A Huge Year End Victory for Cape Wind!

Anyone following Cape Wind recently knows that the Alliance to Protect Nantucket Sound has been crowing over its successful 2011. To be honest, this crowing has not been without some justification: The FAA was ordered to reconsider Cape Wind and the Alliance did finally reverse an alarming downward trend in fundraising. How sad then for the Alliance that all of that was overshadowed in a stroke today when the Massachusetts Supreme Judicial Court (SJC) unanimously upheld the Cape Wind/National Grid Purchase Price Agreement (PPA). This was a critical court challenge for the Alliance and it got squashed…. unanimously!
Did I mention that the decision was unanimous? OK enough gloating by me. At the risk of getting too down and dirty, let’s take a look at this SJC ruling. The following are the grounds upon which the Alliance and several other interveners challenged the DPU’s approval of the PPA:
1. The PPA violates the commerce clause of the United States Constitution
2. The DPU improperly found that the PPA was cost effective and in the public interest
3. The contract should have been solicited through competitive bidding
4. The contract should have been subject to a cap on its size
5. The DPU erroneously approved a method for recovering costs
6. The DPU erroneously required that the contract facilitate financing of a renewable energy generation source.
For each of these, I’ll summarize the position of the interveners and then summarize the response of the SJC relying upon quotes from the decision as much as possible.
1. The PPA violates the commerce clause of the United States Constitution
Interveners: The MA Green Communities Act (GCA) forced National Grid to purchase renewable energy from a Massachusetts supplier. This violates the commerce clause of the U.S. Constitution.
SJC: In acknowledgement of the correctness of this objection, the GCA was previously amended. That is, the GCA no longer requires that distribution companies like National Grid purchase only MA renewable energy.
Interveners: The PPA was negotiated before the GCA was amended and thus was influenced by its original geographic requirement.
SJC: Nowhere in the extensive documentation supplied by National Grid to explain its decision to sign the PPA does evidence exist that National Grid considered the geographical location of Cape Wind. There is no evidence that the geographical source of the PPA’s power factored into National Grid’s decision.
2. The DPU improperly found that the PPA was cost effective & in the public interest
Interveners: The fact that the PPA prices exceed market prices clearly shows that the PPA is not cost effective.
SJC: “The department’s analysis was thorough. It carefully considered, and in some cases adopted, counter arguments made by the interveners. It relied on a number of independent analyses and forecasts to reach its ultimate conclusion. The record contained sufficient evidence for a reasonable person to conclude that [its] benefits outweighed its costs”. Basically, the SJC said that one must consider the benefits along with the costs. Then it agreed with the DPU that the long term benefits outweigh the long term costs.
3. The contract should have been solicited through competitive bidding
Interveners: National Grid did not solicit competitive bids as required.
SJC: The GCA is clear on this point: “The electric distribution company shall select a reasonable method of soliciting proposals which may include public solicitations, individual negotiations or other methods.” National Grid acted properly when it conducted an individual negotiation with Cape Wind.
4. The contract should have been subject to a cap on its size
Interveners: The GCA caps long term renewable energy contracts at 3% of customer load.
SJC: “The short answer to [the interveners’] argument is that it is inconsistent with the language of the Act” which “prevents the department from forcing distribution companies to enter into LTCs for more than 3 percent of [customer load]”. Basically the GCA limits the amount of renewable energy that National Grid must purchase but it does not limit how much National Grid can purchase.
5. The DPU erroneously approved a method for recovering costs
Interveners: National Grid’s plan to spread the cost of the Cape Wind contract over all of its MA customers is improper.
SJC: “The department permissibly determined that the benefits of PPA-1… will accrue to all National Grid customers, and it is therefore appropriate to require all customers to share in the costs”.
6. The DPU erroneously required that the contract facilitate financing of a renewable energy generation source.
I’m afraid that this one is just to obscure for me. I’ll have to punt on it.
Did I say above that I was done gloating? Oh well, I’m weak.
This is a HUGE win for Cape Wind and a HUGE loss for the Alliance… regardless of how Audra Parker tries to spin it!
CAPE WIND CONVERSATION
BLOG
DECEMBER 28, 2011
Source URL: http://www.capecodtoday.com/blogs/wind/2011/12/28/5655-huge-year-end-victory-cape-wind