The manager of New England’s electric grid has hedged its bets in declining to include the proposed Nantucket Sound wind farm as part of an April auction for future power supplies.
Independent System Operator New England Inc., the organization responsible for the region’s power market, does not believe Cape Wind Associates will have its 130-turbine project in operation by June of 2015, according to a Jan. 3 filing with federal energy regulators.
“Each year, we hold an auction to procure the amount of electricity or resources we believe we’ll need three years in the future,” said Marcia Blomberg, a spokeswoman with ISO New England. “Resources that clear in this market are required to be available when we call on them.”
April’s auction is for the so-called “forward capacity market” for the period of June 1, 2015, through May 31, 2016, Blomberg said.
Although critics pounced on the filing as another indication that Cape Wind will never be built, company officials and Blomberg said the estimate was conservative because of the stringent requirements that resources in the coming auction must meet.
“If they’re not available, they’re subject to financial penalties,” Blomberg said.
Cape Wind was one of 37 projects representing 1,100 megawatts of energy that didn’t qualify for the April auction, Blomberg said.
If the project is ready by June 2015, it could still be a part of the market through a bilateral deal with another project that is committed and not yet ready, or through so-called “reconfiguration auctions” between now and then, she said.
An off-Cape transmission project that ISO New England believes will not be ready by that time would also need to be completed for this to happen, she said.
Cape Wind would still be able to sell its power into a separate market if it is ready and is not able to take part in the forward capacity market, regardless of the completion of the outstanding transmission project, Blomberg said.
Opponents of Cape Wind called the decision by ISO New England another in a line of recent problems that have plagued the project.
“I think it’s significant that the operators of our electricity grid in New England say that Cape Wind won’t be done by at least 2015,” said Audra Parker, president and CEO of the Alliance to Protect Nantucket Sound, an anti-Cape Wind group.
Cape Wind last year lost out on a $2 billion loan from the federal government, has no known financial backers, has no buyer for half of its power and is facing serious problems surrounding the revocation of a permit from the Federal Aviation Administration, Parker said.
In addition, Parker said, the leverage state officials have tried to wield over NStar to buy power from the project through a proposed merger between the utility and Northeast Utilities appears to have weakened.
Massachusetts energy officials recently withdrew a demand that the proposed new company freeze rates for five years as part of the merger deal. In addition, Connecticut utility officials are now reviewing the merger.
Massachusetts officials are continuing to ask for a delay in the merger proceedings here until NStar and Northeast Utilities show how the merger would help meet the state’s renewable energy goals.
The ISO New England filing also raises concerns about how much power Cape Wind will generate, Parker said.
In its filing, ISO New England stated that Cape Wind requested to be qualified for the April auction with a summer qualified capacity of 94 megawatts. That figure is far below the percentage of the project’s nameplate capacity and the production on high demand days that the company has been promising, Parker said.
The 94 megawatt figure is not an anticipated average, Blomberg said, but rather the amount the project is expected to produce during peak demand periods in the summer and winter.
“I think ISO is just extremely conservative in what they say they want to count on,” Cape Wind spokesman Mark Rodgers said.
The figure ISO New England uses is the median for an extended period of time versus the high output the company has said would occur on the hottest summer days when demand is at its peak or the average of 170 megawatts Cape Wind has referenced, Rodgers said.
ISO New England’s decision not to include Cape Wind in the April auction for the 2015-2016 forward capacity period is not surprising and “not a big deal,” Rodgers said.
The company fully expects to be fully or partially operational by 2015, he said, adding it would be able to sell its power into the forward capacity market soon thereafter.
“This is not something that we require in any sense to move forward,” he said.
The company still expects to begin construction within the next year, he said, adding that a recent decision by the state’s Supreme Judicial Court in favor of an approval of Cape Wind by state utility regulators provided a big jolt of momentum for the project.