hopes to make a decision on the location of a Google-backed offshore transmission line in the next few months, pledging that the project would not face the bureaucratic delays that plagued previous offshore renewable energy projects.

Interior Secretary Ken Salazar said companies backing offshore projects in the past often never knew whether they would receive the right to develop their proposal.

"Because of the reforms that we've implemented ... that won't happen again," Salazar told reporters at a press conference. "We will know in the next several months whether or not this applicant is going to receive the real estate to develop this transmission."

The department has worked to streamline regulatory oversight for offshore renewable power, as part of the Obama administration's efforts to promote development of cleaner sources of energy.

Google and its partners plan to construct the Atlantic Wind Connection, a transmission system that could transport up to 7,000 megawatts of electricity from wind farms off the Atlantic coast.

Google has invested hundreds of millions of dollars in solar, wind and geothermal projects across the world as it seeks to help make renewables cost competitive with coal.

The transmission project, which consists of two parallel transmission lines stretching from the New York/New Jersey metropolitan area to southern Virginia, is also backed by Good Energies, a private firm, and Japan's Marubeni Corp.

The department said it plans to open a 60-day public comment period to gauge whether any other developers are interested in the area proposed for the transmission line.

While a few entities might express interest in the area, Atlantic Wind Connection chief executive Bob Mitchell said he does not expect any major challenge that would lead to a competitive auction.

"I predict the department ... will find that the ocean's a pretty big place and there's probably room for more than one project," Mitchell told Reuters.

If there is no significant competition for the area, then the department plans to quickly make a decision on whether to grant a right-of-way for the transmission project .

The project would still have to undergo environmental review, which can take 18 to 24 months, once it received the right-of-way for its proposed route.

BlUEWATER TROUBLES

The announcement on the Atlantic Wind Connection comes after NRG said last week that it was putting its offshore wind project, Bluewater Wind, on hold.

NRG said Bluewater has been unable to find an investment partner and intends to terminate the project's 200-megawatt power purchase agreement with Delaware power company Delmarva Power & Light Co at the end of the year. Delmarva is a unit of Washington, D.C.-based energy company Pepco Holdings.

NRG said congressional actions "rendered the Delaware project both un-financeable and financially untenable for the present."

Congress eliminated funding for the Department of Energy's loan guarantee program applicable to offshore wind also failed to extend the Federal Investment and Production Tax Credits for offshore wind, which expires at the end of 2012.

Bluewater's woes will not affect the Atlantic transmission line, Mitchell said.

"Our investors and our management team are not deterred by that," he said. "We weren't dependent on any one project, so we're marching ahead."

(Editing by Jim Marshall and David Gregorio)

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