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Biz group takes AIM at Cape Wind; Says power deal skirts state rules

A major business group tangled with National Grid executives yesterday over whether a Cape Wind contract complies with state bidding rules and whether proposed electric rates are being fairly applied to customers.

On the fourth day of hearings on a proposed $2.7 billion contract between National Grid and the Cape Wind developer, a lawyer for the Associated Industries of Massachusetts zeroed in on how the utility and offshore wind farm builder arrived at a long-term electric contract earlier this year.

Bob Rio, a senior vice president at AIM, suggested that National Grid veered away from a state law requiring “cost-effective and reasonable” rates after seeking competitive bids from renewable energy suppliers.

Lawyers for AIM also suggested that the expensive Cape Wind rates – which are more than twice as high as electricity from fossil-fuel power plants – are unfairly being applied to National Grid customers who technically buy their power from other energy suppliers. Such customers usually only pay National Grid distribution fees, Rio said.

But Richard Rapp, a National Grid executive who headed up contract talks with Cape Wind, said the utility has closely followed contract guidelines as outlined by the state’s Green Communities Act.

The Department of Public Utilities’ hearings on the controversial Cape Wind project are expected to run through next week.