April 20, 2011
Massachusetts

Offshore wind farm wins last OK, but lacks buyer for 50% of power

By Donna Goodison, www.bostonherald.com 20 April 2011By Donna Goodison, www.bostonherald.com 20 April 2011

Cape Wind cleared its final regulatory hurdle yesterday but remains only halfway to its green-energy goal with no other utility yet willing to bet billions in ratepayer cash for the unsold 50 percent of the power from the controversial offshore project.

Developer Cape Wind Associates won federal approval of its construction and operations plan for the $2.6 billion project. The Hub firm expects to start building the nation’s first offshore wind farm in Nantucket Sound later this year, a decade after first proposing it.

“We’re confident that we’ll be in a financial position to start the project in the fall,” Cape Wind vice president Dennis Duffy told reporters at a press conference where U.S. Interior Secretary Ken Salazar handed out the 130-turbine project’s final permits.

“We’re just in a lot of very sensitive active negotiations right now,” Duffy said. “We’d like to have it sold by that time, and we hope it will be, but we’re prepared to proceed.”

National Grid last year agreed to purchase half of the power produced by the project, saying Cape Wind’s clean energy benefits outweigh the estimated $1.2 billion cost to ratepayers, above projected market prices of comparable energy, over the 15-year contract.

The focus now turns to Nstar, the state’s other large utility, which has refused to buy into Cape Wind. Nstar instead has lined up contracts with three less expensive land-based wind farms.

But those deals, along with Nstar’s pending $4.2 billion merger with Northeast Utilities, face close state regulatory scrutiny in the months ahead.

In March, the state Department of Public Utilities said it would apply a stricter standard in reviewing utility mergers that would advance the goals of the Green Communities Act, the 2008 law signed by Gov. Deval Patrick.

Cape Wind Associates will get a say during the DPU’s review of the proposed merger of Nstar and Northeast Utilities as a so-called “intervenor.” Public hearings are set to start July 6.

Asked yesterday whether the Patrick administration would pressure Nstar into buying the rest of Cape Wind’s power, Energy and Environmental Affairs Secretary Richard Sullivan said, “Nobody is saying ‘have to’.”

Nstar spokeswoman Caroline Allen said the utility is working to meet the state requirement that 3 percent of its power supply come from long-term renewable energy contracts.

“We applaud the administration’s commitment to clean energy, and we share the same commitment,” Allen said. “But it’s important to note that our merger is unrelated to Cape Wind, and we would hope that any decision on Cape Wind would not impact the decision-making regarding our merger.”

The Obama administration dispatched Salazar to the Hub to make the announcement at the Charlestown Navy Yard.

Cape Wind critic David Tuerck, executive director of the Beacon Hill Institute at Suffolk University, said that could be a sign that the developer has lined up a buyer.

“What a shame,” Tuerck said. “The one hope that Massachusetts ratepayers and taxpayers had was they wouldn’t get a buyer for the second half of their power, and this boondoggle wouldn’t go forward.”

Salazar said the 10 years it took to permit Cape Wind was “unacceptable.”

“We can build a smarter U.S. program for offshore wind,” he said. “The wind potential off the Atlantic coastline is staggering. We believe that smart planning and early environmental reviews will result in big dividends.”

The 468-megawatt Cape Wind will power an estimated 200,000 homes. The governor touted Cape Wind’s potential to create 600 to 1,000 “green” jobs.

“States up and down the East Coast are now looking to Massachusetts with envy as we launch this brand-new American industry,” Patrick said in a statement.

Cape Wind still faces 11 state and federal lawsuits and appeals filed by opponents who say the project will ruin Nantucket Sound’s environment.

“It’s a national treasure that should not be industrialized,” said Audra Parker, head of the Alliance to Protect Nantucket Sound, who called the announcement “a blatant attempt to declare victory in a battle that is far from over.”

URL to article:  https://www.wind-watch.org/news/2011/04/20/offshore-wind-farm-wins-last-ok-but-lacks-buyer-for-50-of-power/