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SJC affirms Cape Wind power-purchase deal

The state’s highest court has backed Massachusetts utility regulators’ approval of a deal between Cape Wind and National Grid for power from the proposed Nantucket Sound wind farm.

In a decision released today, the state Supreme Judicial Court found that a power-purchase agreement for half of the 130-turbine project’s energy was not unconstitutional, as opponents of the deal argued. In a separate decision, the court denied a motion by opponents to reopen the state Department of Public Utilities record on the agreement.

In the court’s 34-page decision on whether the deal between Cape Wind and National Grid is constitutional or has other issues such as cost effectiveness, Justice Margot Botsford wrote that there was no violation of the federal commerce clause because the state lifted its limitation that only allowed it to review power sources within the state.

“Based on the record, the department ultimately found that National Grid demonstrated that it had complied with the new, nongeographically limited statute and regulations in its negotiations with Cape Wind,” Botsford wrote.

National Grid agreed to the deal with Cape Wind based on reasons unrelated to the geographic limitation, Botsford wrote.

Cape Wind’s primary opponents, the Alliance to Protect Nantucket Sound, and the other plaintiffs in the cases before the Supreme Judicial Court, argued that the DPU improperly found the agreement to be cost effective and that the contract should have been solicited through competitive bidding.

On the question of cost effectiveness, Botsford wrote that under the state’s Green Communities Act cost effectiveness does not simply mean least cost.

“Rather, an analysis of cost effectiveness must consider ‘all costs and benefits associated with (the power purchase agreement), including the non-price benefits that are difficult to quantify, and including costs and benefits of complying with existing and reasonably anticipated future federal and state environmental requirements,’” Botsford wrote.

In its second opinion released today the court found that the DPU did not abuse its discretion in denying a motion by the Alliance to reopen the record of the department’s review of the agreement between Cape Wind and National Grid so it would include information about contracts between NStar and other renewable energy developers.

Although the Alliance and the town of Barnstable recently won an important case before the U.S. Court of Appeals challenging the Federal Aviation Administration’s approval of Cape Wind, the developer has won more than a dozen other lawsuits connected to the project. Several federal lawsuits challenging the U.S. Department of Interior’s approval of the project are pending in federal court.

In 2010 the state Supreme Judicial Court ruled in favor of a comprehensive permit issued by the state for the project that was challenged by opponents.

The FAA is currently reviewing the project’s potential hazard to navigation in light of the federal appeals court decision faulting its approval of the project, according to an FAA spokeswoman.

Cape Wind must still secure a buyer for the second half of its power and financial support to construct the wind farm.