Two Tidal Projects Gain Speed in Energy Development Race

By IAN FEIN

While the proposed Nantucket Sound wind farm continues to grab
headlines and attract political attention, two underwater tidal energy
projects that flank either side of the Vineyard are quietly progressing.

The Federal Energy Regulatory Commission (FERC) within the last few
weeks granted a preliminary permit for an underwater hydroelectric
project off the north shore of the Island in Vineyard Sound, and also
formally accepted a new application for a tidal energy project in
Muskeget Channel between Chappaquiddick and Nantucket.

The two projects, which are still in the early stages of
exploration, are proposed by separate private development companies.
Little detail is available for either project at this time, and both
developers admit they are still not sure whether their proposals will
prove economically feasible.

But with a growing public concern about climate change and rising
electric demand in New England, the waters off the Vineyard have emerged
as a prime site in the gold rush for emerging renewable energy
technologies. If they are built, the tidal energy proposals and the Cape
Wind project would offset production from the oil and natural gas-fired
power plant in Sandwich, which currently supplies nearly all of the
electricity consumed on the Cape and Islands.

"We want to help solve this global vexing problem," said
Roger Bason, president of Natural Currents Energy Services, which
proposed the Muskeget Channel project and is also pursuing a similar
tidal energy project in the Cape Cod Canal. "This is the historic
beginning of a new era of potentially very effective sustainable
development, and we're working through the details, policy and
protocols with all the agencies involved."

Nationwide, and particularly in Massachusetts, the regulatory path
for tidal energy projects remain somewhat unclear.

By federal statute, FERC regulates hydropower projects that are in
navigable waters, which traditionally covered dams in rivers. But the
agency in 2006 received a flood of more than 40 permit applications for
tidal energy projects, an emerging technology that connects underwater
propellers via cable to an electric grid.

Unsure how to deal with the new technology and anticipating further
exploration, FERC froze many of the permit applications while it put
together an interim policy this winter. Published in February, the
policy aims to reduce regulatory barriers while subjecting proposals to
strict scrutiny.

The FERC process begins with a preliminary permit, which effectively
grants a developer first-in-line status to pursue, examine, and study
the feasability of a project in a certain location. A license to build
and operate the project comes later.

Oceana Energy Company of Washington, D.C., applied for the Vineyard
Sound site as well as another ten locations along the nation's
coastlines last spring. FERC granted a preliminary permit for the
Vineyard Sound site on May 31, requiring that the company file six-month
progress reports as it studies the site.

Natural Currents Energy Services, which is based in New York but
plans to open an office in Cambridge, filed permit applications for the
Cape Cod Canal and Muskeget Channel sites this spring. They have also
applied for four other projects elsewhere in the country. FERC formally
accepted the Muskeget Channel application on June 13, triggering a
60-day public comment period before any permit can be issued.

Despite intense competition in the offshore hydropower industry, the
two companies are working cooperatively and have agreed to share studies
and information, particularly for the two projects located off the
Vineyard.

However, a key unanswered question for both projects is whether
Massachusetts state law may actually preclude that type of development
in the proposed locations. Unlike the Cape Wind proposal, which would be
sited in federal waters more than three miles from shore, both tidal
projects would fall entirely within water controlled by the
commonwealth.

Charles Cooper, a permitting consultant for the Vineyard Sound tidal
energy project, said that question needs to be straightened out before
the company begins any scientific fieldwork in the Sound.

"Massachusetts presents an interesting challenge," said
Mr. Cooper, who lives in Falmouth. "One of the first things we
need to do now is to find out whether the state is going to be
supportive of this type of renewable energy. That's really the
critical path at this point."

A spokesman for the Massachusetts Executive Office of Energy and
Environmental Affairs was noncommittal, and said she could not comment
specifically on either project.

"In general, we'd be interested in looking at tidal
energy as another form of renewable energy," said environmental
affairs spokesman Lisa Capone. "But obviously, we'll have to
look at each project on its merits and assess potential impacts to the
site."

Cong. William Delahunt, whose legislative district encompasses the
Cape and Islands, cosponsored a bill on the federal level this spring
aiming to fund research and promote development of offshore hydropower.
He said in a press release that he "strongly endorsed" the
use of those marine technologies off the coast of New England.

But Mark Forest, chief of staff for Mr. Delahunt, expressed concern
yesterday about the various projects pending in the waters off the
Vineyard. Like the Cape Wind project, which the congressman opposes, Mr.
Forest said the sites of these proposed projects are being driven by a
private developer, instead of by local communities and appropriate
permitting authorities.

"It speaks to the issues we've been raising for the last
several years, which is the need for pre-designated zones where these
types of projects should be located," Mr. Forest said yesterday.
"We want to encourage renewable energy in our oceans, yet at the
same time we must set clear standards and guidelines. These waters
belong to the commonwealth of Massachusetts, and any project there
should be based on the public interest - not by the private
developer who gets there first with a reasonably complete
application."

Mr. Bason, who said his company proposed the Muskeget Channel
project in part because of Congressman Delahunt's enthusiasm for
tidal energy, noted that he planned to meet with state and local
officials, as well as any other interested stakeholders, in the coming
weeks and months. He said the company would be proactive in explaining
the details of their project at a later time.

"We have nothing to hide. We want a transparent
process," Mr. Bason said. "We've very sensitive to the
conflicting issues and tortured history of [Cape Wind] project, and we
hope ours will be nothing like it."