Tax payer to fund windfall

A windmill in Hull

The controversial Cape Wind project on Nantucket Shoals would net developers nearly $139 million in profits due largely to huge taxpayer-supported subsidies, according to a new study that came under immediate criticism for apparent contradictions and the authors’ past financial support from anti-wind-farm forces.
 
Suffolk University’s Beacon Hill Institute, which released a study two years ago that was also critical of the Cape Wind project, said the proposed 130 giant wind turbines wouldn’t be built by private developers if it weren’t for hundreds of millions of dollars in state and federal tax credits that make it financially feasible.
 
As a result of the tax subsidies and high energy costs, the study said, Cape Wind Associates could expect to receive a 25 percent return on equity, or $139 million, over the decades-long life of the project.
 
David C. Tuerck, executive director of the institute, said the latest study was not paid for by the Egan Foundation - whose family members are prominent opponents of the Cape Wind project and contributed about $125,000 for a 2004 study that found the Cape Wind project not to be economically feasible.
 
The first study’s conclusions seem to contradict the latest study’s findings that the proposed project would be a lucrative windfall for developers.
 
But Tuerck, who said members of the Egan family never interfered with its research and findings, noted much has changed since the 2004 study, including higher energy prices that could change calculations.
 
The second study was conducted without financial support from the Egan Foundation and is meant to explore a legitimate public issue about tax credits that are needed to make Cape Wind financially viable, he said.
 
Jim Gordon, president of Cape Wind, countered that the institute’s findings are“fraught with errors” and“tainted” by the institute’s past funding by wind-farm opponents.
 
“This seems more like a propaganda report than a serious economic analysis,” said Gordon.“It’s filled with outlandish assumptions.”
 
Gordon said one federal tax credit, worth a potential $180 million to the project, is set to expire at the end of 2007 and there are no guarantees it will be renewed. Meanwhile, the institute bases its calculations on long-term electric rates that“no one can really know,” he said.
 
The proposed project, which could cost close to $900 million if it’s ever built off the coast of Cape Cod, is now the center of intense debate locally and nationally.