PrintJuly 13, 2010
Cape Wind Contract Challenged by Mass AG
The controversial Cape Wind project, touted by its developers as "America's First Offshore Wind Farm on Nantucket Sound" has hit another hurdle: Massachusetts Attorney General Martha Coakley.
According to a Boston Globe article dated July 9, Coakley is "demanding that Cape Wind's developers disclose cost and profit estimates for the energy project and is questioning whether power from the proposed Nantucket Sound wind farm would be a good deal for consumers."
Why the inquiry now? It seems that the recently established wholesale power purchase agreement between seller Cape Wind and buyer National Grid (NG) might be a bit "rich" at 141.8% of the going retail price NG charges its customers.
Coakley concluded that "Neither party had an incentive to bargain for terms that yield cost-effective terms for ratepayers." Details are thin but if the Massachusetts Department of Public Utilities (MDPU) allows NG to simply mark-up and resell electricity purchased at a premium, one could argue that NG and the MDPU sacrificed ratepayers to the Green agenda. In fairness, National Grid may have an excuse. Utilities under Massachusetts' jurisdiction are required to supply ever increasing volumes of electricity generated by "renewable sources". Apparently cost is no object, therefore the MDPU is practically obligated to approve skyrocketing prices. Note that the droppings under this tail chase always accrue to ratepayers.
Coakley gave the Cape Wind developers 3 days to respond. If they don't, Coakley asked public utility officials in Massachusetts to bar the developers from challenging any independent estimates she might use to evaluate the contract.
In a related July 12 article from the Boston Herald, it's noted that, "Critics say it [Cape Wind project] could cost as much as $1.6 billion. One third of the total amount would be paid by taxpayers in the form of clean-energy subsidies."
In yet another July 12 article from the Herald, Cape Wind is reportedly objecting to the Coakley demand. Quoting from the article, "....Cape Wind lawyer David S. Rosenzweig argued that Massachusetts Attorney General Martha Coakley's request for more information on Cape Wind's costs, profits and investors is irrelevant and inconsistent with state and federal laws."
Let me get this straight: even as a one-third "investor" in Cape Wind, say $533 million or so, taxpayers have no right to examine the prospectus?
Clearly the Coakley demand struck fear in the hearts of wind farm developers everywhere: her inquiry could change the dynamics of how renewable power purchases are made and/or approved. Under the light-of-day, one wonders how many grossly expensive renewable projects would survive legitimate scrutiny.
