In a year-end decision, the Massachusetts Supreme Judicial Court (SJC) approved a deal between Cape Wind and National Grid allowing National Grid to purchase, for 15 years, half the power generated by the controversial proposed wind farm. The deal was approved by the Department of Public Utilities (DPU) in 2010. Opponents of the deal asserted that the purchase price (18.7 cents per kilowatt-hour, which increases by 3.5% annually) was too high, primarily because DPU allowed National Grid to consider only in-state renewable energy sources when putting the contract out to bid.
The SJC deferred to DPU’s expertise in approving the contract and stated that even though lower-cost renewable energy alternatives may have been available, it was reasonable for DPU to consider other potential benefits the purchase would provide. Non-economic benefits cited by the SJC include Cape Wind’s location near an area that uses a lot of electricity and the “advanced state of the permitting process.” It’s unclear why Cape Wind’s permitting status is a benefit. Presumably, there are other potential renewable energy providers that are permitted to operate and, unlike Cape Wind, are actually up and running. It’s like hiring a limo driver who has a license – but no car – to drive your kids to the prom.
With this win under its belt, the main obstacles Cape Wind now faces are a pending federal court challenge and a needed FAA approval. While the death-by-a-thousand-cuts strategy of the project’s opponents is running out of cuts, market forces are asserting themselves. Cape Wind still needs to sell the rest of its energy to obtain financing for the project – not an easy task in the current financial climate.