In a ruling issued by the Massachusetts Supreme Judicial Court (SJC), the power purchase agreement between Cape Wind and National Grid has been upheld.
The ruling is a win for offshore wind developer Cape Wind Associates as it continues to press forward with the development of America's first offshore wind farm. 10 year saga to for the company's Cape Wind offshore wind project.
Originally signed in May 2010, the PPA was approved by the Massachusetts Department of Public Utilities (DPU) in November 2010. Under the terms of the agreement National Grid committed to purchase half of the projected output from the proposed 420 MW offshore wind farm.
However, the DPU decision came under fire by trade groups and Cape Wind's long time opponent, the Alliance to Protect Nantucket Sound (Alliance). Among a slew of grievances, opponents claimed the PPA will result in rates much higher than other renewable energy options.
National Grid concedes that rate payers will be affected by the PPA, but the utility claims that over time the Cape Wind project will create a price advantage over conventional power sources.
In the original agreement National Grid estimated that residential rates would increase an average of $1.59 a month. In the first year of delivery the utility has agreed to pay 20.7 cents per kilowatt-hour (kWh) for the wind power with the price increasing 3.5% each year for the 15 year lifespan of the agreement.
Multiple claims were filed, challenging the DPU approval; these complaints ultimately led to a case opened in the SJC in September. Three months later, Justice Margot Botsford ruled to "uphold the department's conclusion that approval of the contract was in the public interest."
On the issue of how rate payers would be affected by the agreement, Justice Botsford ruled, "the record contained sufficient evidence for a reasonable person to conclude that the benefits of PPA-1 outweighed its costs."
Alliance was quick to respond to the Court's decision. In a two sentence press release President and CEO, Audra Parker, said the "ruling is a blow to ratepayers, businesses, and municipalities 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." She then claimed, however, that the decision was "moot" as "the increasingly clear reality [is] that Cape Wind will never be built."
In what has become a ten year saga, this ruling represents another positive step forward for Cape Wind and moves the project closer to construction phase. Cape Wind President Jim Gordon said the ruling "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."
However, it remains to be seen if and when the project will break ground. In April 2011, the U.S. Department of Interior (DOI) announced the Bureau of Ocean Energy Management, Regulation and Enforcement's (BOEMRE) approved the Construction and Operations Plan (COP) for the Cape Wind Energy Project.
At that time the DOI claimed the project could begin construction as early as fall 2011. As we enter 2012, construction has not begun. And, despite the approval of its PPA with National Grid, Cape Wind has yet to secure a buyer for the other half of the wind farm's output.
Image Credit: Andy S-D via Flickr
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