The Cape Wind offshore wind project moved one big step closer to construction yesterday when the Massachusetts Supreme Judicial Court (SJC) affirmed the MA Department of Public Utilities’ (DPU’s) finding that the project’s costs are reasonable in light of the many benefits it will bring.

Massachusetts’s highest court upheld the November 2010 decision of the DPU, which approved a critically important contract between Cape Wind and National Grid in which the electric utility agreed to purchase half of Cape Wind’s output. Cape Wind opponents had appealed the DPU’s decision— the latest in an endless stream of ill-fated maneuvers intended to block the nation-leading clean energy project from being built.

CLF intervened in the appeal proceeding with fellow environmental groups NRDC and Clean Power Now, making the case that the DPU’s extensively-researched decision showed clearly that Cape Wind’s benefits would outweigh its costs. Among these benefits is the project’s close proximity to areas of high electricity demand, which gives it logistical advantages over obtaining power from more distant energy projects that have been proposed.

The High Court’s validation should make it easier for Cape Wind to secure a buyer for the other half of the wind farm’s output and attract project investors to help finance construction. When built, after more than a decade of exhaustive reviews, Cape Wind will be the nation’s first offshore wind project.

Encouraged by yesterday’s decision, Jim Gordon, president of Cape Wind, spelled out some of the benefits Massachusetts residents could anticipate when Cape Wind is built, including, “creating up to 1,000 jobs, providing Massachusetts with cleaner air, greater energy independence and a leadership position in offshore wind power.”

We at CLF say, “Bring it on…not a moment too soon!”

Map of Northeast Energy Link (potential route in yellow)

Earlier this week, National Grid, Emera, and First Wind announced preliminary plans for a major new transmission project between northeastern Maine and Massachusetts – the Northeast Energy Link (NEL).  The financing structure for the project, known as “participant funding,” is similar to the structure that federal regulators approved for the Northern Pass project in 2009.  NEL would consist of 220 miles of underground, high voltage direct current (HVDC) transmission lines, apparently to be sited in existing rights of way and transportation corridors, that would deliver 1,100 megawatts of power from future wind projects in northern Maine, as well as additional imports from Canada, to southern New England. National Grid and its partners have apparently found a way to make the economics of burying lines in already disturbed corridors work.  This development deeply undermines the continued refusal of the proponents of the Northern Pass project, despite CLF’s and others’ repeated requests, to consider the same approach.

NEL is an intriguing proposal, particularly because it emphasizes New England-based wind resources. As with Northern Pass, the proposal warrants thorough review through robust, comprehensive permitting processes.

More immediately, the proposal underscores the urgent need for the regional energy study CLF and others are requesting within the Northern Pass permitting process.  There simply is no comprehensive plan in place addressing the best approaches for facilitating imports of Canadian power, if needed, and for adequately connecting homegrown renewable resources in remote areas to customers in southern New England.  With no plan, all we can do is react, piecemeal, to each private proposal that comes along.  Our energy and environmental agencies should be assessing the need for new transmission projects and then should consider only the best approaches that prioritize energy efficiency, minimize environmental impacts, reduce our reliance on the dirtiest power plants, and provide real public benefits. 

The recent delays in the Northern Pass review mean that the U.S. Department of Energy has a golden opportunity to help develop a regional plan, along with other stakeholders in the New England states and elsewhere in the Northeast.  CLF-NH Director Tom Irwin and a number of the other organizations that joined our motion to DOE seeking such a study make the case on the op-ed page of today’s Concord Monitor.  You can access the op-ed here.

Earlier today in Rhode Island, the Public Utilities Commission (PUC) approved the Deepwater Wind/National Grid Power Purchase Agreement (PPA) for the construction of an eight-turbine wind farm in Block Island Sound, denying CLF’s Motion to Dismiss.

Here’s what CLF’s Rhode Island Advocacy Center Director Tricia Jedele had to say about the decision:

Today’s ruling was inevitable, a result dictated by the legislature in a law defined so narrowly that it could have only one outcome. Unchallenged, this law and the accompanying PUC decision set precedent that will only undermine the efforts to build a future for renewable energy in Rhode Island. The failure to allow the PUC any discretion in its decision-making is the very basis of CLF’s Separation of Powers argument, which we are likely to appeal to the Supreme Court.

The Deepwater Wind project in Block Island Sound first met with problems in April 2010 when its Power Purchase Agreement (PPA) with National Grid was rejected by the PUC on the grounds that it was not commercially reasonable. Rather than appeal the decision, Deepwater, with the support of the Governor and the legislature, sought to do an end run around the review process and rewrite the rules to produce a different outcome the second time around. CLF, a longtime champion of renewable energy done right, was one of the first to challenge the moves as unlawful, unfair and a terrible precedent. CLF contended that the amended law was designed to favor one project and one developer, creating an unlevel playing field that would make it impossible for developers to compete successfully for future projects.

“Renewable energy is too important to this state to do it in a way that could threaten its chances for success,” Jedele said at the time.

In July, in advance of a second review of the PPA required under the amended law, CLF filed a Motion to Dismiss, arguing that the PUC should not review the amended Power Purchase Agreement because the law violates the Constitutional doctrine of separation of powers, and the provision which requires that “all laws be made for the good of the whole.” CLF also argued that even if the PUC were to proceed, it could not review the PPA because the doctrine of res judicata bars litigation of a claim that has already been litigated between the same parties.

In response to objections regarding the cost of Cape Wind, CLF and 12 other organizations issued the following statement:

The news this week that National Grid has officially filed its contract proposal with Cape Wind is great news for everyone in our state who breathes the air and believes we need to reduce our dependence on foreign oil and fossil fuels in general. Any estimate of the real costs of Cape Wind must factor in the economic, environmental and public health benefits to consumers and the Commonwealth over the long-term. In addition to knowing how much the power from Cape Wind will cost, the public should also know how much it will save them. To accurately estimate the value of our investment in Cape Wind, we can’t just focus on short-term increases to electric bills – pennies per day, on average – but must consider the savings over time.

By making a 15-year commitment to supply customers with clean wind power, National Grid and Cape Wind together are taking an essential step toward bringing the nation’s first offshore wind project to life while delivering substantial economic and environmental rewards. As the contract goes through rigorous public scrutiny, we call upon the public and state decision-makers alike to ensure that it is compared to other electric power agreements on an apples-to-apples basis that fully credits the expected benefits.  These include:

▪  Because Cape Wind’s fuel is free, the long-term power purchase agreement can – and will – ensure price predictability over the long term, moving consumers off the volatile fossil fuel price roller coaster.

▪  The project’s zero fuel cost means that when the wind blows, Cape Wind will be first in line to deliver power to consumers – forcing the most expensive polluting fossil fuel-fired power plants to run less, reducing the market price for electricity and saving customers millions of dollars.

▪  The contract price, initially set at 20.7 cents per kilowatt hour, is an “all-in” price that includes not just the price of the electricity but also the transmission, renewable energy incentives that are required by law, the project’s capacity to contribute to the regional electric supply, and other environmental benefits.  It is inaccurate to compare this price to the stand-alone price of traditional electricity.

▪  Any comparison of Cape Wind’s contract price to the price we currently pay for traditional power must take into account the extraordinary environmental and public health costs of ongoing reliance on fossil fuels – including the costs of addressing the growing oil drilling catastrophe in the Gulf, increasing climate change impacts, and air pollution from coal plants that worsens lung and heart conditions.

▪  By making long-term price commitments, Cape Wind and National Grid are placing the risk of any increased development cost squarely on the shoulders of Cape Wind, not ratepayers.

▪  Cape Wind will bring significant economic development opportunities to the Commonwealth, from quality construction jobs to ongoing maintenance and operation, and will propel Massachusetts to the national forefront of offshore renewable energy development.

Contact: Sue Reid, CLF Senior Attorney (617) 850-1740, sreid@clf.org
Karen Wood, Director of Communications (617) 850-1722, kwood@clf.org

Today marks a critical milestone for the 130-turbine Cape Wind offshore wind energy project as the project has reached an agreement with electric utility National Grid, in consultation with the Massachusetts Department of Energy Resources, to negotiate a long-term commitment for the purchase of the project’s power. Cape Wind is one of New England’s most promising solutions for addressing climate change and reducing the region’s dependence on polluting fossil fuels.

“By committing to ensure that Cape Wind’s emissions-free energy will be delivered to tens of thousands of Massachusetts homes and businesses, Cape Wind, National Grid and the Patrick Administration are leading the way to a clean energy future,” said CLF President John Kassel.

CLF has been working across New England for more than fifteen years to promote long-term commitments for the purchase of renewable energy, like the one that is now expected for Cape Wind. Such agreements often provide critical support for the financing of renewable energy projects while also providing stable energy prices to electric customers for years to come, taking energy bills off the fossil fuel roller coaster.