NStar and National Grid Ditch Cape Wind Agreement
- Business & Finance
Cape wind was dealt a significant setback by both NStar and National Grid yesterday.
Namely, the two Massachusetts’ utilities decided to terminate the power purchase agreement as the wind farm developer failed to meet the deadline to obtain financing and begin construction by the end of 2014.
Northeast Utilities spokeswoman Caroline Pretyman said: “Unfortunately, Cape Wind has missed these critical milestones.”
“Additionally, Cape Wind has chosen not to exercise their right to post financial security in order to extend the contract deadlines. Therefore, the contract is now terminated.”
Under the original agreement, National Grid agreed to buy half of the electricity produced by the 468MW wind farm while Northeast Utilities’ subsidiary NStar signed to acquire 25%.
However, Cape Wind does not believe these terminations are valid. On 31. December, Cape Wind president James Gordon wrote to two utilities asking them to restrain themselves from voiding the contracts “due to the Force Majeure provision of the contracts that extends the milestone dates.”
He cited “extended, unprecedented, and relentless litigation by the Alliance to Protect Nantucket Sound,” project’s leading foe.
Cape Wind project has secured all required permits and was expected to begin construction in 2015 after it completes its financing.