National Wind Watch: Wind Energy News » Massachusetts OKs utility deals to buy wind power

Massachusetts regulators have approved deals by the state’s second-largest utility to buy power from three land wind farms scattered around New England, the firm announced Friday.

NStar said the Department of Public Utilities approved contracts between the utility and Hoosac Wind in Massachusetts, Groton Wind in New Hampshire and Blue Sky East in Maine.

DPU officials could not be immediately reached for comment after business hours Friday.

Under Massachusetts law, utilities must get 3 percent of their electricity demand through long-term contracts with renewable power providers.

The NStar deals represent about 1.6 percent of its demand, so even with the DPU decision, the utility still must buy more renewable power.

National Grid, the state’s largest utility, met its entire obligation by agreeing to buy half the power from Cape Wind, the nation’s first federally-approved offshore wind farm. But NStar has said it wants to pursue cheaper power.

National Grid’s 15-year deal, negotiated directly with Cape Wind, sees the power starting at 18.7 cents per kilowatt hour and increasing 3.5 percent annually.

NStar has kept pricing on the three deals confidential, but analysts have estimated the power costs at about 9.4 cents per kilowatt hour. The three deals are fixed price contracts, meaning the price per kilowatt hour doesn’t increase over time. NStar selected its contracts after a competitive bidding process that emphasized lowest price and drew about 74 qualified bids.

Offshore wind costs more than land wind, in part because of the cost of building and maintaining huge sea turbines.

National Grid has said large scale projects like the 468-megawatt Cape Wind are essential to meet coming renewable energy demands and it’s worth the extra cost of about $1.50 a month for an average residential user (about 618 kilowatt hours usage).

The Hoosac project in Monroe, Mass., and Florida, Mass., is roughly 29 megawatts and is set to be running by July 2012. The 32-megawatt Blue Sky East wind farm in Eastbrook, Maine, is scheduled to be operating by May 2012. The 48-megawatt Groton project in Groton, N.H., is scheduled to be operating by December 2012.

The Blue Sky deal is for 15 years, while the other two are for 10.

The Hoosac and Groton projects are owned by the Spanish power utility Iberdrola SA. Blue Sky is owned by Boston-based First Wind.