National Grid’s proposed electric contract with Cape Wind will cost ratepayers about $200 million more than previously reported, thanks to a sweetheart deal for the giant utility and other power companies that buy energy from the wind-farm developer.
In a recent filing, Attorney General Martha Coakley’s expert witnesses acknowledge that the starting price per kilowatt hour of electricity from Cape Wind will actually be about 19.4 cents – not 18.7 cents, as touted earlier this month when a settlement agreement was reached between Coakley, Cape Wind Associates, National Grid and the Patrick administration.
The increase is due to a 4 percent “remuneration” fee that the Legislature and Gov. Deval Patrick approved when the Green Communities Act was passed two years ago.
The fee, which sources say was pushed by National Grid and other utilities, is meant to reduce the risks to power companies signing long-term contracts with renewable energy firms, even though Grid’s contract with Cape Wind guarantees a price and includes annual step increases.
The existence of the fee was previously known, but many assumed it was calculated into the base kilowatt prices negotiated between parties.
State filings by Coakley, who recently forced Cape Wind and National Grid to lower their proposed rates to customers by 10 percent, however, make clear the 4 percent fee is on top of the compromise 18.7-cent per kilowatt rate.
At one point in Coakley’s recent filing, an expert witness referred to the 19.4 cent rate as the “real” starting price for Cape Wind power. Estimates by the Herald put the potential cost of the fee over 15 years to ratepayers at $200 million.
A spokesman for Coakley said the attorney general’s office had no legal standing to strike the fee from the compromise settlement because it was written into law.
Critics blasted the additional cost as yet another example of the escalating estimates of the multibillion-dollar Cape Wind project.
“The more you dig into the (project), the more you realize it’s a financial boondoggle,” said Treasurer Tim Cahill, an independent candidate for governor.
“The lack of transparency surrounding Governor Patrick, National Grid and the sweetheart deal that is Cape Wind is incredibily troublesome,” said Charlie Baker, the Republican candidate for governor.
But the Patrick administration yesterday defended the provision as necessary for “pilot long-term contracts” for clean-energy projects.
A National Grid spokesman would only say the fee complies with state law.
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