“Very bad news for Cape Wind. Very good news for Massachusetts ratepayers.”
That’s how one opponent of the proposed Nantucket Sound wind farm characterized the decisions by Northeast Utilities and National Grid yesterday to terminate their long-term contracts with the offshore wind farm. The two companies cited the fact that Cape Wind missed a December 31 deadline to obtain financing and begin construction, and chose not to put up financial collateral to extend the deadline.
This is one case of buyer’s remorse that will benefit virtually every Massachusetts employer and homeowner who buys electricity – the contracts would have placed ratepayers on the hook to buy Cape Wind power at an average of 25 cents per kilowatt hour over 15 years, more than twice the rate of power generated by on-shore wind facilities.
AIM and its 4,500 member employers, who have long opposed the contracts, strongly endorse the decisions by the two power companies to terminate their Cape Wind deals.
“Northeast Utilities and National Grid deserve tremendous credit for taking actions that will save customers billions of dollars that would otherwise have been spent buying electricity at the highest power price ever negotiated in Massachusetts,” said John Regan, Executive Vice President/Government Affairs at AIM.
“AIM has consistently supported economically beneficial renewable power projects that provide energy to commercial, industrial and residential customers at reasonable rates. The association opposed the Northeast Utilities and National Grid deals with Cape Wind - and challenged one in court – because the staggering costs of the project would have saddled ratepayers for decades to come.
“AIM thanks both Northeast Utilities and National Grid for their leadership in protecting the interest of ratepayers while committing to vibrant clean energy programs. “
Northeast Utilities and NSTAR agreed to buy 27.5 percent of Cape Wind’s production amid withering pressure from the Patrick Administration during regulatory review of the two companies’ proposed merger. National Grid had previously signed on to purchase 50 percent.
AIM believes Cape Wind is symptomatic of state energy policies that have failed to live up to their promise while driving up electric bills for both employers and homeowners. The association believes that energy initiatives must benefit customers, who already pay some of the highest electricity rates in the country:
- Long term contracts must be competitive bid. There should be no option for individual negotiations outside the bidding process.
- The allocation of above market or below market costs of the long-term contracts needs to be fairly distributed across customer classes with no one class subsidizing the others.
- Cost-effectiveness of long-term contracts should be defined clearly.