Cape Wind project faces more challenges

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December 13, 2010, 7:45 pm
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(NECN: Peter Howe, Boston) Nine years into the approval battles for the Cape Wind project in Nantucket Sound, the project is now facing four new challenges in the state's highest court.

Associated Industries of Massachusetts, the 7,000-member business group that is the state's biggest business lobby, and three other groups asked the Supreme Judicial Court Monday to throw out a contract the Department of Public Utilities approved last month for utility giant National Grid, on behalf of its basic-service customers, to buy half of the electric output of the 130-turbine project.

AIM general counsel Robert J. Rio says for his business members, most of whom buy power from competitive suppliers rather than from the utility directly, stand to be whacked with millions of dollars in increased costs. "They're not receiving power from Cape Wind, yet they have to pay for Cape Wind, and we think that is fundamentally unfair,'' Rio said.

Compared to current rates, it's estimated that Cape Wind power -- at 18.7 cents per kilowatt-hour, rising 3.5 percent annually -- will cost about $2 billion more than conventional power under the National Grid contract. But supporters say it's likely fossil-fuel prices could soar, making Cape Wind competitive or even a bargain, and it delivers many other benefits that justify the cost, including bolstering a small but growing Massachusetts wind-power sector.

Besides the increase of costs being unfairly shifted to customers who aren't buying Cape Wind energy, AIM contends National Grid is buying more electricity from Cape Wind than state laws allow, and also engaged in the equivalent of a no-bid contract with Cape Wind rather than going to market with a request for proposals from renewable-energy suppliers inside and out of Massachusetts. "We believe that National Grid should have really searched out cheaper renewable power before they went with Cape Wind,'' Rio said.

Along with Cape Wind, other groups asking the SJC to overturn the DPU's approval of the Grid-Cape Wind contract are TransCanada, a company that owns wind farms in Maine and elsewhere and says it was shut out of bidding to supply National Grid; the New England Power Generators Association; and the Alliance to Protect Nantucket Sound, a group that has been battling the offshore wind farm plan for nearly a decade.

"I think it's one more bump in the road, and not a surprise,'' said Dennis Duffy, vice president of Cape Wind. "We are very confident that the DPU did a very thorough job, and their decision will be upheld.'' On the issue of cost premiums being put on entities that never buy power from the Nantucket Sound turbines, Duffy said, "The market price for energy is extremely volatile, and at different times over the life of the contract our price might be higher, sometimes lower at other times.''

Sue Reid, head of the Conservation Law Foundation's Massachusetts office and an outspoken backer of Cape Wind, said all the objections AIM and other groups are raising have already been brought up and addressed through a nearly-400-page ruling issued by the state DPU. "We're seeing the same baseless claims being brought forward now by AIM and others,'' Reid said. "We do not see these challenges as a significant hurdle to this project. The power purchase agreements and then the DPU's ensuing decisions are virtually bulletproof in terms of the follow-on appeals process.''

Duffy added that "of judicial decisions involving this project, we've prevailed on all 11. We're 11-0. That's Patriots-like," he quipped, referring to the New England NFL football team's winning streaks.

Rio stressed that unlike some critics, AIM has no aesthetic objections to Cape Wind's location in 24 square miles of water in between Martha's Vineyard, Nantucket, and the coast from South Yarmouth to Cotuit on Cape Cod. "We have absolutely no problems with Cape Wind" as an energy-development project in its own right, Rio stressed. "We've never taken a position on their location,'' nor has AIM signed on to lawsuits challenging environmental approvals of power-line facilities.

AIM's concern is just how much premium-priced Cape Wind power will harm the state's economy, business climate, and job creation.

"Electricity is near the top of our members' concerns as a high cost of doing business in Massachusetts,'' Rio said. "It's always one two or three of the biggest impediments to expanding in Massachusetts. This would make that worse.''

Going on nine years into the Cape Wind approval saga, there's no clear deadline for the state's Supreme Judicial Court to decide go or no go based on the DPU rate approval challenge. Project backers still hope to start construction, creating as many as 1,000 jobs, sometime next year.

With videographer Sean G. Colahan and video editor John J. Hammann

Tags: Peter Howe, Cape Wind, National Grid, wind power
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