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Cape Wind foes fight power deal in court

BOSTON – Opponents of the proposed Nantucket Sound wind farm took another shot Thursday at derailing the project in front of the state’s highest court.

During arguments before the Massachusetts Supreme Judicial Court, attorneys for the Alliance to Protect Nantucket Sound, Associated Industries of Massachusetts and the New England Power Generators Association contested the constitutionality and cost effectiveness of a contract for half of the power from the Cape Wind project.

National Grid has agreed to buy the power for about 19 cents per kilowatt. The cost of the 15-year pact will increase annually by 3.5 percent and includes an incentive for the utility equal to 4 percent of the contract’s annual value.

In the typical rapid-fire exchanges of the high court, the seven justices jumped in almost immediately as the alliance’s attorney argued that National Grid should have considered renewable energy proposals from other companies, including those outside the state.

“Essentially Section 83, which is the statute at issue in this case, mandates the purchase of electricity from renewable resources but clearly discriminates against interstate commerce on its face because it prohibits the purchase of that electricity from sources located outside of Massachusetts,” attorney Evan Lawson said.

Section 83 is the part of the state’s Green Communities Act of 2008 that requires utilities to buy a percentage of their power from renewable energy projects.

Justice Robert Cordy then countered that the provision requiring power to be purchased in-state has been suspended.

But Lawson said negotiations between National Grid and Cape Wind Associates LLC were set in motion before that requirement was suspended by the state Department of Public Utilities.

There is no obligation under the Green Communities Act that National Grid negotiate with somebody out of state, said Justice Margot Botsford.

“That then plays into the cost effectiveness argument because if they only do a sole source negotiation, which is what the New England Power Generators will be discussing with you this morning, then there’s no way you can determine whether what they’re doing is cost effective,” Lawson said.

There are other benefits beside price that the statute allows the DPU to consider, said Justice Francis Spina.

Richard Kanoff, attorney for the New England Power Generators Association, argued that National Grid did not consider multiple proposals from renewable energy developers as the statute appears to require.

Spina questioned Kanoff’s interpretation of the statute.

National Grid had a number of options, Spina said. “One of which is the public solicitation. The other one is individual negotiation and there’s a third clause in the statute that says ‘or other methods.'”

The options do not negate the need for allowing multiple generators to compete for the contract, Kanoff said. To decide otherwise would turn the restructuring act and other laws intended to encourage competition “on its head,” he said.

The DPU found that if cost were the only factor, onshore wind power is less expensive than offshore wind but the other benefits from Cape Wind outweigh the high cost of the project’s power, said attorney Kenneth Salinger, who represents the state.

These include the ability of Cape Wind to meet peak load better than land-based projects, he said. In any case National Grid considered other sources to meet its renewable energy requirement, Salinger said.

“What the department found and this is amply supported by substantial evidence was that National Grid would have entered into this contract with or without the geographic limitations,” Salinger said.

Justices also heard arguments from the parties in a second case in which the alliance argued that the DPU abused its discretion by not opening the record on its review of the contract to include new information on other renewable energy contracts. The state and Cape Wind countered that there was no requirement that the DPU reopen the record and that, even if it did, the new evidence would have only added to what the agency already knew about the relative cost of land-based wind energy projects.

Last year, the court affirmed the state’s approval of a comprehensive permit for the project.

The court is expected to render a decision on the two cases within 130 days.