Hidden costs of Cape wind after new study (USA)
A new report on the financial threat posed by Cape Wind to consumers makes it even more clear that Attorney General Martha Coakley is taking the right steps by demanding more answers about the true cost — and true profits — of this beleaguered project.
The Attorney General is demanding that Cape Wind and National Grid spell out how much the wind project will actually cost — something the company will not reveal — and how much the builder and utility intend to profit.
“Finally, someone on Beacon Hill is standing up for consumers, ratepayer and businesses that will take a massive hit in the pocketbook if this project is allowed to go forward,” said Audra Parker, President and CEO of The Alliance to Protect Nantucket Sound.
According to a new report on the project, cash-strapped cities and towns across Massachusetts should brace for a new fiscal setback — bills to pay for Cape Wind that could add more than $1.5 million per year to the average community.
“There are 168 cities and towns that get their power from National Grid, and those communities are going to be hit hard when they have to start paying for this project,” said Parker. “On average, the premium equates to 25 jobs — teachers, firefighters, police — that will have to be needlessly sacrificed to pay for this project when other green energy is available at less than half Cape Wind’s steep price.”
The estimates are available in a new report by W. Robert Patterson & Associates that reveals even greater hidden costs that will burden residential and commercial property owners if the power purchase agreement between National Grid and Cape Wind is approved.
The report, “The True Cost of Cape Wind,” outlines the potential costs of the proposed power purchase agreement between National Grid and Cape Wind, the estimated construction cost of Cape Wind — which has been hidden by the developer — and the potential community impacts of the project.
“This study provides a thorough overview of the real costs that ratepayers can expect with Cape Wind,” said Audra Parker, CEO and president of The Alliance to Protect Nantucket Sound. “Neither Cape Wind nor National Grid have been accurate or transparent with their cost estimates. It’s important that customers are aware of the numbers that they would really see on their electric bills come 2013.”
According to the report, National Grid delivers electricity in 168 communities in the Commonwealth. Each community — its residents, commercial and municipal customers — on average would bear an additional $1,479,000 in energy costs in the first year (2013) alone. The first year estimate of roughly $1.5 million is equal to 25 jobs, or a total of 3400 jobs over all 168 communities.
According to the Patterson report:
“National Grid’s customer base includes residences, businesses, municipalities and school systems. A small commercial customer such as small storefront would pay an additional $240 in annual electricity costs starting in 2013 or $5,168 over the 15 year life of the contract. A medium commercial customer such as an average restaurant would pay annually an additional $2,600 or $56,000 over 15 years. A large commercial customer such as a school system or water treatment plant would pay an additional $53,000 more in electricity costs in 2013 or $1.14 million over the life of the contract.”
The report points out that the numbers reported by National Grid and Cape Wind are inaccurate since they reflect the cost of only half the power that Cape Wind is slated to provide, understate the average residential use and use inflated numbers for market prices in 2013. The report provides a more realistic estimated impact of $4.90 per month for each residence. This premium would jump to $6.76 per month at the end of the contract in 2028. Households would be forced to pay $1050 more over the life of the Cape Wind contract when other renewable energy is readily available at a fraction of the cost.
“The NGrid contract price to purchase power from Cape Wind is too expensive and represents an unnecessary burden for NGrid customers particularly when other green alternatives are available,” the Patterson report concludes. “At 300% of market and double land based wind energy, NGrid customers cannot afford this contract.”
Additionally, all of these estimates are dependent on a $600 million federal credit that the Cape Wind project has applied for. If the developer does not receive the federal credit, the impacts on National Grid customers rise even further.
Source: prnewswire, July 11, 2010;