Deval Patrick’s Shift on Turbine Plans Will Not be so Friendly to Power Users (USA)

A broken campaign pledge by Gov. Deval Patrick could end up costing Massachusetts ratepayers big bucks if yet another massive wind farm is built off the coast of Martha’s Vineyard.

When he first ran for governor in 2005, the then-relatively unknown Patrick broke out of the Democratic pack by endorsing the controversial Cape Wind project.

But Patrick’s support came with a little-noticed catch: He said Cape Wind’s developer should compromise by agreeing to a 10-year freeze on electric rates once the 130-turbine wind farm was “up and running.”

“And I expect to find and reach that compromise with the developer as governor,” Patrick was quoted as saying by Cape Cod Today in October 2005. The Providence Journal also reported on then-candidate Patrick’s “rate freeze” vow.

But five years later, Patrick’s Department of Public Utilities approved a 15-year Cape Wind rate deal with 3.5 percent annual increases – on top of a starting rate that’s more than twice the current cost of electricity generated by fossil-fuel generated power plants.

Bob Keough, a Patrick administration spokesman, said annual rate increases are now standard in most offshore wind projects, both here and elsewhere.

“This was five years ago,” Keough said of Patrick’s rate-freeze pledge. “It was not clear at the time how contracts would be structured.”

Now Deepwater Wind is proposing a massive 200-turbine, offshore wind farm in federal waters southwest of Martha’s Vineyard – and its owner says he’s going to seek a similar rate deal as Cape Wind.

While Deepwater Wind plans to ask for a starting rate price a little below Cape Wind’s beginning rate, the New Jersey developer also wants annual increases similar to what Cape Wind will get.

“That type of escalation is not unusual,” Bill Moore, the CEO of Deepwater, told the Herald.

Moore said his firm has already submitted rate bids to Nstar, the Bay State’s second largest electric utility, which is now reviewing clean-energy rate proposals submitted by various firms.

With a construction price tag of about $2 billion, Cape Wind’s rate contract with National Grid – which is buying half of the wind farm’s electricity – is expected to cost ratepayers about $2.7 billion over 15 years.

With a construction price tag of about $4 billion to $5 billion, Deepwater’s final rate deal with New England utilities could financially dwarf the Cape Wind deal.

Critics say Patrick should have held the campaign-pledge line with Cape Wind, but now it’s too late for Deepwater and other future offshore wind farms.

“It shows they promised lower prices, and we’re not getting lower prices,” said Bob Rio, a senior vice president at Associated Industries of Massachusetts, a business group that has been a harsh critic of Cape Wind’s costs.

Keough said Cape Wind and other future offshore wind projects will have stable prices over the years, compared to volatile price changes associated with fossil fuels.

By Jay Fitzgerald (bostonherald)

[mappress]

Source: bostonherald, December 21, 2010