Dec. 29, 2011
WOODS HOLE, Mass. — The Massachusetts Supreme Judicial Court has no problem with the state-sanctioned power purchase agreement (PPA) between Cape Wind and the utility National Grid.
In a 34-page ruling, Justice Margot Botsford wrote that the PPA to buy Cape Wind power is consistent with state law, and that the state's Department of Public Utilities did a "thorough" review of the agreement. And just like the DPU, the SJC determined there is evidence that the deal is in the public interest. (Read case information from the Mass. SJC.)
"This decision provides a big boost for creating up to 1,000 jobs and providing Massachusetts with cleaner air, greater energy independence and a leadership position in offshore wind power," Cape Wind president Jim Gordon said in a statement.
The PPA has National Grid purchase 50 percent of Cape Wind's anticipated electricity output beginning in 2013. It has been controversial, mostly because of the cost. The agreement sets a rate of 18.7 cents per kilowatt-hour, which would increase 3.5 percent each year for the 15-year term of the contract.
Nationally, last year, the average retail price for electricity was 9.88 cents per kilowatt-hour, according to the U.S. Energy Information Administration, although prices vary greatly by state. National Grid estimates that the cost will translate to a total monthly bill increase of $1.59 for a typical residential customer.
Opponents of Cape Wind say the agreed-upon price is too high, and that National Grid should have expanded its search to find cheaper sources of renewable energy in other states in order to meet Massachusetts’ renewable energy requirements.
In a statement, Audra Parker, president of the Alliance to Protect Nantucket Sound, Cape Wind's primary opposition group, called the court decision "moot," because Cape Wind still lacks a key permit from the Federal Aviation Administration, it has been denied federal loan guarantees and it still does not have a second utility on board to buy the remaining 50 percent of the anticipated power.
"Today's ruling is a blow to ratepayers, businesses and municipalities," Parker wrote, "who are being asked to bear billions of dollars in new electricity costs when other green energy alternatives are available at a fraction of the cost. The good news is the increasingly clear reality that Cape Wind will never be built."
For several years Cape Wind was on a winning streak, garnering permit approvals and positive court decisions. But lately the effort to construct 130 wind turbines in Nantucket Sound has experienced some setbacks.
As Parker alluded, a key FAA permit recently was struck down by the federal courts, requiring the FAA to go back and reexamine how the turbines would affect aviation between Cape Cod and the Islands. Also, without a buyer for the remaining 50 percent of Cape Wind electricity, the project developers will have trouble attracting construction financing.
That said, after nearly a decade of negotiating the regulatory process, Cape Wind officials have given no indication that they're willing to give up the fight.
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