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Utility NSTAR's no-bid contract to purchase electricity from the Cape Wind offshore wind farm at three times the price of competing out-of-state green energy violates federal law and would unfairly burden ratepayers, claims a new lawsuit filed in U.S. District Court by the Town of Barnstable, businesses, residents and the Alliance to Protect Nantucket Sound. The alliance notes this action is one of several pending legal challenges to the 468 MW Cape Wind project, proposed off the coast of Nantucket Island.

The new suit against Massachusetts regulators, NSTAR and Cape Wind alleges the State discriminated against out-of-state companies by pressuring NSTAR to buy power from in-state generator Cape Wind. The suit also claims Massachusetts regulators exceeded their authority in setting wholesale rates for this contract.

"This state action was illegal for two independent reasons. First, it constituted illegal discrimination in favor of an in-state business, in violation of the dormant Commerce Clause of the U.S. Constitution," the suit alleges. "Second, it constituted illegal regulation of wholesale electricity sales, in violation of the Federal Power Act and the Supremacy Clause of the U.S. Constitution."

"We understand the need for green energy, but it is unfair to be forced to pay three times more for Cape Wind," says plaintiff, Joe Keller, president of Keller Company Inc.

The suit claims NSTAR sought to comply with the Massachusetts requirement that a percentage of power come from renewable sources by buying green energy that was cheaper than Cape Wind. However, the complaint alleges that state regulators refused to support NSTAR's long-sought merger with Northeast Utilities until NSTAR contracted to buy the higher priced Cape Wind power.

"According to NSTAR's own estimates, the unconstitutional NSTAR-Cape Wind contract will increase the electricity bills of NSTAR customers by nearly 1 billion dollars over the life of the contract," the suit alleges.

Audra Parker, president and CEO of the Alliance to Protect Nantucket Sound, comments, "Our case alleges that NSTAR was coerced into signing a no-bid contract that violates federal law. The State's actions are even more disturbing given the increasing availability of alternative energy available at a fraction of Cape Wind's price."



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