Wind Farm May Now Take Root
(Photo via ThinkStock.)
Yesterday, the state approved a $17.5 billion merger between Northeast Utility and NStar, making the new conglomerate the largest utility provider in the region and extending its reach to 3.5 million households. The green angle here is Deval Patrick’s demand that any merger include a component of renewable energy, which breathed new life into the up-to-this-point DOA Cape Wind project.
Briefly, in exchange for letting the NStar and NU become too big to fail, the state extracted a promise that the new company would purchase 27.5 percent of the anticipated capacity of the Cape Wind project, which if estimates hold, could produce 2 percent of the state’s overall electricity needs. Math it a little, and that means the merged entity could deliver just over .5 percent of the state’s power as renewable energy. Wowie zowie.
Critics of Cape Wind, a decade-in-the-making project, claim that off-shore wind costs four times more than comparably sourced energy on the mainland. Businessweek had a quote from one of the NIMBY groups this morning:
“Ratepayers are not going to stand still for the kind of bills that the governor, Nstar, National Grid and Cape Wind want to impose on them,” Audra Parker, president of Alliance to Protect Nantucket Sound, said in a statement. “Other green energy is available at a fraction of the price.”
This is mildly dishonest given the political costs of putting anything even resembling a wind turbine anywhere near the Cape or the islands — and FYI we’re now defining “near” as “anywhere within sight.” Moreover, the costs for wind projects are extremely front loaded. By some estimates, the cost amortizes over 5-15 years, at which point the electricity becomes nominally free. No doubt it’s spendy to build off-shore infrastructure and transmission lines, but off-shore winds blow faster and more consistently than on-shore sources — hence the push to do them in the first place.
Then again, this seems like drops in the ocean. The whole deal looks like NStar and NU conceding to own a dog in exchange for more power to set rates across the region — once the utility makes good on its promise not to raise rates through 2015 and to dole out a one-time savings of $12-15 to each ratepayer, according to the Globe.
And here’s the other problem, if Cape Wind happens — and it’s definitely an “if” issue, Connecticut still has to approve the merger and the Mass-mandated wind-power rider could be a deal-breaker for them — and the costs spread out as expected, the actual amount of electricity it generates is not going to do anything to offset the average ratepayers bill. In fact, I’d bet that once the construction costs are forwarded to ratepayers, the savings from renewable energy will invariably result in a net increase in the electricity rate.
I’m all for green projects, renewable energy, but for once, it’d be nice if there were other incentives do to them — reduced emissions are good, but I’m talking tangible stuff, like costs savings — rather than simply green for green’s sake.