An enormous wind farm planned for Nantucket Sound has generated another lawsuit, with a town and businesses claiming Massachusetts unconstitutionally compelled an energy company to buy high-priced electricity from the wind farm.
The Town of Barnstable, Massachusetts, Hyannis Marina, two other businesses and the Alliance to Protect Nantucket Sound Cape Wind Associates LLC, NStar Electric Co. and the four top officers of the Massachusetts Public Utilities and Energy Resources departments, in Federal Court.
The plaintiffs claim the state cut a deal with NStar Electric that required the company to buy electricity from the Cape Wind turbine farm in Nantucket Sound, though cheaper energy could have been purchased from out of state.
The plaintiffs claim the deal is illegal because “the Federal Power Act gives the Federal Energy Regulatory Commission (FERC) exclusive jurisdiction to regulate all wholesale sales of electricity. Thus, FERC has exclusive jurisdiction to regulate any wholesale electricity sale made by Cape Wind. Conversely, Massachusetts may not regulate Cape Wind’s wholesale electricity sales; any such regulation by Massachusetts is preempted by the Federal Power Act.”
The pricing system used by the federal government is multistate and market-based, which puts Cape Wind at a disadvantage because the wind farm’s “power is far more expensive than power generated by nonrenewable resources. Moreover, even comparing Cape Wind to other renewable generators, generating electricity with wind turbines in the middle of Nantucket Sound is more expensive than generating electricity with wind turbines (or other renewable resources) on land.” (Parentheses in complaint.)
The plaintiffs, which include two individuals, claim the state used a merger request from NStar to undermine the system and cut a deal for Cape Wind.
“The Commonwealth’s Department of Energy Resources (DOER) threatened to erect various regulatory roadblocks to the merger unless NStar executed a contract to buy electricity from Cape Wind on substantially the same terms and conditions that another of the Commonwealth’s utilities, National Grid, had agreed to several years earlier,” the lawsuit states. “That state action was preempted by the Federal Power Act, which prohibits states from regulating the rates and terms of wholesale electricity sales. Plainly, Massachusetts could not directly order NStar to contract with Cape Wind at a state-ordered price.”
The deal also violated the Commerce Clause, in that “the Commonwealth used its regulatory power over NStar to direct business to a favored in-state entity, Cape Wind, at the expense of competing out-of-state wind generators which could have generated the same electricity for a lower price,” according to the complaint.
The plaintiffs claim the deal will cost them and other consumers nearly $1 billion in increased energy costs over its life span.
They seek declaratory judgment declaring the contract null and void.
They are represented by Joshua Segal of Lawson and Weitzen.
The Nantucket Sound wind farm has been tremendously controversial in New England, splitting environmentalists who might be expected to support a clean, renewable energy source. Many, though, particularly yachters and boaters, say the enormous windmills will ruin the beauty of the Sound-and kill sea birds to boot.
According to the Cape Wind LLC website, it will be the first offshore wind farm in the United States, will produce more than 420 megawatts of power and will “reduce global warming greenhouse gas emissions by 734,000 tons per year.”
On Wednesday, the U.S. Court of Appeals for the District of Columbia rejected a challenge to the wind farm, finding that the turbines will not affect air navigation facilities of the FAA or disrupt local airspace.
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