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OFFSHORE WIND'S LOOMING NIGHTMARE

Updated on August 30, 2010

THIEVES IN THE NIGHT

There is a lot of black ink in the draft power purchase agreement (PPA) between Cape Wind Associates LLC and National Grid...large swaths of black ink that make it impossible to know what is written in the agreement at critical points. Of course, things such as total costs and true profits are blacked out, even though electric customers subject to the agreement will have no choice but to pay the rate set by the PPA. But, there could be even more important things blacked out.

For example, because we know that wind power is unreliable, intermittent, does the PPA contain a must buy clause? In other words will rate payers pay for power the do not and cannot use? And, how could this happen?

Since Cape Wind fans are so enamored of Denmark and the widespread wind generation seen there, we should look at Denmark's actual operating experience. It is not uncommon for the wind farms in Denmark to be operating beautifully, at or near full capacity, because of favorable winds but at times when demand for electricity is less than supply. Reportedly this is seen most often at night when, well after dark, winds pick up and blow at sustained speeds for much of the night. Of course, the nation of Denmark, with a population less than Massachusetts, is asleep...with their lights out and their demand for elctricity at its low point.

However, this situation does not change the capital costs for Denmark's hugely expensive wind farms, particularly those operating offshore where the cost of building each facility is typically double what it costs to build a wind farm on land. Someone has to pay those costs. Denmark simply dumps its excess wind power to neighboring countries at a discounted rate while Danish citizens continue to pay a steady total cost for their energy; 39 cents per kilowatt, the highest rate in the industrialized world, more than four times what electricty costs in the United States. Danish rate payers subisdize cheap power for other countries. At least something in Denmark is stable, if not the wind certainly the cost of electricity.

Here in eastern Massachusetts we do not know how National Grid and Cape Wind propose to handle this simple but undeniable fact: wind is intermittent and often provides energy at times of low demand. Normally oner would expect to be able to read a draft of the proposed PPA to learn how the two parties to that agreement intend to handle this situation. But, the public who will have no choice but to pay the price of the PPA, have no recognized right to such knowledge. The DPU allows the black ink and the Attorney General will not argue the point. Will National Grid rate payers be forced to pay for electricity they cannot use?

What else lies beneath the black ink that Cape Wind does not us to know? What ever happened to transparency in government?

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