Judge Has Harsh Words for Cape Wind Foes

A federal court judge had harsh words last week for Cape Wind foes as he handed down the 26th legal win for the Massachusetts offshore wind farm project.

The decision marks the latest round in a more than decade-old battle against the 454-MW project, with opposition led by wealthy Cape Cod property owners, including energy industrialist Bill Koch.

Federal Judge Richard Stearns dismissed all claims made by the Alliance to Protect Nantucket Sound and other project opponents, saying “there comes a point at which the right to litigate can become a vexatious abuse of the democratic process.”

While many of the earlier lawsuits involved permitting, aesthetics, safety and the environment, this one went after the wind farm’s 15-year power purchase agreement with NSTAR, the local utility. The opponents filed suit against Cape Wind, NSTAR and the Commonwealth of Massachusetts.

Stearns described the project opponents as an “obdurate band of aggrieved residents of Cape and the Islands,” who in the past wore the “mantle of environmentalism,” but in this legal proceeding “doffed their green garb and draped themselves in the banner of free-market economics.”

The lawsuit stemmed from NSTAR’s contract to purchase a portion of the wind farm’s power after it is built. The utility reached the agreement with Massachusetts officials in 2012 as part of its then-pending merger with Northeast Utilities. The utilities had to show that the merger would offer “net benefits” to ratepayers to receive Massachusetts approval.

But the opposition group alleged that the deal was the result of “secret negotiations” with the state which “used its influence over NSTAR’s merger request to bring about NSTAR’s entry into an above-market wholesale electricity contract with Cape Wind, a politically favored renewable energy project in Massachusetts.”

In particular, the opposition said that the activity intruded on the Federal Energy Regulatory Authority’s jurisdiction to regulate wholesale electric energy prices. The group also argued that the deal violated the U.S. Commerce Clause by preventing competition for the contracts from out-of-state generators.

The U.S. District Court (Barnstable, Mass.) rejected all claims on grounds that states have immunity from being sued for past actions in federal court. The court also rejected the premise of lawsuit, saying it was “misleading and ultimately untrue” that the state forced the contract on NSTAR.

Jim Gordon, Cape Wind president, said that the victory will provide “further momentum for Cape Wind to secure project financing and produce the energy, economic and environmental benefits to the region and the United States by launching a domestic offshore wind industry.”

George Bachrach, president of the Environmental Leagues of Massachusetts, said that the project opponents “have just been using the courts to delay this important project and to try to disrupt their efforts at securing financing; it is gratifying to see, for the 26th time, their lawsuit get rejected.”

However, the Alliance to Protect Nantucket Sound said it lost based on “a legal technicality that does not address our claim that state regulators acted illegally.” In a statement on its website the group added that it plans to appeal this ruling “on behalf of Massachusetts’ businesses and consumers, who would be forced to pay nearly one billion in additional electricity costs to cover the exorbitant cost of this deal.”

Cape Wind plans to sell the bulk of its power under long-term contract to NSTAR and National Grid, another utility that operates in Massachusetts. The Massachusetts Department of Public Utilities has concluded that the contracts will increase customer bills 1 to 2 percent. However, Cape Wind also frequently points out that the project will act to suppress prices on the wholesale spot market by supplying energy when the grid is under the most strain. This could mean that the project will ultimately ease consumer costs.

The project expects to begin construction shortly after completing its financing. It hopes to be the first utility-scale offshore wind farm built in the United States.

Lead image: Gavel via Shutterstock

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Elisa Wood is a long-time energy writer whose work appears in many of the industry's top magazines and newsletters, among them Renewable Energy World and Platts. She serves as chief editor of EnergyEfficiencyMarkets.com. Her work has been picked up by the New York Times, Reuters, the Wall Street Journal online, Utne, USA Today and several other sites. She is author of the report "Think Microgrid: A Guide for Policymakers, Regulators and End Users." See more of her work at RealEnergyWriters.com.

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