Mass. lawmakers offer possible lifeline for struggling Cape Wind 

Source: Ariel Wittenberg, E&E reporter • Posted: Tuesday, February 17, 2015

Don’t dig a grave for Cape Wind just yet. A new bill filed by Democratic leaders in the Massachusetts Legislature offers a glimmer of hope to the Nantucket Sound wind farm, which was dealt a major setback in January when two utilities terminated their contracts to purchase power produced by the project (Greenwire, Jan. 7).

Though some described that move as a death blow for the project that was once meant to be the country’s first offshore wind farm, a bill filed by Massachusetts House Speaker Pro Tempore Patricia Haddad (D) could potentially be Cape Wind’s saving grace.

The wide-sweeping bill meant to revamp state energy policy includes a provision that would require utilities to solicit competitive bids on long-term power contracts with offshore wind farms. The contracts would eventually have to amount to 8.5 million megawatts of power and last at least 15 years.

Supporters of the bill see it as a groundbreaking and crucial way to jump-start offshore wind development, which often has difficulty attracting investors due to the high upfront costs of installing wind turbines offshore.

Though the bill was written when Cape Wind’s contracts were intact and was intended to benefit subsequent projects, Haddad says there is no reason Cape Wind couldn’t benefit from the bill as written.

“I’m not sure what Cape Wind’s next move will be, but anybody who is developing an offshore wind piece, this bill is going to be for them,” said Haddad, who is second only to the speaker in the House hierarchy. “If Cape Wind wants to compete and they want to bring a lower price to the table, then they are going to be successful.”

Cape Wind has been coy about its next steps since two utilities terminated their agreement to collectively purchase more than 75 percent of the project’s power. Asked about Haddad’s bill, spokesman Mark Rodgers would not specifically address how his project might benefit from the legislation but commended the bill for recognizing “the vast clean energy resource Massachusetts has in offshore wind.”

“If adopted, this legislation would create a market for wind projects offshore Massachusetts going forward that would create jobs and deliver significant economic, energy and environmental benefits to the region,” he said.

Haddad’s bill is something of a reboot of another energy bill that stalled in committee last year. That legislation received widespread criticism from environmentalists because it required utilities to enter into long-term contracts with any renewable generators, including Canadian hydropower, which they worried would price out renewable energy projects with lower carbon emissions.

That original bill has been refiled in the Senate this session. And Rep. Antonio Cabral (D) has also refiled an amendment that he tried to tack onto last year’s energy bill that would include a separate offshore wind carve-out smaller than the one proposed by Haddad.

Of the three, Haddad’s bill has received the most interest and publicity in the state. Haddad conducted meetings with a variety of energy stakeholders before writing the bill, which also includes plans to convert old oil and coal plants into gas-fired power plants and to increase the state’s natural gas infrastructure.

Caitlin Peale Sloan, staff attorney for the Conservation Law Foundation, called Haddad’s bill “unprecedented and groundbreaking” for its offshore wind provision.

“There’s a lot of excitement about the offshore wind portion of the bill,” she said.

The bill has only recently been submitted, and its progress has been slowed by the recent record-breaking snowfall seen in Boston. It now moves to the Joint Committee on Telecommunications, Utilities and Energy, where a new chairman has yet to be selected due to the number of recent snow days.

The bill is not without controversy, and it will likely change shape by the time it reaches the full House floor. Both industry and environmentalists oppose a new tax that would be created by the bill and levied to help pay for more natural gas pipelines.

The New England Power Generators Association opposes many parts of the bill, including the offshore wind provision and the natural gas tax, because it cherry-picks industries to subsidize, association President Dan Dolan said.

“Everyone needs to take a very deep breath and not think that we can outsmart the market and somehow pick power generation that will cure cancer and save baby seals,” Dolan said. “History will show when we cherry-pick, we usually pick wrong.”

There has also been talk among industry leaders and legislators about adding language to the bill to exclude Cape Wind from benefiting from the offshore wind carve-out by restricting the power purchase agreements only to projects that won federal leases at competitive auction.

Haddad said she has hope the offshore wind portion of the bill can remain largely intact because the bill’s loudest critics so far have been upset about the natural gas tax. But she acknowledged it is too early to tell and that Cape Wind has long been controversial because of its proximity to Cape Cod.

“I feel very sad for Cape Wind because they worked so hard at offshore wind, but there were circumstances of that project that are not good, including that people can see it from shore,” she said. “Some of the other projects have more support because they are off the horizon.”

One of those projects comes from OffshoreMW LLC, a developer that recently won a federal competitive lease bid for an area off Massachusetts (Greenwire, Jan. 29). At the time, company President Erich Stephens said his interest in the area was largely driven by Haddad’s bill.

“Without this early sign of policy support for offshore wind from Massachusetts, we would likely not have made this and future investments in the Commonwealth,” Stephens said in a statement.