National Grid Agrees to $442 Million Rate Hike to Purchase Cape Wind Power

HYANNIS, Mass., May 7 /PRNewswire/ -- National Grid today announced that its ratepayers would purchase half of the power from the embattled Cape Wind project at a premium for ratepayers of $442 million over the course of the 15 year agreement. The total cost of the project's power would cost Massachusetts residential and commercial ratepayers an additional $884 million in energy costs over the next 15 years. National Grid and Cape Wind refused to release the full details of the rate hike – which may be substantially higher based on the premiums businesses will pay – until Monday.

"This confirms the worst fears of many Massachusetts ratepayers and businesses," said Audra Parker, president and CEO of the Alliance to Protect Nantucket Sound. "Massachusetts is already paying some of the highest electric rates in the country – a burden that has forced businesses to leave and families wondering how they will make ends meet."

If approved, National Grid ratepayers would pay an additional $23 million in the first year of the power purchase agreement, and built-in annual rate increases would eventually balloon the annual ratepayer premium to an additional $37 million in the final year of the contract. National Grid agreed to purchase the power at a rate of 20.7 cents per kilowatt hour. This represents a 256 percent increase compared to the current rate of electricity. Over the course of the contract, the increases would balloon to 420 percent of the current cost of electricity.

In a recent survey conducted by the University of Massachusetts Center for Policy Analysis, a majority of consumers said they would not be willing to pay more for electricity produced by wind turbines. Much of the support for wind energy was based on the false assumption that offshore wind will lower electric bills.

In a morning press conference both National Grid and Cape Wind refused to answer repeated questions about the total cost of the project to ratepayers and taxpayers as a result of massive public taxpayer subsidies – estimated in the billions of dollars – and necessary electrical grid improvements that ISO New England has estimated at $10 billion.

Similar cost concerns in Rhode Island led that state to reject a proposed 20-year power-purchase agreement between an offshore wind project and National Grid that nearly tripled rates for wind power from the offshore project compared to current rates.

Political leaders, business groups and consumer advocates have all expressed concern about the impact of high rates on consumers and businesses across the Commonwealth due to Cape Wind.

"Cape Wind represents the most expensive renewable power imaginable and will burden ratepayers for years to come. The Governor should condemn this contract as unaffordable," said Robert Rio, senior vice president at the Associated Industries of Massachusetts. "At a time when we are being promised that renewable prices are coming down this contract has a guaranteed increase. It does not make any sense."

The $442 million rate hike comes five months after National Grid initially agreed to have its ratepayers purchase half of Cape Wind's power. That agreement was announced just days after Governor Patrick approved a $44 million rate hike for National Grid. At the same time the Governor was criticized for collecting thousands of dollars at a fundraiser thrown by National Grid executives in the days following the rate hike and Cape Wind power purchase agreement.

"This deal represents the worst kind of corporate welfare," said Parker. "National Grid and Cape Wind stand to make millions on the backs of Massachusetts ratepayers and businesses while the Patrick administration looks the other way."  

SOURCE Alliance to Protect Nantucket Sound

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED