Cape Wind has its PPA
Sometime today Cape Wind and National Grid are set to file a contract with the Massachusetts Department of Public Utilities for their power purchase agreement (PPA) that was announced on Friday.
The deal comes less than two weeks after federal approval of the project by the U.S. Department of Interior Secretary Ken Salazar and is the next big step on the way to completing the project first proposed nine years ago.
The call-in press conference to announce the contract prompted a couple questions that might have created a subtext that could have been "this isn't Rhode Island." State regulators there rejected a PPA between National Grid and Cape Wind recently.
"With the small scale of the Rhode Island project, there really is no comparison," said National Grid President Tom King. He also was disappointed Rhode Island chose to look only at the current price scenario in the middle of a recession. The power price there was 24.4 cents per kilowatt-hour.
Under the Massachusetts Green Communities Act, all of the investor-owned utilities are required to enter into long-term contracts to purchase at least 3 percent of their electricity supply from renewable generators. Beginning in 2013, National Grid would purchase from Cape Wind 50 percent of the wind farm's output including electricity, renewable energy certificates (RECs), and other potential market attributes for 20.7 cents per kilowatt hour. The companies said that price assumes existing federal tax incentives, would increase 3.5 percent per year during the 15-year term of the contract.
Based on its forecasts for electricity prices in 2013, National Grid projects this will translate to a total monthly bill increase of $1.59 for a typical residential customer. Cape Wind would be purchasing about 3 percent of its load from the wind farm.
Cape Wind President Jim Gordon said the remaining 50 percent of the 468-megawatt plant would be marketed to other IOUs and retail electricity sellers.
Gordon hopes to start construction later this year, but here's one hurdle he's cleared along the way.
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