The Alliance to Protect Nantucket Sound has launched another legal attack against Cape Wind, the latest effort aimed at drowning the offshore wind turbine project with a flood of litigation.
The alliance filed its new lawsuit in Boston federal court today, claiming that officials in Gov. Deval Patrick’s administration overstepped their bounds by prompting NStar to agree to above-market rates in a long-term contract with Cape Wind.
Recent legal events prompted the alliance to take this new approach. The opposition group was emboldened by two decisions last fall by federal judges in Maryland and New Jersey. Those decisions, which are both now under appeal, essentially said regulators in those states infringed on the Federal Energy Regulatory Commission’s authority to set wholesale electric rates by imposing contracts to help finance the construction of natural gas power plants.
The contract in question in this new Cape Wind lawsuit dates back almost two years ago, when NStar agreed to a long-term contract with Cape Wind to buy 27.5 percent of the power from Cape Wind after the 130-turbine wind farm is built in Nantucket Sound. The rates that NStar agreed to pay in February 2012 were essentially the same as those agreed to by National Grid two years earlier, in a similar contract to buy half of Cape Wind’s power.
National Grid entered the contract more or less voluntarily: The total amount of power the utility would buy represents a small portion of its overall electricity needs, so the impact on individual consumers’ bills would be modest, and the purchase would go a long way toward meeting the utility’s renewable energy requirements.
But NStar initially wanted to take another approach toward meeting the state’s renewable energy procurement standards. The Alliance asserts in its lawsuit that NStar was essentially forced by energy officials in Patrick’s administration to buy from Cape Wind instead in order to get its merger with Northeast Utilities approved. Once that contract was signed with Cape Wind, the NU-NStar merger sailed through.
The alliance argues in the latest lawsuit that the state’s actions during those deliberations equaled rate-setting for wholesale prices – something the alliance says is the province of FERC, not the states.
The alliance names top officials in the state Department of Public Utilities and the state Department of Energy Resources, as well as Cape Wind and NStar as defendants in the suit. The opposition group is joined by a few other plaintiffs, including the town of Barnstable and three businesses in that town.
Cape Wind spokesman Mark Rodgers said the alliance’s lawsuit is a frivolous legal complaint without merit. “The opposition group was unsuccessful in challenging a nearly identical power contract between Cape Wind and National Grid and they will fail again here,” Rodgers said. “After careful reviews, the Department of Public Utilities found that Cape Wind was ‘cost effective’ by providing unique benefits that exceeded the cost of its power.”
Cape Wind Associates LLC has emerged victorious in every legal case that the alliance has thrown its way. But the developer, an affiliate of Boston-based Energy Management Inc., still has a few more cases the resolve. Alliance CEO Audra Parker said there’s still one Cape Wind lawsuit before the U.S. Court of Appeals in Washington, involving an appeal of a Federal Aviation Administration approval. Parker said the alliance is also supporting four other lawsuits before a judge in the U.S. District Court in Washington, challenging several federal permits.
Meanwhile, Cape Wind has been busy trying to line up the financing needed to get construction started on the massive project, which is expected to cost at least $2.5 billion.
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