A recent decision by the Cape Light Compact to begin discussions with Cape Wind Associates about future contracts is little more than a symbolic gesture.
The Compact, an affiliation of Cape and Vineyard towns that purchases electricity and gas on behalf of consumers, does not have the legal authority to contract directly with Cape Wind Associates. Cape Wind, still facing a daunting permitting process, has no product to sell. And if the company has secured the needed financing to build the proposed wind farm of 130 turbines in Nantucket Sound, nobody at the privately owned company is saying so.
Nonetheless, last week the Compact board of directors voted to authorize its chief procurement officer – the person responsible for negotiating contracts with electrical suppliers – to contact Cape Wind ”for the purpose of entering into negotiations for a long-term power supply contract.”
The vote was 10-3 in favor of Margaret Downey contacting Cape Wind.
So far there has been no communication between the company and the Compact, according to spokesmen from both sides.
So, if there is no product to sell and the Compact does not have legal authority to contract directly with the company, why send Downey to talk to Cape Wind?
”I see this as a completely symbolic gesture, but an important one,” said Chris Powicki, energy consultant with Water Energy & Ecology Information Services and a Compact watchdog.
”In making this vote, the board has said, ‘We’re willing to negotiate and look over all the options,'” he said.
”The Compact is institutionally incapable of entering into a power supply contract,” said Powicki, an advocate for alternative energy sources. ”But there could come a day when that changes. And, the Compact could say to its suppliers in the future, we want you to purchase power from (Cape Wind).”
An eye toward the future
Cape and Islands electric customers, like customers throughout New England, get their power through an integrated power grid and not from any particular generating unit.
Right now, the Compact is a retail supplier of power. It does not have the status of a wholesale-retail supplier, which is what it would need to buy directly from Cape Wind.
But, said Downey, her instructions from the board are to ”enter into discussions for a long-term contract,” a move the board has made with an eye to the future.
The Compact could ask its supplier – for now, Con Ed Solutions – to enfold power produced by Cape Wind into its supply.
Or, if Cape Wind gets wholesale and retail licenses, it could negotiate and sign a contract with the Compact.
Another possible path is one outlined in a $100,000 study done for the Compact last year. This study looked at whether becoming an electricity cooperative would benefit Cape and Vineyard customers. A cooperative could own and operate local renewable-energy projects and enter into long-term wholesale pricing contracts.
Should the Compact gain authority to sign a contract with a supplier like Cape Wind, the fact the wind farm is not yet built is not a problem.
It is standard practice in the world of utilities for contracts to be signed with companies that have power plants, including wind farms, still in the blueprint stage, Downey says. Last year the Compact signed a contract to eventually purchase power generated by a wind farm still in the planning stages in western Massachusetts.
And, certainly as far as Cape Wind is concerned, owner James Gordon will need contracts in hand when he looks for financing to build the project, according to Powicki.
Whether a contract with an entity like the Compact would be enough to impress potential investors is another question.
Cape Wind spokesman Mark Rodgers was reserved in his response to the Compact vote.
”We have always indicated our desire to sell power on the Cape and Islands,” Rodgers said. ”We have not yet heard from them, but we look forward to doing so.”
Not an endorsement
Whatever happens, the Compact’s recent vote should not be construed as an endorsement of the Cape Wind proposal, said Charlotte Striebel, Yarmouth’s representative on the Compact board and one of those who voted against the plan to negotiate with Cape Wind.
”We as a board have had several discussion about whether it is appropriate for us to endorse Cape Wind and to date we have not taken that step,” she said. ”If and when the time comes that is an appropriate measure for the Compact, we will take a public position.”
Earlier this year, for the first time in its 10-year history, the Cape Light Compact saw a contested race for the governing board’s executive committee.
Some saw the election as a proxy power struggle over the wind farm controversy including chairman Robert Mahoney of Dennis who was challenged in his leadership of the committee.
At the time, Mahoney said the challenges to the board broke down along the lines of who wanted the Compact to publicly support the Cape Wind proposal and those who prefer the Compact not take a position at this point.
Eastham’s Fred Fenlon, who challenged and lost to Mahoney, said the challenge was about leadership and not Cape Wind.
By Karen Jeffrey
9 April 2007
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