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Cape Wind close on financing delayed; Opponents say timeline unfavorable for project’s construction
Credit: By Patrick Cassidy | Cape Cod Times | Dec. 18, 2014 | www.capecodtimes.com ~~
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Cape Wind won’t close on financing for the proposed Nantucket Sound wind farm by the end of the year as company officials had hoped, a prospect that has opponents of the project feeling more positive about their prospects for stopping it altogether.
Cape Wind won’t close on financing for the proposed Nantucket Sound wind farm by the end of the year as company officials had hoped, a prospect that has opponents of the project feeling more positive about their prospects for stopping it altogether.
“Sounds like Cape Wind is clearly in trouble,” said Audra Parker, president of the project’s primary opposition group, the Alliance to Protect Nantucket Sound. “This is a developer, a private developer, that’s struggled for almost five years now to put full financing together, even with high-priced contracts and guaranteed revenue in hand.”
Cape Wind spokesman Mark Rodgers confirmed by email Wednesday that the company does not expect to complete financing by the end of the year, but wrote that it expects to do so within the first quarter of 2015. The project was first proposed in 2001. Although it has survived repeated challenges, financing has long been considered the most significant hurdle left before construction can begin.
The latest cost estimate for the project was $2.6 billion, which was part of filings by the Massachusetts Attorney General’s office in 2010. Cape Wind has since lined up several pieces of the overall financing for the project, totaling about $1.45 billion, including a $150 million Department of Energy loan guarantee.
In July, the GOP-controlled House approved an energy and water appropriations bill that included a measure to bar the Energy Department loan, but this week the President signed a $1 trillion spending bill Congress passed on Saturday, which eliminated the provision. The bill, however, requires the department to provide a report within 30 days as well as quarterly updates on the status of litigation and the risks of litigation to the project.
Opponents last week filed an appeal of the dismissal of a federal lawsuit against the Department of Interior for approving the project. The town of Barnstable also appealed the approval by the state Energy Facilities Siting Board of a plan to connect the wind farm to the electric grid.
The alliance, the town of Barnstable and several businesses are also awaiting a decision from a three-judge U.S. Court of Appeals panel on whether a power purchase agreement between the offshore wind energy developer and NStar is constitutional.
In May, U.S. District Judge Richard Stearns ruled in favor of Cape Wind, NStar and state energy regulators, who argued the suit was barred by the 11th Amendment of the Constitution, which restricts lawsuits in federal court against a sovereign state for past actions.
The alliance, Barnstable and the businesses appealed that decision, hiring well-known constitutional law attorney Laurence Tribe to take their case.
“Project opponents have lost 26 legal decisions to date and are apparently filing more frivolous appeals – we agree with federal Judge Richard Stearns that their litigation strategy amounts to a ‘vexatious abuse of the democratic process,’” Rodgers wrote.
But Parker has argued that opponents only need to win one lawsuit and have clearly bet on delaying the project until it falls under its own weight.
In court filings earlier this year, Cape Wind President Jim Gordon stated that the project needed to close on financing by September in order to meet lead times for components of the wind farm so construction could begin before the end of 2015. If that doesn’t happen, agreements between Cape Wind and utilities for three-quarters of the project’s power will expire.
“For me the key thing is … they’re well past their own deadlines,” Parker said. “Losing those contracts is a fatal blow to the project.”
Cape Wind won’t be able to replace the contracts with National Grid and NStar now that state law requires competitive bidding for the long-term agreements, Parker said.
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