CAPE WIND'S LACK OF DISCLOSURE
HONEST MEN HAVE NO FEARS
There is a fundmental inequity in the Cape Wind review process. Cape Wind's CEO, Jim Gordon, loves more than just privacy; he thrives on secrecy. He wants to seize the heart of Nantucket Sound, twenty-five square miles, for his personal gain and he wants to force a million or so Massachusetts electric customers to pay more for their electricity so that he may profit, make more than the two hundred million dollars he has already made. But, he will tell us nothing about the details of his deal to build Cape Wind.
For five years he claimed he would be using wind turbines that had been discontinued by their manufacturer. Now he claims he will be using another manufacturer's turbines but we do not know if there is a purchase agreement. He claims to have kept fastidious wind data records gathered at his data tower in Nantucket Sound, but he will not make his wind data public. He claims he is easily able to finance the Cape Wind project, but he will not say who will finance it or how - whether debt or equity or a mix of the two.
While the Massachusetts Department of Public Utilitiess plods through the process of reviewing and either approving or denying the power purchase agreement Cape Wind and National Grid have presented we are able to see portions of the draft agreement, but financial particulars are left hidden from the public. The public domain will be the site of Cape Wind and the public process of the DPU will be what determines if electric customers are forced to pay Gordon's rates, but he will not say how much he expects to profit from the process. National Grid is a publicly traded corporation so every detail of their finances is available for review by the public. Not so Cape Wind Associates LLC. It is a private entity and is not subject to very much disclosure, even though all of its income and value derive from public process.
This is similar to the situation in the nineteen nineties when the Boston press decided to go on a tear about salaries and other compensation for executives at the Boston Edison Company. By coincidence, it was at approximately the same time that Boston Edison was saying no to a proposal for a power purchase agreement from Jim Gordon whereby Edison would have paid an above market rate for electricity generated by two power plants that Gordon owned. Of course, it was easy for the Boston Globe to discover how much Edison executives were paid because Edison was a publicly traded company. Gordon's Energy Manangement LLC was not, is not to this day.
If Jim Gordon is being straight with us about his project and its potential, why does he insist on so much secrecy? How much money is he hiding? How much is he hiding of his potential earnings and our potential costs? Is he afraid that if we knew the whole truth he would be dead in the water, so to speak? Who are his partners, or who will they be?
While National Grid, as a publicly traded corporation, must make its financial information publicly available, including costs, profits and executive compensation, Cape Wind Associates, LLC is under no such burden. And, National Grid is limited to a maximuim profit of just over ten percent on the electricity they transmit plus some additional mark-ups for renewable energy. But their bottom line has clear upper limits. Not so Cape Wind. The rate paying public can easily discover how much National Grid would make under its power purchase agreement with Cape Wind, but no additional information about Cape Wind's take on the deal will be available beyond the simple price quoted per kilowatt of energy purchased. They will simply pay, and pay and pay and pay...
So many questions - so few answers. It all seems so unfair.
Copyright 2010 by Peter A. Kenney
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