National Wind Watch: Wind Energy News » Group challenges wind power deal

A Massachusetts business group has asked Massachusetts’ highest court to set aside the state’s approval of the power-purchase deal between the Cape Wind project and the utility National Grid.

The 6,000-member Associated Industries of Massachusetts said in a statement yesterday that the Department of Public Utilities overstepped its powers and set a dangerous precedent for allowing utilities to negotiate agreements outside the competitive bidding process when it approved the deal last month.

In its appeal, the business group, known as AIM, contends that the approval of the National Grid/Cape Wind deal by state regulators was “arbitrary, capricious,’’ and an “abuse of discretion and not otherwise in accordance with the law.’’

“AIM believes the agreement sets a dangerous precedent for allowing utilities to negotiate expensive power agreements outside of the competitive bidding process and to allocate the costs of those contracts unfairly to commercial and industrial customers,’’ the group said in a statement.

Cape Wind spokesman Mark Rodgers said the company is confident the contract will “withstand any legal challenge.’’ He said the project will prove to be an economic boon for the state.

“Cape Wind will create over a thousand new jobs in Massachusetts and contribute to greater energy diversity and reliability of our state’s energy supply while reducing dependence on imported energy,’’ Rodgers said in a statement.

AIM also argued that the amount of power purchased through the agreement exceeds 3 percent of National Grid’s load. It said that is a violation of the state’s Green Communities Act, which limits long-term contracts to 3 percent of a utility’s total electricity load.

The Cape Wind contract represents 3.5 percent of National Grid’s load, according to AIM, which said lowering the contract to 3 percent would save ratepayers millions.

A spokeswoman for National Grid also predicted the contract will survive the legal process.

“We have said repeatedly that we cannot let this project pass us by if we are to take seriously the renewable energy requirements set forth in Massachusetts and the region at large,’’ said National Grid spokeswoman Jackie Barry.

Robert Keough, spokesman for the Executive Office of Energy and Environmental Affairs, which oversees the Department of Public Utilities, said the offshore wind farm is one of the most-litigated projects in the state’s history, including five lawsuits filed by the Alliance to Protect Nantucket Sound, which opposes the project.

“These appeals were entirely to be expected,’’ Keough said. “But all the issues raised in the appeals were exhaustively considered in the DPU proceeding, and we fully expect the Department’s actions to be upheld.’’

The state endorsed the deal between National Grid and Cape Wind, a 130-turbine wind farm planned for Nantucket Sound.

National Grid has agreed to buy half of Cape Wind’s power, beginning in 2013 when developers expect to begin producing power.

The starting price is 18.7 cents per kilowatt hour – about double today’s price of power from conventional sources – and increases 3.5 percent per year for the life of the contract. That charge covers electricity, capacity, and renewable energy attributes.

Cape Wind foes have argued that the cost is too high and would be a huge drag on local businesses.

They have also said there is plenty of cheaper alternative energy, such as land-based wind, that could better help the utility meet its obligations under Massachusetts law to get 15 percent of its power from renewable sources by 2020.