Massachusetts Approves Cape Wind / NSTAR Power Purchase Agreement
Monday, November 26, 2012
November 26, 2012
BOSTON, MA – Cape Wind secured another major milestone today with the approval by the Massachusetts Department of Public Utilities (DPU) of the 15-year Power Purchase Agreement (PPA) with NSTAR to buy Cape Wind’s energy, capacity and renewable energy credits.
Cape Wind President Jim Gordon said, “This decision helps secure the position of Massachusetts as the U.S. leader in offshore wind power, launching a new industry that will create jobs, increase energy independence and promote a cleaner and healthier environment. With this decision, Massachusetts electric consumers have secured an abundant, inexhaustible, and clean energy resource that provides price stability and avoids all of the external costs of fossil fuels. Finally, our region will no longer be at the end of the energy pipeline, by harnessing an endless supply of offshore wind power, we will be producing homegrown and clean energy right here.”
The NSTAR / Cape Wind PPA is for 27.5% of Cape Wind’s power. In December, 2011, the Massachusetts Supreme Judicial Court unanimously upheld the DPU’s approval of Cape Wind’s PPA with National Grid for 50% of Cape Wind’s power.
Theodore Roosevelt IV, Managing Director of Barclays and Cape Wind’s Financial Advisor said, “Taken together, these two PPAs provide Cape Wind with the critical mass to continue securing project financing.”
Cape Wind President Jim Gordon added, “We are very pleased with the favorable reception we have been experiencing from the financial community and this approval of our PPA with NSTAR will further help Cape Wind secure financing and deliver all of the public benefits this important project will provide.”
Extracts from the DPU Order approving the Cape Wind / NSTAR PPA:
“Accordingly, we conclude that the attributes of the Cape Wind facility, when considered in the aggregate, remain unique among Section 83-eligible resources and will provide benefits to NSTAR Electric ratepayers that far exceed those that could be provided by other potential Section 83 contracts. The critical unique attributes of the Cape Wind facility relate to its size, capacity factor, location on the regional transmission system, and stage of development.”
“Accordingly, as we concluded in D.P.U. 10-54, at 229-230, the Cape Wind facility will produce far greater benefits in terms of its: (1) contribution to narrowing the projected gap between supply and demand of renewable resources; (2) contribution to compliance with GWSA emission reductions requirements; (3) contribution to fuel diversity; (4) price suppression effects; (5) ability to act as a hedge against future fuel price increases and volatility; (6) contribution to system reliability; and (7) ability to moderate system peak load. As discussed below, the value of the Cape Wind facility as compared to alternative Section 83-eligible resources is further enhanced when these benefits are considered in combination with the facility’s favorable location on the regional transmission grid and advanced stage of development.” p.150
Link to the DPU Order:
Cape Wind is America’s first offshore wind farm to secure Federal and State approval and to be issued a lease to operate by the Federal Government. Cape Wind will create jobs and promote greater energy independence and a cleaner environment. Cape Wind will also establish Massachusetts as a leader in offshore wind power. For more information visit: www.capewind.org.