Robert F. Kennedy Jr., an environmental lawyer and president of Waterkeeper Alliance, writing here, in the Wall Street Journal, on July 18, warns electricity ratepayers in Massachusetts that the real promise of Cape Wind, 10 years in the permit gathering stage and nearing the end of that trail, is for enormously high power prices.
“Someone,” Mr. Kennedy argues, “needs to tell the politicians in Boston and Washington that Cape Wind, the long-stalled plan to cover 25 square miles of pristine Nantucket Sound with 130 massive steel windmill-turbine towers, is a rip-off. That someone is most likely to be the newly enlightened electricity ratepayers – and voters – of Massachusetts.”
Mr. Kennedy’s warning is no surprise, but it’s urgent. The state of Massachusetts, by its administrative and legislative policies favoring uneconomic wind power generation, is putting sharp upward pressure on electricity costs. Mr. Kennedy addresses Cape Wind, whose supporters will certainly rebut his argument with irrelevant and unsubstantiated claims that his is nothing but a not-in-my-backyard (NIMBY) argument. But, Cape Wind and the brewing effort to install big offshore wind south of the Vineyard are really not-in-my-pocketbook issues.
Good, basic rates for residential customers hover about 8 cents cents per kilowatt-hour (kWh). Massachusetts’ irrational and poorly developed interest in clean energy from offshore wind farms is destined to make 8 cents look like a good deal. The state requires the state’s four investor-owned utilities to buy a growing percentage of the power they sell from renewable energy providers.
For example, Cape Wind has made a deal to sell the electric power, that the planned Nantucket Sound wind farm may one day produce, to National Grid. National Grid agreed to buy half the power Cape Wind creates and, in addition, bought the right to award the other half to a utility such as NSTAR, or another retail supplier, as it chooses. The first half was worth roughly $3 billion to Cape Wind, the second a similar amount. Altogether, the deal will help Cape Wind finance creation of the 130-turbine wind energy plant at Horseshoe Shoals.
National Grid is one of four suppliers that serve Massachusetts customers, including NSTAR, Western Massachusetts Electric Co., and Unitil Corp. Advocates for ratepayers, such as the Cape Light Compact, are shopping elsewhere. That’s because National Grid will pay 18.7 cents a kilowatt-hour for 50 percent of Cape Wind’s energy when it first comes online, perhaps in 2013.
The price will increase by about 3.5 percent a year for 15 years, for as much as $3 billion in potential revenue for Cape Wind. The price, which includes a state-required renewable energy subsidy of 6.1 cents per kilowatt-hour, is well above the current price of electricity from conventional power sources. To provide basic residential service, National Grid currently pays 8.11 cents per kilowatt-hour for the power alone, not counting distribution or transmission charges, according to the company’s website.
So, end-users will pay a premium for environmentally friendly wind power that amounts to about one-third of the contract costs, according to numbers in a National Grid filing made to the Massachusetts Department of Public Utilities (DPU).
And, as Mr. Kennedy argues, NSTAR, which has so far refused to sign up for the high-priced offshore wind power play, may be near to caving to extraordinary state political and regulatory pressure. Whitey Bulger would be admiring of the state’s strong-arm tactics.
“Vermont wants to take its nuclear plant off-line and replace it with clean, green power from HydroQuebec – power available to Massachusetts utilities – at a cost of six cents per kilowatt hour (kwh).” Mr. Kennedy writes. “Cape Wind electricity, by a conservative estimate and based on figures they filed with the state, comes in at 25 cents per kwh.” State green power rules don’t allow Massachusetts generators to satisfy the green power requirement from out-of-state sources, so cheaper – still green – power is off-limits to Massachusetts electricity companies.
Offshore wind power, whether at Horseshoe Shoals or south of the Vineyard, is an out-and-out fleecing of Massachusetts ratepayers. Wind energy generated on land, in appropriate locations, makes far better sense cost-wise, and it’s just as green.
“Stopping Cape Wind is now about preventing us from buying into a boondoggle,” Mr. Kennedy writes, “from investing desperately needed federal, state, and ratepayer dollars in a single project, on public land, for the benefit of a private developer when better and cheaper renewable energy – from wind and water power – is abundantly available.”
Ditto for the offshore wind now contemplated for federal waters south of the Vineyard.
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