BOSTON, Jan. 17 /PRNewswire-USNewswire/ – Buried deeply in the federal Minerals Management Service (MMS) Draft Environmental Impact Statement (DEIS) is a whopping admission that Cape Wind’s offshore wind plant would produce electricity at two to three times current wholesale prices in the area.
The DEIS indicates electricity produced by Cape Wind is projected to cost $122 per MWh – more than double the recent price of wholesale electricity in the ISO New England electricity market that supplies part of the Cape and Islands’ demand. According to the report, ISO New England average prices were $66 per MWh over the last two years in southeastern Massachusetts.
That cost doesn’t include the state and federal subsidies that Cape Wind is lining up – over $1 billion in MA renewable energy credits and an additional $300 million from the federal Production Tax Credit. Add those subsidies in, and the average cost for a megawatt hour of electricity is three times the current average price, or over $190 per MWh.
Excessive long-term electrical rates led to the cancellation of several offshore projects last year. Following the termination of a multibillion-dollar project off the coast of Texas, the controversial Long Island Power Authority project was also shelved after reports showed that LIPA would absorb significantly higher rates at $290 per MWh. Similarly in Delaware, the Bluewater offshore proposal faltered on news that ratepayers there would see a premium of nearly $120 per MWh, or if commodities continued to escalate in price, the additional price per MWh could be as high as $550. Calculations by the Delaware Public Services Commission showed the project could increase electric bills by as much as $55 per
month.
Despite the high costs of other offshore wind projects and data just released by MMS, Cape Wind developer Jim Gordon misleads the public when he suggests that “the project is going to provide long-term value because we don’t have to contend with fuel costs.” Contrary to Gordon’s unsubstantiated claims, the DEIS itself reports that “none of the sites [including Horseshoe Shoal] appear to be profitable at today’s electricity prices.”
According to Alliance to Protect Nantucket Sound CEO Glenn Wattley, “If Cape Wind builds it, the public will pay dearly. On top of massive tax subsidies, Cape Wind would have a devastating effect on the cost of electricity to the consumer. Without a doubt, our electric bills would go up.”
MMS DEIS Study Referenced: Appendix F: Economic Model (Description of Economic Model: Results and Discussion, pages 16-18; Peer Review, Comments of Lessly Goudarzi, pages 32-38)
Contact: Audra Parker 508.775.9767
508.280.9082
SOURCE Alliance to Protect Nantucket Sound
17 January 2008
URL to article: https://www.wind-watch.org/news/2008/01/17/feds-say-cape-wind-would-cost-two-to-three-times-current-electric-prices/