Windy Pork

Published in the Providence Business News on Monday.

Offshore Wind is Pork

Should that matter to the RI Supreme Court

Deepwater Wind has accomplished something that we at the Ocean State Policy Research Institute (OSPRI) thought impossible. Their proposal to create 6 permanent jobs with $400 million in excess costs to Rhode Islanders makes the federal stimulus $646,214 per job look positively cost effective (Cato, 2009).

The truth is that neither is a good idea. Both show what happens when government money is funneled to politicians’ favored projects. This isn’t an allegation of corruption, per se, but recognition that government, operating without competitive pressures, isn’t very efficient and can’t out-perform the market when it comes to picking winners.

To be fair, the legislature has its eye on more jobs later, although no one has suggested how it can happen without even more enormous subsidies. And to add insult to injury, after all but ordering electric customers to spend the rent money on expensive windmills, the general assembly got a note of caution recently from a study for its special commission on ports. The report urged that Rhode Island go slow on investment in facilities for windmill support at Quonset, because the industry may not materialize.

But this is the purported pot of gold at the end of the ‘green’ rainbow that justifies us overpaying for electricity. What happened?

Despite Quonset’s extant facilities, the folks bilking Massachusetts ratepayers, Cape Wind, have decided to build from scratch in New Bedford, Mass. Shocking!

You start to see a pattern here?  The folks with an IV into our wallets in Rhode Island tout Rhode Island facilities, while these snake oil salesmen in Massachusetts offer the same patronage to Massachusetts.

Thankfully, although National Grid has thrown in the towel, no doubt thanks to a rich load of perks tossed in its direction, NSTAR the other major utility in Massachusetts, showed how effectively open bidding, rather than sole source contracting, can be for its ratepayers. NSTAR put its renewable energy contracts out for bid and market estimates show it will be paying under 10¢/kwh while the average pricing for Cape Wind and Deepwater Wind, considering escalators, is over 30¢/kwh.

This is a green apples to green apples comparison. Clean natural gas, which currently provides 97% of RI’s energy, is falling in price towards 5¢/kwh due to growing supply.

Even as the legislature gets a consultant’s report dismissing the promised benefits, the Deepwater project forges forward — facing perhaps its last significant governmental hurdle in the form of a case to be heard at the RI Supreme Court this Wednesday, Mar. 11th.

Should the emerging picture of these windmills as pork affect the Supreme Court review? The separation of powers tells us that policymaking is the job of the General Assembly and even if they made a bad decision to support Deepwater, it is not the Court’s job to act as a safety valve.

But the Court should take a “hard-look” at the administrative process that actually approved the contract. If, as it appears, the Economic Development Corporation’s testimony that economic benefits would flow from this project did not consider relevant factors in an open process, this undercuts the reliance courts normally place on agency decisions.

OSPRI has filed an Amicus Brief in the case asking that the court take cognizance of the “hard-look” doctrine in federal precedents that requires a court not only to find the administrative decision plausible, but to look to whether the decision was “fully reasoned”.

The RI Supreme Court has embraced the early “hard-look” precedents. Then Superior Court judge judge, O. Rogeriee Thompson, cited the penultimate in that line of cases, State Farm in deciding Manglass v. RIDHS, but the RI Supreme Court never reviewed that case. Now would be the time for the court to validate Judge Thompson’s citation and renew its commitment to the critical function of meaningful judicial review.

Agencies are not elected and yet they effectively make laws that govern our daily lives. There is no sleight to the separation of powers if courts take a “hard look” at agency decisions, so long as the court does not substitute its judgment for that of administrators. Typically, however, a decision that is deficient from a “hard-look” perspective is returned to the agencies for further consideration.

This is a process oriented rule, it may not result in a different decision, but it ensures that the fullest consideration has been afforded significant public policy decisions, and handing a $400 million bill to Rhode Islanders is just that.

From a political theory perspective this “hard-look” approach has a tension, serving as an implementation the separation of powers through the check and balance of judicial review while nonetheless mildly blurring the lines of the separate departments. To further public understanding of our arguments, we have arranged for a critique of their strong and weak points by visiting Brown University professor Steven Calabresi and others at the Political Theory Project at Brown on Tuesday, May 10th at 2:00.

Professor Calabresi teaches constitutional law at Brown, is a professor of law at Northwestern, a prolific legal author, a co-founder of the Federalist Society, and effectively a native son of Rhode Island. It is with great pride that OSPRI joins with the local Federalist Society organizing caucus to welcome Professor Calabresi to the legal theory discourse in our state.

Those interested in public policy generally and especially relative to the Deepwater Wind case are encouraged to attend both this forum and the court hearing.

Brian Bishop is the director of OSPRI’s Founders Project and Fellow on Regulatory Affairs.


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