AIM Appeal of Cape Wind Agreement Gains National Headlines

Posted by John Regan on Dec 14, 2010 9:20:00 AM

The filing of an appeal yesterday by Associated Industries of Massachusetts to the approval of a power-purchase agreement between National Grid and Cape Wind generated news headlines throughout the country, including an editorial in the Boston Herald saying that AIM deserves credit for speaking out on behalf of all ratepayers who will see increases in their bills because of the deal.

“Associated Industries of Massachusetts has earned a shout-out not just from the businesses it represents but from all ratepayers who’ll be hit by the unconscionable deal the state has struck with Cape Wind,” the Herald said in an editorial entitled AIM to Ratepayer Rescue.

The editorial concludes: “For business this isn’t a matter of turning down the thermostat or caulking windows, it’s a matter of survival - something the green brigade refuses to acknowledge.”

On New England Cable News, AIM Senior Vice President and Associate General Counsel Robert Rio said AIM appealed the power-purchase approval because it will increase electricity costs for employers who already pay some of the highest electric bills in the country.

The story also appeared in scores of newspapers, blogs and television news reports.

AIM argued in its appeal that approval of the National Grid/Cape Wind deal by the Department of Public Utilities (DPU) was “arbitrary, capricious,” an “abuse of discretion and not otherwise in accordance with the law.” AIM believes the agreement sets a dangerous precedent for allowing utilities to negotiate expensive power agreements outside of the competitive bidding process and to allocate the costs of those contracts unfairly to commercial and industrial customers.

The DPU approved the proposed power-purchase agreement between National Grid and the 130-turbine offshore Cape Wind project on November 22. It was the first such agreement ever approved under a provision of the Green Communities Act (GCA) allowing utilities to sign long-term contracts for renewable power directly with generators.

The legal challenge by AIM to the Cape Wind/National Grid contract is based upon three issues:

  1. The contract was not competitively bid.
  2. The amount of the Power-Purchase Agreement exceeds 3 percent of National Grid’s load.
  3. National Grid’s ratepayer allocation of the above-market costs of Cape Wind is inconsistent with the law and harms ratepayers on competitive energy supply.

Topics: Employers, Associated Industries of Massachusetts, AIM, Massachusetts economy, Massachusetts employers, Energy, Cape Wind

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