Cape Wind deal means dollars for tribes, higher costs for consumers

Three weeks ago, Interior Secretary Ken Salazar approved Cape Wind’s plan to place 130 wind turbines on Horseshoe Shoal in Nantucket Sound. The Wampanoag Tribe of Gay Head (Aquinnah) and the Mashpee Wampanoag Tribe opposed the Cape Wind project on cultural grounds.

Opponents of the wind farm, including both tribes, have said they will pursue legal action to block construction. But the Wampanoags also stand to reap millions if the wind farm is built.

The official, 75-page Department of the Interior record of decision approving the project provides an outline of how much money the tribes could expect to receive to mitigate their cultural concerns.

Interior said that if the tribes were amenable to pursuing project mitigation, the department would work with the tribes and state of Massachusetts “in furtherance of the preservation of the cultural and historic interests of the tribes.”

Potential mitigation measures include up to $200,000 per year for the 21-year life of the project, split equally between both tribes for “to be identified” cultural and/or historical interests, the decision said.

The state’s Coastal Zone Management office will also administer a $3.5 million pool to address the cultural and historic impacts to Nantucket Sound. The tribes could also tap that.

Cape Wind will also be responsible for analyzing turbine sites for the presence of archaeological resources. The company must pay a professional archaeologist and tribe representative to monitor work that disturbs the surface of the sea bed.

Tribe is disappointed

Federal law required consultation with Native American tribes as part of the permitting process. Members of the Mashpee and Aquinnah Wampanoag tribes opposed the project, claiming that the wind farm would interfere with their view of the rising sun, an important element in tribal ceremonies. And, they said, the wind farm would be built on a shoal that was dry land thousands of years ago and remains a sacred burial and cultural site.

The National Park Service added weight to the tribes’ objections when it announced that Nantucket Sound was eligible to be listed in the National Register of Historic Places, due to its significance as a “traditional cultural property and as an historic and archeological property.” It was the first time such a designation had been applied to a body of water.

In February, the Aquinnah and Mashpee Wampanoag tribes rejected a Cape Wind offer of $1 million each, paid over 20 years, as part of a mitigation offer, according to published reports.

In a press release issued following Secretary Salazar’s announcement, the Wampanoag Tribe of Gay Head said it was disappointed and would explore all its options including injunctive relief.

Cheryl Andrews Maltais, chairman of the Aquinnah tribe, did not respond to an email seeking comment on the tribe’s plans or the proposed mitigation dollars.

Contract signed

At the same time, Cape Wind is moving quickly to capitalize on its long-awaited approval. On May 7, the company announced it would file a contract with state regulators under which National Grid will purchase half of Cape Wind’s planned electricity for 20.7 cents per kilowatt-hour.

That deal was followed by another under which National Grid would have the authority to wholesale the remaining portion of the electricity that Cape Wind generates. That agreement will help Cape Wind secure financing because a buyer for its power is assured.

The proposed price assumes the receipt of federal tax incentives, and it would rise 3.5 percent per year during the 15-year contract life, according to Cape Wind and National Grid. National Grid estimates the contract will mean its customers will pay $1.59 more per month, or an additional two percent. National Grid has 1.2 million Bay State customers and does not serve Cape Cod.

“We recognize that all renewable energy, be it on- or offshore wind, solar, or other sources, has a cost associated with it,” National Grid president Tom King said in a statement. “Carbon-based generation comes with its own set of long-term costs to our health and our environment. Cape Wind is an investment in our future, and one that we must support if we are to achieve a lower-carbon energy portfolio.”

The contract announcement provided a new target for critics of the project.

Audra Parker, president of the Alliance to Protect Nantucket Sound, which has pushed to have the project moved to a different location, said the announcement “shows that Cape Wind’s power is in fact extremely expensive.”

According to information hosted on the Alliance website, 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 for electricity generated conventionally. Over the course of the contract, the increases would balloon to 420 percent of the current cost of electricity.

“The only thing green about Cape Wind is apparently the money it will take out of the pockets of Massachusetts employers, already struggling with the highest electricity rates in the country,” Robert Rio, senior vice president for government affairs at the Associated Industries of Massachusetts, wrote in a May 7 afternoon post on the organization’s blog.

The National Grid contract announcement also had supporters.

“The contract will ensure price predictability over the long term, helping to get consumers off the fossil fuel price roller coaster, while also bringing the nation’s first offshore wind project to life,” Conservation Law Foundation senior attorney Sue Reid said in a prepared statement.

Ms. Reid said the modest short-term price increase would pay large dividends over time, “in terms of protecting our planet, our health and our economy.”

Ian Bowles, Secretary of the Executive Office of Environmental Affairs, said the Patrick administration is preparing to explore additional wind farms south of Nantucket and Martha’s Vineyard, as state officials attempt to meet the governor’s goal of installing 2,000 megawatts of wind power by 2020. He said he is “confident” Massachusetts would reach the goal.

Asked whether he’s concerned that the Cape Wind deal would increase the cost of electricity for consumers, Gov. Deval Patrick told the State House News Service that electricity prices tripled in the 10 years before he took office. “The only way that you can argue that this is going to cost ratepayers more is if you believe that the cost of generating electricity in the normal way is not going to go up in the future,” he said. “And I don’t think anyone believes that. I certainly don’t.”

Governor Patrick said the Cape Wind project’s finances were “improved by having a long-term agreement.” Project officials have declined to discuss the project’s cost or its sources of funding. Mr. Patrick said the state’s energy supply is mainly generated by natural gas. “In the 10 years before I came into office, electricity prices have tripled,” he said. “They’ve eased off in the last couple of years but as long as electricity is generated by mainly natural gas, and natural gas comes from some of the most volatile communities in the world, then we’re going to continue to see these wild spikes. And the whole idea about breaking our dependence on foreign oil and gas is smoothing out … these spikes.”