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How much is too much for Cape Wind’s power?

CENTERVILLE – When she first heard about Cape Wind, Christine Thamm was more open to the idea of the proposed Nantucket Sound wind farm than most of her neighbors.

That changed when she realized her electric bills would increase.

“Every time I read the paper, they say we’re not going to get any financial benefit, so, for me, my bills would go up,” said Thamm, who owns The Old Hundred House Bed and Breakfast in Centerville.

Based on NStar’s calculations, Thamm would pay an additional $22 per year for Cape Wind’s power.

“I can go down and look out my window and probably see it,” Thamm said about the area where the 130-turbine wind farm would be built. “To not benefit from it would be absurd.”

For more than a decade, the debate has raged over whether the proposed wind farm would actually save money for electric customers on Cape Cod and the Islands or cost them more.

With last week’s filing at the state Department of Public Utilities of a contract for a quarter of the project’s power between Cape Wind Associates LLC and NStar – which delivers electricity to Cape Cod and Martha’s Vineyard – that debate appears settled.

Now the argument becomes whether the extra cost is worth it.

Although opponents of the project argue that an anticipated additional cost of $940 million for NStar’s part of Cape Wind’s power over the life of the contract is proof the deal is a boondoggle, supporters of Cape Wind say the effect on electric customers is minimal and the project’s environmental benefits justify the added expense.

The extra cost of the contract to NStar will be mixed in with the utility’s other, cheaper sources of electricity and cost consumers less than a quarter-penny per kilowatt-hour, according to NStar’s calculations. The extra cost goes on the delivery side of a customer’s bill.

The cost of power from the project, and consequently to end users, will rise annually through the 15-year life of the contract, which must still be approved by the DPU.

Although NStar delivers electricity to customers on the Cape and Vineyard, many business, municipal and residential customers get their power from other suppliers, primarily through the Cape Light Compact, a cooperative that buys power in bulk.

Customers on Nantucket get their electricity delivered by National Grid, which has agreed to buy half of Cape Wind’s power at the same price proposed in the NStar deal. Because National Grid is buying more of Cape Wind’s power, which is a more costly type of energy in its overall portfolio, its customers will pay more.

The compact has about 140,000 customers, the regional energy agency’s senior power supply planner Joseph Soares said, adding that 124,000 are residential ratepayers.

For the compact’s average residential customer who uses 650 kilowatt-hours per month, the cost of Cape Wind’s power would be $1.41 per month or an increase of 1.2 percent on a bill of $114.

The compact delivers slightly more than 1 billion kilowatt-hours per year, Soares said.

Do the math and this means $2.17 million in additional annual payments from compact customers for Cape Wind’s power.

“All of the above-market piece is going to go on the distribution rate,” Soares said. “That for us is heartburn.”

Business representatives, residents and town officials on the Cape had mixed reactions to the extra cost of Cape Wind’s power.

Truro, the Cape’s smallest town, would fork over an extra $1,745 in the first year of Cape Wind’s operations.

Barnstable, the region’s largest town, would cough up an additional $28,500, according to Finance Director Mark Milne.

The cost is not insurmountable, but the money could be used elsewhere, including in already underfunded areas, he wrote in an email to the Times.

Furniture maker Richard Connor and his wife, Susan, of East Sandwich will pay an extra $1.25 per month, or $15 for Cape Wind’s power in the project’s first year.

“I would say that that price doesn’t strike me as being unreasonable,” Connor said.

Cape Cod Chamber of Commerce Chief Executive Officer Wendy Northcross said, “We always knew it was going to be more expensive.”

She was more concerned for smaller businesses than for larger ones that could better absorb the cost.

Northcross also worried about the long-term effects of higher electricity costs.

“When you’re in economic development, you’re trying to get people to move here, encourage business here,” she said. “Those energy costs factor in.”

Although customers of NStar and National Grid will pay more for Cape Wind than they would for other sources of power, the project is expected to reduce energy costs across New England through a process known as price suppression, Cape Wind spokesman Mark Rodgers said.

Because Cape Wind’s power will be considered a “no-cost” fuel when decisions are made about dispatching power into the electricity market, it will knock other power sources out of the mix.

“Wind power has been seen to reduce wholesale electric market prices in Europe, and here in the U.S. in places like New York and Texas,” Rodgers said.

“In fact, for NStar’s Massachusetts electric distribution customers here on Cape Cod, this price suppression effect reducing electric bills will outweigh the expected bill increase over the life of the project.”