The Massachusetts Supreme Judicial Court (SJC) has unanimously upheld a hotly contested long-term power purchase agreement (PPA) between Cape Wind and utility National Grid, citing determinations found by the state's Department of Public Utilities (DPU).
Several groups had argued before the court, claiming the contract for Cape Wind ‘sets a risky precedent by allowing utilities to negotiate expensive power agreements outside of the competitive bidding process and to allocate the costs of those contracts unfairly to residential and commercial customers.’
They also argued that the PPA ‘amounts to an unconstitutional restriction on interstate commerce because lower-priced out-of-state renewable energy projects were excluded from consideration.’
However, the SJC ruled in favor of the Cape Wind PPA, upholding an earlier determination by the Massachusetts DPU that the contract was in the best interest of the public.
‘In sum, our review of the record indicates that there was clearly sufficient evidence of which the department could base its conclusion that the special benefits of PPA-1 exceeded those of other renewable energy resources, and we uphold the department's conclusion that approval of the contract was in the public interest," the court said.
The DPU had determined that Cape Wind would lower regional energy costs through ‘price suppression,’ described as ‘the reduction of wholesale energy market clearing prices that results from the addition of low-cost generation resources.’
The DPU reviewed the Cape Wind PPA during a five-month adjudicatory proceeding involving 22 different parties. Supporters and opponents of the PPA made their case and called witnesses. In the end, the DPU concluded that the Cape Wind project would provide substantial benefits.
‘The evidence in this proceeding makes it clear that the Cape Wind project offers unique benefits relative to the other renewable resources available," the DPU said. "In particular, the project's combination of size, location, capacity factor, advanced stage of permitting and advanced stage of development is unmatched by any other renewable resource in the region for the foreseeable future."
"This combination of benefits will significantly enhance the ability of National Grid to achieve renewables and greenhouse-gas emissions-reduction requirements," the DPU added.
Many state officials, including Massachusetts Energy and Environmental Affairs Secretary Richard K. Sullivan Jr., expressed support for the SJC's decision.
"Cape Wind will create local jobs, reduce our dependence on foreign sources of energy and is poised to kick-start a new U.S. industry by making Massachusetts the site of the country's first offshore wind farm. We welcome today's decision," Sullivan said.