Cape Wind Sees a Potential 27.5% Deal.
Cape Wind, U.S.’s first federally-approved offshore wind farm, received some good news on Wednesday. NStar and Northeast Utilities made a deal to merge and buy a decent amount of power from the wind farm.
A recent deal with National Grid had been positive for Cape Wind as the farm sells 50% of the energy it produces to them. However, their no-bid contract to put up over 100 wind turbines has not been reaching it’s potential without sale for the remaining power the farm produces. The electricity price the Nantucket Sound wind turbines have requested is above market costs, but the push for cleaner sources of energy remains.
Governor Deval Patrick and Attorney General Martha Coakley are two individuals who are supporting the Cape Wind farm. They believe in cleaner sources of energy and that the turbines power should eventually result in savings and efficiencies that would be advantageous to ratepayers.
Richard Sullivan, Secretary of Environmental Affairs, said they would buy 27.5 percent of the power produced by Cape Wind and set a four-year freeze on the distribution rates. The deal will also secure jobs for Massachusetts utility workers and provide a one-time $21 million rebate to ratepayers. This averages out to approximately $12 to $15 per customer.
NStar and Northeast Utilities have been deadlocked since October of 2010. The companies have an electric and gas, 3.5 million customer base from Westport, Conn., to Pittsburg, N.H. The merger would make them the largest utility in the area and was set to cost $17.5 billion.
Cape Wind is hoping to obtain financing for construction, but some companies such as NStar have resisted buying from them due to the high cost. This contract however, will allow their new project to take flight.
Gov. Patrick said “What we have today is a landmark agreement. It will protect ratepayers from rate increases now and into the future. It’s good for ratepayers, the environment and for our economy.”
Now, officials in Connecticut are taking the time to review the merger and it’s specifications before granting final approval. They expect to respond by April while Massachusetts officials will issue their ruling upon hearing Connecticut results.
So until April, Cape Wind will be anxiously awaiting the results.
Julie MacKenzie has written 208 articles on EpostMedia.
