Library filed under Taxes & Subsidies from Massachusetts
With last week's announcement of a proposed pact to sell half the power from the 130 turbines Cape Wind plans to build in Nantucket Sound, the developer is poised to pursue loans and investors to pay for the wind farm's estimated multibillion dollar price tag. Under the agreement filed May 10 with the state Department of Public Utilities, Cape Wind will sell 760 million kilowatt-hours a year to National Grid for $157 million in 2013.
After more than five months of negotiations, the state's largest electric utility has agreed to buy half the power generated by what could be the country's first offshore wind farm. Under the deal, National Grid will pay 20.7 cents per kilowatt hour for the power from the 130 turbines that Cape Wind Associates LLC wants to build in Nantucket Sound and for renewable energy credits associated with the project.
This letter was submitted to the Cape Cod Times newspaper in response to the report claiming the Cape Wind project will save $4.6 billion in costs to New England over 25 years of operation.
We applied a couple of years ago, using a consultant, for a grant to help with the installation of solar panels on one of our buildings. ...After all of this preparation we were notified that the grant would not be given due to lack of funds. However, it was suggested that since there were few requests for wind turbines, we likely would get a grant.
Green energy has been on the subsidy take for years, including in 2005 when Mr. Delahunt was calling for "an Apollo project for alternative energy sources, for hybrid engines, for biodiesel, for wind and solar and everything else." The reality is that all such projects are only commercially viable because of political patronage. Tufts economist Gilbert Metcalf ran the numbers and found that the effective tax rate for wind is minus-163.8%. In other words, every dollar a wind firm spends is subsidized to the tune of 64 cents from the government.
A local company has lost out on part of a $45 million project in the Midwest because federal tax incentives for renewable energy sources - an integral part of the economics of all renewable energy projects - are set to expire on Dec. 31. Roughly $200 million invested in two Pittsfield projects that would produce up to 50 megawatts of energy and 50 million gallons of biodiesel is also likely to be affected. Two wind turbine projects in North County that would collectively produce nearly 38 megawatts of energy could also face significant funding obstacles. ...If the extension fails, Fairbank, of EOS, said, on Jan. 1, "the industry just takes a massive blow because you just can't make the economics of these projects work without incentives."
The town's chances for a rebate from the Massachusetts Technology Collaborative for its proposed wind turbine may not be as good as they were last fall. An MTC program director said Tuesday the agency has had "active discussions" regarding its review process of small wind turbines after a consultant found estimates of their energy potential to be too optimistic. ...To be eligible for the rebate, a 10-kilowatt turbine like the one proposed in Westport must be projected to produce 8,760 kilowatt-hours per year of electricity, Christo said. ...A report of 19 MTC-funded small wind turbines by environmental consultant The Cadmus Group said "installers almost universally overestimate annual energy production. Often this overestimation is quite significant." Even a small error in calculating wind speed "can result in a very significant impact on energy production," the report said.
These letters, and a host of others addressing the Cape Wind facility proposed for Nantucket Sound, were published in the Mar 6, 2008 edition of the Cape Cod Times. The Minerals Management Service, a division of the Department of Interior, has released the draft environmental impact statement of the proposed project. Other letters can be accessed by clicking on the link at the bottom of this page.
Offshore wind projects such as Cape Wind would certainly feel the effects of a delay in the renewal of PTCs, said Glenn Wattley, chief executive officer for the Alliance to Protect Nantucket Sound, an anti-Cape Wind group. Without support from the federal government, such as is found in European countries, the project could fail after it is constructed and the public might be left holding the bag, Wattley said. ...The credits — which provide a 2 cents per kilowatt-hour incentive for the first 10 years of wind energy projects — expire at the end of 2008, she said. The missing PTCs were not the only blow to renewable energy in the bill. To get it past the president's pen, Democrats agreed to remove a federal version of renewable energy certificates for utilities.
Regulators recently dealt a serious blow to a proposed offshore wind farm in Delaware, criticizing the plan as too financially risky to consumers. ...what's significant about the news from Delaware is that the Public Service Commission used a team of independent consultants to determine the project's costs and their effect on consumers. That's not the case with the Cape Wind project. So far, the developer has refused to provide financial data that would help the public consider the definition of economic viability. As a result, how can the public fully consider the project if it does not have the appropriate economic information on which to judge it? The point at which the project becomes economically viable is critical to the public's consideration of the project as this private venture seeks to use public lands. ..."After six years of 'exhaustive' review of Cape Wind, we are still getting stonewalled," said Mark Forest, Delahunt's chief of staff.
For the past four years, the town was the vanguard project in the Massachusetts Technology Collaborative's campaign to bring wind power to the commonwealth's municipalities. The collaborative paid $5.3 million to buy two turbines for the town and reserved $3.72 million this year to stabilize the project's finances. But after four years of work, and more than $800,000 invested by the collaborative in studies, technical work, legal fees and other development steps, the Orleans wind turbine project imploded last month. ..."I don't think MTC was steering us in the wrong direction, they were just unsure exactly how to do it," McKusick said. ...Brewster Assistant Town Administrator Jillian Douglass said MTC and its consultants have a bias toward building large turbines to maximize revenues. That has helped stoke public resistance to 400-foot-tall structures. "Folks in New England do not think of wind on that scale," she said. "We value town character, and most would prefer it not to be above the treeline. ... If you could go smaller, and be economically feasible, you'd see a lot more people doing it."
Plymouth has been awarded a grant from the Massachusetts Technology Collaborative for Wind Turbine Project Feasibility Studies at a number of sites in town. The feasibility study will provide crucial information that will help Plymouth determine the most appropriate ways to pursue potential wind projects at up to three sites, including the wastewater treatment plant, Plymouth South High School and the Indian Brook Elementary School.
Boston utility NStar's plan to let customers buy wind-generated electricity is running into a gale of opposition from a rival "green power" provider, who said yesterday NStar's program would violate state law. Although Attorney General Martha Coakley and the Conservation Law Foundation, a Boston legal-environmental group, are backing the NStar plan, Larry Chretien, executive director of the Massachusetts Energy Consumers Alliance, said it violates the 1997 state utility restructuring law. That law, Chretien said, limits utilities to being "distribution companies" that deliver power that customers buy through the utility from independent third-party energy producers and means NStar can't legally become the supplier of power through contracts with wind farms in upstate New York and Maine. NStar plans to begin offering wind power by Jan. 1, pending state approval.
SCITUATE - The town has received a $65,000 grant to study whether wind energy can power its wastewater treatment plant. The Massachusetts Technology Collaborative grant comes after more good news for wind-power advocates: 12 months worth of anemometer readings at the plant show that there is enough wind to make it a suitable site for a turbine. Selectman Paul Reidy estimated that the town could save thousands of dollars by using wind power. The treatment plant used $146,000 worth of electricity last year. A draft of the feasibility study is expected to be ready by September. Officials are considering a public meeting at that point to discuss the town's options.
The Boston utility NStar plans to allow its residential and small business customers to buy their electricity from environmentally friendly wind farms - for a price. In a first of its kind for Massachusetts utilities, NStar is proposing to let its 1.1 million electric customers in Boston and 80 eastern Massachusetts cities and towns buy their power directly from a wind farm in upstate New York and a second under development in Maine. Because the wind farms are more expensive than conventional sources like coal and nuclear power, a typical homeowner would pay a premium of about $7.50 to $15 monthly. The program, being announced today, will need approval from state utility regulators before it is launched, which could be as soon as Jan. 1.
Salem wants to help lead the way when it comes to tapping the power of the wind. The city is working with the Massachusetts Technology Collaborative, a quasi-public agency that invests in renewable energy projects and companies across the state, to pursue the goal of locating one or more electricity-generating wind turbines on municipal sites in Salem. As a first step, the collaborative recently agreed to provide Salem with a preliminary analysis of eight potential sites for wind turbines identified by the city's Renewable Energy Task Force.
FAIRHAVEN - The town might not get the two wind turbines available through a state agency, and developer CCI Energy might be forced to pay an additional premium for two other units. The Massachusetts Technology Collaborative is giving preference to the town of Orleans for the turbines it holds in storage. That town is pursuing its own wind project through a private developer.
Consumers are paying some of the highest electricity rates in the nation, which severely limits the ability to attract and retain good jobs. Yet we add further costs to every electric consumer's bill to fund programs that, though intended to promote energy efficiency and the use of renewables, lack proportion, rationality, accountability, and oversight. It's time to stop piling on these added charges to our electric bills and start examining and coordinating the myriad programs we have.........Consumers also pay about $25 million annually into a fund disbursed by the Massachusetts Technology Collaborative to site and encourage projects using renewable power. Renewable power is a good thing, when it is economically viable, but for now electricity from sources such as wind and solar power is much more expensive than existing sources. We should not levy new taxes to fund more expensive power.
FAIRHAVEN - While an agreement for the construction of two wind turbines in town is yet to be finalized, the state is paying for one more study required by the project. The Massachusetts Technology Collaborative is providing $114,000 for an electrical interconnection study of the Fairhaven project, said Sen. Mark C.W. Montigny, D-New Bedford, on Tuesday. The study will determine how to connect the two 1.65-megawatt turbines to the waste-water treatment plant off Arsene Street, Town Secretary Jeffrey W. Osuch said. The MTC will hire a consultant to conduct the study, provide technical support contracting and construction oversight.
BOSTON - Massachusetts will be one of two states building a state-of-the-art facility to test turbines used in wind power. The facility will place the state at the forefront of wind power and alternative energy, said U.S. Department of Energy Secretary Samuel Bodman, who outlined the facility with Gov. Deval L. Patrick at a press conference yesterday. "This will make Massachusetts a global center for clean energy technology," Patrick said. "This is a big step for us."