Offshore Wind Wire

Days after National Grid agreed to purchase 50 percent of Cape Wind’s output, observers and opponents are gawking at the price of offshore wind.

The power purchase agreement — which can be seen here — was reached last Friday and submitted to Massachusetts state regulators yesterday.  The deal calls for National Grid to pay 20.7 cents per kilowatt/hour for Cape Wind electricity, beginning in 2013.  That price is scheduled to rise 3.5 percent each year during the 15-year contract.  The Massachusetts Department of Public Utilities must approve the contract, which is projected to raise the average monthly electricity bill for National Grid’s Massachusetts customers by $1.59.

Immediately after the deal was signed, Jay Fitzgerald wrote in the Boston Herald about “sky-high electric rates” and quoted an Oregon-based analyst saying “I’m glad it’s your electric bills and not mine.”  The Herald followed up today with further analysis and said “the numbers are eye-popping“.

In today’s article Fitzgerald wrote that “industry experts were stunned by the filing’s numbers,” although he only quoted the same critic from Oregon.

The Alliance to Protect Nantucket Sound, the leading anti-Cape Wind group, also latched onto the cost issue.  In a press release, the group said the higher rates would hurt Massachusetts residents and businesses.

“Much of the support for wind energy was based on the false assumption that offshore wind will lower electric bills,” the press release said.

On BrighterEnergy.org, James Cartledge highlights business opposition to the higher rates.

He quotes Robert Rio of the Associated Industries of Massachusetts calling the Cape Wind electricity “the most expensive renewable power imaginable”.

The coverage, however, was not all negative.  WBZTV.com wrote that Gov. Deval Patrick defended the power purchase agreement as a protection against spikes in natural gas prices.

A Reuters article also noted that the deal could become more attractive if the federal government taxes carbon emissions.

In Rhode Island, Gov. Donald Carcieri is supporting legislation that would allow power purchase agreements to bypass the Public Utilities Commission, according to a Recharge article from Richard Kessler.  In March, that commission rejected a PPA between Deepwater Wind and National Grid for offshore wind electricity at 24.4 cents per kilowatt/hour.