The state Department of Public Utilities has approved a deal to sell power from the proposed Nantucket Sound wind farm, marking the latest in a string of victories for the project’s developer.
“This is an incredibly important approval for the Commonwealth of Massachusetts because it really reflects the aspirations of citizens who want to transition to a clean energy future,” Jim Gordon, president of Cape Wind Associates, said following the ruling.
In the 351-page order issued Monday, the department approved an agreement between Cape Wind and National Grid to sell half the power from 130 wind turbines Gordon wants to build in the middle of the Sound. The ruling is the first approval of a long-term power contract under the state’s 2008 Green Communities Act.
In its ruling, the utilities department called the deal “both cost-effective and in the public interest.”
National Grid serves electric customers on Nantucket and in other parts of the state but not on Cape Cod and Martha’s Vineyard.
Under the agreement, National Grid would pay 18.7 cents per kilowatt-hour for the energy and other commodities related to the project. For an average residential electric customer in the utility’s territory, Cape Wind’s power will cost an additional $1.50 on a monthly bill for 618 kilowatt-hours, according to National Grid’s calculations.
The price of the contract would increase 3.5 percent annually over its 15-year life. The department denied another contract between the two companies for the second half of the power that would have acted as a placeholder until the electricity is sold to other entities.
“We find that approval of a second contract at this time would serve no clear purpose,” the commissioners wrote in their order.
Pursuing a Second Contract
Cape Wind is working to sell the second half of the project’s 468 megawatts, Gordon said.
“We’re pursuing numerous options to sell the balance of power,” he said. “When we do we’ll be back before the DPU hopefully for quick approval.”
The second contract would have been helpful to Cape Wind but is not necessary at this point, said National Grid deputy general counsel Ron Gerwatowski.
“If someone wants to buy the remaining power, they use our agreement as a model to get to the same place,” he said.
A second contract with the same conditions would face a quicker review, DPU chairwoman Ann Berwick said in a prepared statement released Monday.
“The issues underlying this contract have been fully adjudicated in this proceeding,” Berwick said. “If an identical contract comes before us, not all of the issues would require the same level of review.”
In a second order, the public utilities department denied a request by Cape Wind’s primary opponents, the Alliance to Protect Nantucket, to reopen the record to admit more evidence.
The Alliance and other opponents argue that the cost of Cape Wind’s power is far above the price for renewable energy from other sources and that public utilities is stacked with appointees of Gov. Deval Patrick, a strong supporter of the project.
Supporters contend the stable rates in the agreement are far better for consumers than the volatile costs for electricity generated from fossil fuels.
Alliance to appeal
“We fully anticipate appealing this political ruling,” said Alliance president and chief executive officer Audra Parker. Monday’s decision was a rubber stamp of Patrick’s favorable policy toward Cape Wind and, though not unexpected, outrageous in the face of concerns raised by ratepayers who will have to pay for the power, Parker said.
“You as a household, you as a business living or operating in a National Grid community, will be forced to pay this huge surcharge even if you opt out of the basic service,” she said, adding that Cape Wind should have been forced to undergo a competitive bidding process to sell its power.
Any appeal will land in the state Supreme Judicial Court, which, in October, ruled in favor of another state agency’s decision to approve Cape Wind.
The department’s review featured 17 intervenors, 13 days of hearings, three public hearings, 838 exhibits and nearly 3,000 pages of transcripts.
“I think it’s a very robust decision,” said Matthew Pawa, an attorney who represents Clean Power Now, a nonprofit organization that supports Cape Wind.
“Because everything about Cape Wind has been litigated to the ends of the Earth, they knew that they had to be very thorough,” Pawa said of the public utilities department.
Rest of the power
The approval of the contract with National Grid for half of Cape Wind’s power paves the way for the approval of a contract for the second half of the power, state Secretary of Energy and Environmental Affairs Ian Bowles said, brushing aside the Alliance’s claims that it was a political decision.
“The DPU being political appointees – that is true everywhere,” he said, adding that the agency’s job is to administer the law.
Matthew Morrissey, executive director of the New Bedford Economic Development Council, said the approval represents a positive step for New Bedford’s role in the Cape Wind project.
“This important milestone will move New Bedford into the forefront of the nation’s offshore Wind industry, as a result of the project being deployed from our port,” he said. “We look forward to New Bedford becoming a major hub for the industry and the hundreds if not thousands of jobs that this project will catalyze over time.”
The contract’s approval is the second most significant action under the Green Communities Act next to the creation of a landmark energy-efficiency program, Bowles said. But even with such progress there’s a long way to go to address climate change and to wean the country off its dependence on fossil fuels, he said.
“I think that the federal government is clearly profoundly out of step with the rest of the industrialized world,” he said of stalled climate-change legislation in Congress. “I don’t think we’re taking action at the velocity we need to, to address the dangers of climate change.”
Cape Wind first proposed building a wind farm in Nantucket Sound in 2001. The project’s developer must still secure permits from the Army Corps of Engineers and the Environmental Protection Agency. Both federal agencies are expected to issue permits for the project.
A raft of pending and anticipated lawsuits continues to face the project. The Alliance has joined a group of organizations in a suit against the federal government challenging its approval of the project earlier this year.
A Federal Aviation Administration approval of the 440-foot turbines also faces lawsuits.
Cape Wind officials say they hope to begin construction by next year.
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