BOSTON (AP) | State lawmakers gave every Massachusetts utility the same order in 2008: Go buy more power from renewable energy sources.
But the state’s two largest utilities came back with vastly different deals - especially in price.
National Grid estimates its deal with the Cape Wind offshore wind project will cost ratepayers $1.2 billion above the projected market price of comparable energy by the time it’s done. Meanwhile, NStar says its contracts with three smaller land wind farms are a total of $111 million below market price.
The $1.3 billion gap has fired up Cape Wind foes, who’ve asked the state Department of Public Utilities to reconsider its approval of the National Grid deal.
“Cape Wind is just an unnecessary burden for ratepayers,” said Audra Parker of the Alliance to Protect Nantucket Sound.
But National Grid says its deal with Cape Wind, the nation’s first offshore wind farm, is a good price for its benefits, including a uniquely large size for a renewable power project, proximity to an energy-hungry coast, and the fact its 130 turbines are scheduled to soon go up in Nantucket Sound.
The utility also believes it’s impossible to meet the region’s ever-growing renewable energy mandates without Cape Wind and large-scale projects like it, said Ron Gerwatowski, deputy general counsel for National Grid.
“We have to step out and get projects like Cape Wind into the mix,” he said.
National Grid estimates the deal will cost the average residential ratepayer (618 kilowatt hours per month) $1.50 a month in the first year. “We really thought it was a small price to pay,” Mr. Gerwatowski said.
Cape Wind opponent Robert Rio of the Associated Industries of Massachusetts believes that estimate will prove far too low. He also said it doesn’t account for the effects on larger customers who will also absorb the tens of millions in annual above-market costs.
“Frankly, as a person who represents business, I find it insulting that they’re using some little homeowner [for comparison],” he said. “It ain’t a $1.50 a month to our members.”
The 468-megawatt Cape Wind project will cost $2.62 billion to build, according a Massachusetts attorney general’s office estimate. Developers say it will power 200,000 homes in average winds, but the project is still shopping half its power, and could be built smaller without another buyer.
Under a 2008 law, Massachusetts utilities must obtain increasing amounts of renewable power, and by 2025 it must make up 20 percent of their supply. The same law tries to make it easier for renewable projects to get financing by requiring utilities to seek long-term deals with them for at least 3 percent of their total demand.
The law requires the deals to be “cost effective.” State regulators made it clear when they approved the National Grid deal that didn’t mean cheapest, just a good price for the expected benefits, and Mr. Gerwatowski said National Grid chose Cape Wind from among of mix of higher and lower cost options.
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