National Wind Watch: Wind Energy News » National Grid deal means higher rates for local consumers

LOWELL – The Cape Wind project will feature hundreds of turbines off Nantucket Sound, but thousands of ratepayers in Greater Lowell communities will be the ones seeing their energy bills rise because of the $2 billion offshore wind farm.

Lowell, Chelmsford, Billerica and Tewksbury are some of the cities and towns in the region where ratepayers will pay more when Cape Wind comes online in 2013.

Those communities are four of the 160 municipalities in the state served by National Grid, the state’s largest utility, which has reached a 15-year agreement with Cape Wind to purchase 50 percent of the farm’s power at 18.7 cents per kilowatt-hour in 2013, followed by annual price increases of 3.5 percent.

Plans reportedly call for the project to include 130 turbines producing an average of 182 megawatts, or enough to power more than 200,000 homes

“This is not just a Cape Cod issue,” said Barbara Durkin, spokeswoman for Taxpayers Against Cape Wind. “Once National Grid came into the picture, it became a problem for the communities who are customers of National Grid.”

Businesses in central Massachusetts will suffer from the increase in energy costs and be forced to cut jobs, said David McKeehan, president of the North Central Massachusetts Chamber of Commerce, which represents National Grid customers in Ayer, Pepperell, Leominster and Clinton.

“This is already a high-cost state, and we are desperately working to keep jobs in the region,” he said. “To have added costs layered on makes no sense.”

But Ron Gerwatowski, deputy general counsel for National Grid, said, “This is not a large increase occurring here.”

He said a typical residential customer who uses 500 kilowatt-hours of electricity would see a $1.24, or a 1.7 percent, increase in his monthly bill beginning in 2013.

He also said Cape Wind will help the company meet its state-mandated goals for renewable energy.

“In order to get environmental benefits, we need to pay a little more for that,” he said. “Most customers would agree that protecting the environment is important.”

Durkin’s group, which calls itself a coalition of grass-roots opponents of the project, said municipalities will also be hard hit by the rate increase.

She estimated that the city of Lowell will be on the hook for a $3.3 million increase in energy costs in 2013 and $49 million over 15 years.

Lowell City Manager Bernie Lynch said the city would have a difficult time combating rising energy costs due to Cape Wind, but could not confirm Durkin’s figures.

“We are not in a position where we can afford more money on anything,” he said. “We are looking to cut costs.”

Lynch said increased energy costs are expected with renewable-energy projects, and that such projects help to reduce the country’s dependence on foreign oil. He also said there is often fluctuation in oil costs, which makes renewable projects a viable alternative.

Tewksbury Town Manager Richard Montuori said that even a 2 percent increase would be disastrous for the town’s budget. He said he would be unwilling to cut anything to do with firefighting, police or wastewater treatment.

“I can’t even imagine where we would cut,” he said.

Republican gubernatorial candidate Charlie Baker has been a staunch opponent of Cape Wind, labeling it a “sweetheart deal.” Rick Gorka, Baker’s campaign spokesman, said ratepayers across the state will suffer if the project receives final approval from state regulators.

Gov. Deval Patrick is a supporter of the project, which he says will help the state meet renewable-energy goals.

Gorka said, “Massachusetts ratepayers already have the fourth-highest cost of electricity in the country, and Cape Wind, Governor Patrick’s personal pet project, will only increase rates across the commonwealth.”

Sometime in November, state regulators are set to decide whether to approve the contract between National Grid and Cape Wind to buy half the wind farm’s power.

U.S. Secretary of the Interior Ken Salazar signed the first offshore wind-farm lease in U.S. waters on Oct. 6.