Cape Wind PPA deal upheld

A US federal judge has dismissed the latest lawsuit by opponents of Cape Wind which had challenged its power purchase agreement with electric utility NSTAR.

It was the 26th legal ruling since August 2003 in favor of what is expected to become America’s first offshore wind project.

Judge Richard Stearns of the US District Court, District of Massachusetts, rejected all claims against Cape Wind, NSTAR and the state.

NSTAR signed a 15-year PPA with Cape Wind in 2010 to purchase 27% of the project’s 468MW nameplate capacity for 18.7 cents per kWh, rising 3.5% annually. The state Department of Public Utilities (DPU) approved the deal in November 2012.

Project opponents including the Alliance to Protect Nantucket Sound, town of Barnstable and businesses claimed that the PPA’s above-market prices violated several clauses in the US Constitution.

They also argued that the state encroached on Federal Energy Regulatory Commission’s lawful authority to establish wholesale electricity prices, and that the utility felt pressured to buy Cape Wind’s power to obtain state approval for its 2012 merger with Northeast Utilities.

Stearns noted in his decision that the lawsuit would itself violate the 11th Amendment to the US Constitution that gives states immunity from being sued for past actions in Federal Court.

In addition, he wrote, “The allegation that DPU dictated that NSTAR procure power from Cape Wind at a specified price is misleading and ultimately untrue."

Stearns added: "But in this case, the Governor, the Legislature, the relevant public agencies, and numerous courts have reviewed and approved the project and the PPA with NSTAR and have done so according to and within the confines of the law. There comes a point at which the right to litigate can become a vexatious abuse of the democratic process. For that reason, I have dealt with this matter as expeditiously as possible."

Cape Wind developer and owner Energy Management Inc. began seeking to permit the project in 2001.

"This important legal victory provides 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," says Cape Wind President Jim Gordon.