The only thing green about Cape Wind is apparently the money it will take out of the pockets of Massachusetts employers already struggling with the highest electricity rates in the country.
The utility National Grid announced today that it has reached an agreement to buy electricity from Cape Wind for 20.7 cents per kilowatt hour, more than twice the cost of power generated from other sources. The price is guaranteed to rise 3.5 percent annually to account for inflation, eventually landing the cost at more than 35 cents per kwh, despite the fact that renewable prices have been declining overall.
National Grid estimates that its agreement with the proposed 130-turbine generating project in Nantucket Sound will add approximately .3 cents per kwh to the price of electricity in the first year. That would increase the electric bill of a medium-sized company by $50,000 to $100,000 annually.
These increases come in addition to the already approved rate hike, which will add approximately $2 billion dollars to the price of power by 2012.
AIM supports renewable power. But other forms of renewable power, including onshore wind, are far more competitively priced and would not burden the ratepayer as much as Cape Wind. Other methods generate far more clean power than offshore wind for the same money.
The National Grid deal is considered crucial for financing a project estimated to cost at least $2 billion. It must still be approved by state regulators.
The premium pricing comes despite $700 million in federal subsidies for the project.