Last week, two power companies, National Grid and Northeast Utilities, terminated their contracts with the developers of the controversial, $2.5 billion offshore wind-farm project known as Cape Wind.
Analysts immediately began speculating that the action taken by the two utilities, which cited missed deadlines contained in the 2012 contracts outlining this bold initiative as the reason for their decision to terminate, could put the future of the turbine project’s future in serious doubt.
We certainly hope they are right.
Indeed, while we’ve opined on numerous occasions that this state and this region, in their efforts to secure new sources of jobs and economic vibrancy, must aggressively pursue renewable-energy sources as one means to that end, we’ve come to acknowledge that, while Cape Wind might help the state accomplish those goals – that’s might – it will come at too steep a price.
That price, in the form of some of the highest prices for electricity ever negotiated, would certainly constitute a serious burden to both taxpayers and the state’s business community at a time when neither constituency needs another one.
We have said on a number of occasions that, while Massachusetts has made some progress in recent years to shed itself of that old ‘Taxachusetts’ moniker, it still has a lot of work to do in that regard.
From higher-than-average rates for unemployment insurance and workers-comp insurance to its highly regulated business environment, to high energy rates stemming from its location at the end of the supply lines, the Bay State has historically been a very expensive state in which to do business, and it still is.
And this is an extreme handicap at a time when the competition for businesses and jobs is truly global, and it becomes more intense with each passing year.
Now-former Gov. Deval Patrick made renewable energy one of the priorities of his administration, and he was right to do so. Such a philosophy makes a degree of sense from an economic-development standpoint (jobs) and an environmental one as well.
But renewable-energy initiatives often do not translate into what would be considered reasonable rates for electricity, and that is certainly the case with Cape Wind.
Officials leading that initiative are already making the case that missed deadlines with regard to the start of work on this project are the result of “extended, unprecedented, and relentless litigation by the Alliance to Protect Nantucket Sound,” a leading opponent of the project, and they will fight to see that the utilities hold off on voiding their contracts.
They face an uphill battle, and that’s a good thing for the Commonwealth.
Advances in the state’s renewable-energy and efficiency policies have lessened the importance of Cape Wind when it comes to the overall energy landscape, and the expensive power that it would produce would be a burden to the state’s business community as it strives to make a full recovery from the recession.
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