The state’s highest court this week rejected a wide-ranging challenge to a power contract between Cape Wind Associates and the utility National Grid.
In a pair of decisions, the Supreme Judicial Court sided with the state Department of Public Utilities, which last year approved the contract calling for Cape Wind to sell 50 per cent of the wind project’s power to the large utility that serves millions of consumers in Massachusetts and three other northeast states.
Cape Wind called the decisions a major legal win that will advance the prospects of the project, which it says will create up to 1,000 jobs. “It’s a major boost to the Cape Wind project,” said spokesman Mark Rodgers. “It’s a big day.”
The SJC’s unanimous decisions also will help boost the efforts to finance the project and meet a target of 2013 to begin construction, said Mr. Rodgers.
Cape Wind aims to build 130 wind turbines on Horseshoe Shoal in Nantucket Sound to produce up to 420 megawatts of power. Mr. Rodgers would not disclose the project’s cost, but one widely cited estimate put it at $2.6 billion.
But the head of an environmental group that was on the losing end of the SJC decisions predicted the project “will never be built.”
The SJC decisions “are moot because Cape Wind is facing insurmountable financial and legal challenges,” said Audra Parker, president and chief executive officer of the Hyannis-based Alliance to Protect Nantucket Sound.
It was joined in the legal challenges by Associated Industries of Massachusetts, New England Power Generators Association and TransCanada Power Marketing Ltd.
In November 2010, after lengthy hearings, the DPU approved a contract between Cape Wind and National Grid. The Alliance and others took a variety of legal challenges to a single justice of the SJC, who referred it to the full court.
Among them were assertions that the DPU’s decision violated the commerce clause of the U.S. Constitution and that its finding the Cape Wind project was “cost effective” was flawed. The Alliance and others have argued that much cheaper, “green” energy alternatives were available.
The court said the contract’s approval did not violate constitutional protections of interstate commerce just because it was limited to the Massachusetts utilities. It also said the DPU’s interpretation of “cost effective” need not be confined to the cost to produce the power alone.
Justice Margot Botsford, who wrote the court’s decisions, said the DPU’s “analysis was thorough. It [was] carefully considered, and in some cases adopted, counter arguments made by the interveners. It relied on a number of independent analyses and forecasts to reach its ultimate conclusion. The record contained sufficient evidence for a reasonable person to conclude that the benefits of [the power contract] outweighed its costs.”
In a second decision in the case, the court rejected the Alliance’s procedural challenge to the DPU decision refusing to reopen the written record in the case after it had issued its decision on the contract.
The massive wind farm project still faces a number of legal challenges, among them five lawsuits against various federal agencies, including the U.S. Department of Interior, Coast Guard, Fish and Wildlife, and Army Corps of Engineers. In addition, a federal appeals court earlier this year said the Federal Aviation Administration erroneously granted a “no hazard” designation to the project and must reconsider the proposal.
Ms. Parker, the head of the Alliance, also said the project won’t receive the financing necessary to be built, in part because it is two or three times the cost of alternative “green” energy producers.
Already, Massachusetts ratepayers face among the most expensive energy costs in the country, she said, and the Cape Wind project will further burden homeowners and businesses with “billions of dollars in excess surcharges.”
But Mr. Rodgers, the Cape Wind spokesman, shot back that the Alliance’s comments are fueled by a need to “get her donors to keep writing checks to her organization. It’s a single-purpose organization formed to oppose this project. And that’s what they do.”
He added that the “DPU said it has to look at the costs and benefits, and this project really does stand out in having unique benefits.”
No other wind energy project, he said, can provide the power, jobs and other benefits. He also said that while other offshore wind farms are in development, “we’re the only one that has this federal approval from the Interior Department, has a commercial lease and this state approval.”