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Billions for big wind

The highly touted Cape Wind project is already stoking fears of an open-ended ratepayer burden and lack of accountability reminiscent of the state's Big Dig nightmare. As the Herald reported yesterday, the Cape Wind project, which started out as a $650 million offshore wind farm, has ballooned to more than $2 billion in construction costs and a potential $6 billion hit to ratepayers when debt service, profits, maintenance and other costs are included.

Cape plan feeds fear of costly boondoggle

The highly touted Cape Wind project is already stoking fears of an open-ended ratepayer burden and lack of accountability reminiscent of the state's Big Dig nightmare.

As the Herald reported yesterday, the Cape Wind project, which started out as a $650 million offshore wind farm, has ballooned to more than $2 billion in construction costs and a potential $6 billion hit to ratepayers when debt service, profits, maintenance and other costs are included.

"This is reminiscent of how the cost of the Big Dig escalated far beyond what the people of Massachusetts were led to believe," said U.S. Rep. William Delahunt (D-Quincy), a longtime Cape Wind critic who has estimated the project's construction price tag at more than $2.5 billion. "As the pieces of information on Cape Wind come out, the costs keep getting more exorbitant."

The $6 billion cost to electricity customers doesn't include an estimated $600 million in taxpayer subsidies that Cape Wind developers could reap from federal tax credits to cover a portion of the final construction price.

The staggering... more [truncated due to possible copyright]  

Cape plan feeds fear of costly boondoggle

The highly touted Cape Wind project is already stoking fears of an open-ended ratepayer burden and lack of accountability reminiscent of the state's Big Dig nightmare.

As the Herald reported yesterday, the Cape Wind project, which started out as a $650 million offshore wind farm, has ballooned to more than $2 billion in construction costs and a potential $6 billion hit to ratepayers when debt service, profits, maintenance and other costs are included.

"This is reminiscent of how the cost of the Big Dig escalated far beyond what the people of Massachusetts were led to believe," said U.S. Rep. William Delahunt (D-Quincy), a longtime Cape Wind critic who has estimated the project's construction price tag at more than $2.5 billion. "As the pieces of information on Cape Wind come out, the costs keep getting more exorbitant."

The $6 billion cost to electricity customers doesn't include an estimated $600 million in taxpayer subsidies that Cape Wind developers could reap from federal tax credits to cover a portion of the final construction price.

The staggering figures, calculated by the Herald and confirmed by numerous industry sources, are sparking concerns that Cape Wind is already mirroring the Big Dig tunnel project that started out costing $2.8 billion and ended up decades later at more than $20 billion.

And like the Big Dig, there appears to be no direct line of accountability for the project's expenses. It remains unclear which government agency will specifically monitor the wind farm project's construction for cost controls and contractor performance in view of the public subsidies it will receive.

"It looks like Deval Patrick and Ian Bowles are going to have their very own Big Dig," said Treasurer Tim Cahill, an independent candidate for governor, referring to the governor and his energy and environmental secretary. "The governor's office has embraced this project and now they own it."

Patrick and Bowles have aggressively pushed Cape Wind publicly and privately over the past four years.

Bowles, who has lobbied hard for new state laws that helped clear the way for Cape Wind and other renewable-energy projects, countered that constant delays caused by critics have prevented Cape Wind from getting started.

"If Cape Wind had been operating in 2008 and 2009, it would have saved money for Massachusetts consumers," said Bowles in a statement. "Going forward, it will provide long-term protection against high, rising and volatile fossil fuel prices. . . . Criticisms like these are without substantive merit and must be based on ignorance, posturing or a general NIMBY reflex toward wind power."

He said the average homeowner will pay only $1.59 per month extra in the first year to pay for Cape Wind, though some experts dispute that figure and say it will be much higher. Business groups say the cost of Cape Wind to companies could run into thousands of dollars per month.

Part of the problem is that Cape Wind Associates, the private developer of the 130-turbine wind farm off the coast of Cape Cod, has flatly refused to provide the final construction cost for the project, citing competitive talks now under way with contractors.

Not even Patrick and U.S. Interior Secretary Ken Salazar, who recently OK'd the project, know the true cost of Cape Wind, referring questions to the developer.

But last week the veil over the project's finances began to fall off when Cape Wind and National Grid said they had reached a long-term renewable power contract, as required by state mandates.

The pact, which must be reviewed by the Department of Public Utilities, calls for the giant utility to pay 20.7 cents per kilowatt hour for Cape Wind's power, starting in 2013, with 3.5 percent annual cost adjustments over the next 14 years. The kilowatt rate is about double the current cost of fossil-fuel generated electricity and land-based wind farms.

On Monday, National Grid said in a DPU filing that the first year's payment to Cape Wind would be about $157.4 million, or $66.6 million above the current market value of electricity.

Cape Wind spokesman Mark Rodgers conceded construction prices have risen since the project was first proposed early last decade, thanks to inflation and a rise in commodity prices.

"We believe Cape Wind will be competitive over the long haul," said Rodgers, estimating that the prices of fossil fuels will rise in coming years, making Cape Wind a bargain.

But Mary Connaughton, a former Massachusetts Turnpike Authority board member who often criticized the Big Dig project, said she's not buying the excuses.

"It sounds remarkably similar to the explanations given for the Big Dig overruns," said Connaughton, a Republican candidate for state auditor.


Source: http://www.bostonherald.com...

MAY 12 2010
https://www.windaction.org/posts/26177-billions-for-big-wind
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