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Massachusetts OK power deal in another win for offshore wind project

By Ashley Vaughan, CNN
  • Massachusetts' utility regulator OKs a 15-year deal between National Grid and Cape Wind
  • The pact is another key step forward for the controversial offshore wind project
  • The decade-long debate over the plan pitted Sen. Kennedy against environmental groups
  • Some 130 wind turbines are set to be built in Nantucket Sound off Massachusetts' coast

(CNN) -- The nation's first proposed offshore wind farm got another big boost Monday, when Massachusetts' utility regulator approved a 15-year power purchase between the project's developer and its first client, National Grid.

Developers still need to secure permits from the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency. Still, Monday's announcement marks a major milestone for the effort, giving the project a much-needed revenue stream ahead of planned construction.

"It is abundantly clear that the Cape Wind facility offers significant benefits that are not currently available from any other renewable resource," Ann Berwick, chair of the state utilities department, wrote in a press release. "These benefits outweigh the costs of the project."

The Cape Wind project, which has bitterly divided residents and power brokers in Massachusetts for the past decade, consists of 130 wind turbines to be located off the coast in the iconic Nantucket Sound.

The late Sen. Edward Kennedy, a champion of green energy and recreational sailor whose family compound in Hyannis would overlook the turbines, was among those who opposed the effort. But it had the support of Massachusetts Gov. Deval Patrick, a fellow Democrat, and, ultimately, President Barack Obama's administration.

Last April, Interior Secretary Ken Salazar signed off on the project, predicting it would be "the first of many ... up and down the Atlantic coast." He said that the ordeal had gone on far too long and promised a "more rational and orderly" process for future initiatives.

Under the deal announced Monday, 50 percent of the power generated by Cape Wind Associates' project will be bought by National Grid, one of the main electricity providers in Massachusetts.

The rates would start, in 2013, at 18.7 cents per kilowatt hour. That will increase most consumers' electric bills by one or two percent, according to the press release.

The 300-plus page contract stipulates that the price will then go up, annually, 3.5 percent over 15 years.

After that, National Grid would have a one-time right to extend the contract for another 10 years on terms that could be below market rates.

Despite the increases, the state utility department said the new deal will be cost effective, thanks to built-in protections and benefits that it claims will well exceed costs.

"Not only does the contract support the largest renewable energy project proposed in New England," Berwick said, "it provides protection for consumers against the volatility of fossil fuel prices for a portion of electricity purchases."

Even before this week's announcement, 17 state and federal agencies had weighed in on the project, reviewing everything from its impact on shipping and aviation to how it might affect migrating birds and fish populations.

Greenpeace, the Sierra Club and nearly every major environmental group in the nation supported the project, calling it key to promoting and producing green energy.

Opponents included billionaire energy giant William Koch, former Massachusetts Gov. Mitt Romney and Sen. Scott Brown, a Massachusetts Republican, with many of them saying Nantucket Sound was the wrong place for the turbines.

On Monday, Audra Parker, president of the Alliance to Protect Nantucket Sound, continued to call the plan as "politically motivated" and too pricey to be in Massachusetts residents' interest.

In the near future, Parker said her group plans to appeal the utility department's decision to Massachusetts supreme court.

"It is a transfer of wealth from ... rate payers to a private developer," Parker told CNN. "A decision made on the facts will recognize that Cape Wind is not cost-effective and is a bad deal for Massachusetts."