NStar must rebid 3 wind farm contracts; Mass. requires it to include projects outside state 

The state Department of Public Utilities has ordered the utility NStar to rebid three renewable energy contracts awarded to wind farms in Western Massachusetts and include out-of-state projects that could yield cheaper prices for consumers.

But the state agency has not required National Grid to renegotiate a contract to buy half of the power from Cape Wind, the controversial 130-turbine wind farm proposed in Nantucket Sound.

The department said in its order late last week that NStar concluded its long-term renewable contracts under an old regulation that limited utilities to striking clean energy deals with projects in Massachusetts or adjacent state or federal waters, in an attempt to promote the state’s green energy industry and create jobs locally.

That requirement was abandoned in June after its legality was challenged by TransCanada, a company building a wind farm in Maine. Now utilities must also look at renewable energy projects outside the state.

Five days before the state issued its June order, NStar had signed three competitively bid contracts to buy power from wind farms in Douglas, in Monroe and Florida, Mass., and in Brimfield. It has not disclosed the price that consumers will ultimately pay.

Public utilities commissioners said they appreciated NStar’s efforts, but said it would still have to rebid the contracts.

“We are mindful of the efforts on the part of the company and its counterparties to comply with the spirit of the Green Communities Act and to provide customers with cost-effective renewable energy,’’ the seven-page decision said.

NStar issued a statement yesterday saying, “Given the events that have occurred over the past few months relating to the renewable contracting process, we understand the department’s ruling. We still believe these are good contracts that would help meet the goals of the Green Communities Act and keep prices down for our customers, and we hope to secure similar contracts during the next’’ bidding cycle.

National Grid was also prohibited from looking for a possibly better deal with out-of-state projects when it negotiated with Cape Wind. However, the state said the utility’s contract with Cape Wind was different because it was reached through one-on-one negotiations, not competitive bidding. Still, the Department of Public Utilities said it has ordered National Grid to show the department how it is complying with the new rules.

A National Grid official said yesterday that the company had asked the state to suspend the in-state rule before the TransCanada suit and that even if it didn’t exist, the utility would have gone with Cape Wind.

“We accepted the fact that Cape Wind might be compared against other resources, including both in- and out-of-state projects,’’ said National Grid lawyer Ronald Gerwatowski.“The so-called protectionism rule had no effect on our decision to sign up Cape Wind.’’

Cape Wind opponents said the state should order National Grid to rip up the contract with the offshore wind farm. The opponents, as well as business groups, say that the 18.7 cents per kilowatt hour National Grid and Cape Wind have agreed to is too expensive for consumers and that cheaper clean energy can be found elsewhere. The price was originally 2 cents per kilowatt higher, but the attorney general’s office negotiated it down by 10 percent.

Cape Wind and National Grid need to “abide by the same rules and be competitively bid to give the best price to consumers,’’ said Audra Parker, president of The Alliance to Protect Nantucket Sound.

The Department of Public Utilities is reviewing the National Grid-Cape Wind contract to see if it makes sense for rate payers.