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BOSTON – On Wednesday the state Supreme Court rejected arguments by the Alliance to Protect Nantucket Sound and several other groups that the 2009 power purchase agreement between Cape Wind and National Grid was not in the public interest, cost effective and should have been solicited through competitive bidding.
Justice Margot Botsford wrote the decision.
“This is a major step forward for Cape Wind,” spokesman Mark Rodgers said. “It’s a big milestone for the project and will bring us closer to creating jobs and making Massachusetts cleaner and energy independent and a leader in offshore wind power.”
Cape Wind has proposed building 130 turbines in Nantucket Sound. The project received all the required permits although the Federal Aviation Authority permit was revoked by an Oct. 28, court decision.
National Grid agreed to buy half of the power generated by Cape Wind for 18.7 cents per kilowatt-hour over the next 15 years, with the price escalating 3.5 percent annually. They original deal was for 20.7 cents but attorney General Martha Coakley’s office ratcheted the price down by two cents per kwh – which would chop an estimated $456-million from customer bills. The price is still well above average for electricity.
“Today’s ruling is a blow to ratepayers, businesses and municipalities who are being asked to bear billions of dollars in new electricity costs when other green energy alternatives are available at a fraction of the cost,” Audra Parker, President of the Alliance said in a statement. “The good news is the increasingly clear reality that Cape Wind will never be built. Cape Wind has been denied FAA approval, has been denied critical federal loan guarantees, has no utility willing to buy half its power, and cannot find investors. Those facts alone render this decision moot.”
Rodgers believes the National Grid deal will pave the way to future success.
“We think this approval will have a beneficial effect on selling more power in Massachusetts and once the contracts are done that’s when we can really connect with the project financing and we can start building the project,” he opined.
The agreement was entered into under the Green Communities Act, which is designed to promote alternative energy by requiring companies like National Grid to purchase renewable energy. TransCanada filed suit objecting to the deal April 16, 2010, alleging that the GCA was unconstitutional since it discriminated against out-of-state power generators and Massachusetts dropped that provision. The contract was approved by the DPU Nov. 22, 2010.
The court’s decision found the geographic restrictions had no bearing on the contract and the deal was not unconstitutional.
The DPU originally determined that the contract was “cost effective” because “the expected benefits (both quantified and unquantified) of (the contract) to National Grid customers exceed the expected cost to National Grid customers,” and the court agreed.
The DPU also argued that cost wasn’t the sole factor to consider when thinking of “the public interest” provisions of the GCA, that benefits needed to be weighed and,” Botsford wrote, “Contrary to the Alliance’s claim, the record offers substantial evidentiary support for this conclusion.”
She added that, “the Cape Wind facility provides significant and special advantages by virtue of its location near an area that uses high levels of electricity and the advanced stage of the permitting process for the facility,” and, “it is more efficient to produce electricity from offshore wind.”
“That was a very detailed analysis by the DPU,” Rodgers said. “Every type of energy project has costs and benefits and the standard in Massachusetts is that you need to look at both sides. The DPU found that offshore wind provides a unique set of benefits you can’t fine with other sources.”
Rodgers noted Cape Wind is much closer to consumers in eastern Massachusetts land based wind farms in Maine or Upstate New York.
“In additional (land based) projects tend to produce at night. Cape Wind delivers directly to eastern Massachusetts when they most need it because of the sea breezes that have an effective and documented track record, and it will create jobs in Massachusetts,” Rodgers said.
The New England Power Generators Association complained that there should have been a competitive bidding process but the court deferred to the DPU on that issue.
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