The much-anticipated Department of Public Utilities hearings into the proposed Cape Wind-National Grid electric rates start today amid signs that opponents are pinning their last hopes of blocking the controversial offshore wind project on non-cost issues.
The high prices of Cape Wind – which is expected to cost National Grid ratepayers about $2.7 billion over 15 years – will be hotly debated and contested during the hearings, which are expected to last weeks.
The starting price of 18.7 cents per kilowatt hour, which doesn’t include an additional 4 percent “remuneration” fee that goes directly to National Grid, is more than twice as high as electricity from fossil-fuel and land-based wind-power generators. The rates for Cape Wind also would go up 3.5 percent per year for 15 years under the contract being reviewed by the DPU.
But Attorney General Martha Coakley’s recent intervention in the case – in which she forced Cape Wind and National Grid to lower their originally proposed prices by 10 percent, or about $300 million in present-day dollars over 15 years – has taken some of the steam out of the cost issue.
Opponents say they hope the three-member DPU – all of whom were handpicked by Cape Wind proponent Ian Bowles, Gov. Deval Patrick’s environment and energy secretary – might knock the prices down even farther.
But three key opponents – TransCanada Energy, Associated Industries of Massachusetts and the Alliance to Protect Nantucket Sound – are counting on non-cost issues as the main bulwark of their opposition.
Their objections may well spill over into court battles after the DPU hearings, observers say.
TransCanada, which owns wind farms in Maine, has a pending lawsuit that says the bidding process for renewable energy in Massachusetts was originally flawed by requiring a “made in Massachusetts” clause in the recently passed Green Communities Act. TransCanada wants all long-term renewable energy contracts under the act to be re-bid.
AIM objects to the way that Cape Wind-National Grid rates would be spread among National Grid customers, saying it also violates the Green Communities Act.
The Nantucket Sound alliance, which has bitterly opposed Cape Wind from its inception early last decade, is challenging whether the Cape Wind-National Grid contract is being singled out for special treatment compared to the renewable-energy bidding process for Nstar, another large utility that’s carefully gone out of its way to avoid buying energy from Cape Wind.
“The whole process is flawed,” said Bob Rio, senior vice president of AIM. “We believe there are important issues to be resolved.”
Proponents have consistently said the Cape Wind project has carefully followed federal and state guidelines, including a negotiating process that allowed the wind developer and National Grid to enter into one-on-one talks for a long-term energy contract.
“I have full confidence in the Department of Public Utilities, as an independent adjudicatory agency, to conduct a fair, impartial proceeding, consider all issues and viewpoints, and render a decision on the merits,” said Bowles, Patrick’s energy czar.
After years of heated debate, opponents and proponents do agree on one thing: The Cape Wind-National Grid hearings are unprecedented for the issues involved and the attention they’ve drawn.
“As the first offshore wind installation in the U.S. and the start of a new Massachusetts-based industry, Cape Wind is a historic project,” Bowles said.
“In all my years covering energy issues, I have never seen a DPU case with this type of interest,” said Rio. “A typical DPU hearing usually has only two or three people (not directly) associated with it in the audience, and they’re usually half asleep.”
The first Cape Wind-National Grid hearing starts today at 9 a.m. at the DPU’s headquarters in the South Station office building in Boston.
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