A key piece of federal support for the proposed Nantucket Sound wind farm is now in doubt.
The United States Department of Energy has put an application for a federal loan guarantee for the 130-turbine Cape Wind project on hold until more resources for the program become available, according to a statement from the company.
“The Department of Energy (DOE) has notified Cape Wind that our application is not one that can be completely processed by the program’s September 30 deadline and consequently is ‘on hold’ until further resources can be made available to the program,” according to the statement.
The anticipated loan backed by the federal government would have reduced the anticipated cost of the project to electricity customers, Cape Wind spokesman Mark Rodgers said today.
Currently the project is expected to cost more than $2 billion.
Cape Wind will continue to pursue the loan, according to the company but a letter this week from Energy Department executive director of the loan program Jonathan Silver indicates that such efforts may be futile.
“If in the future, the Loan Programs Office has sufficient budget resources, we would be pleased to continue our evaluation of your project,” Silver wrote in the May 10 letter to Cape Wind and other applicants. “We must caution you, however, that there is no assurance that we will ever be in a position to continue our evaluation of your project or of the terms on which we would do so.”
The Massachusetts Department of Public Utilities has approved a contract between Cape Wind and National Grid to sell half of the project’s power but no buyer has been announced for the remainder. National Grid has agreed to pay 18.7 cents per kilowatt-hour for its share of the power.
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.
Although Cape Wind has received approvals from the federal government to move forward with the project the company must still secure financial support and faces legal challenges brought by opponents who argue the project is too expensive and in the wrong location.
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