Longtime opponents of Cape Wind’s controversial $2.6 billion industrial wind energy proposal off the coast of Cape Cod have filed a new lawsuit, challenging the developer’s state-approved no-bid contract to sell its energy at three times the price of competing out-of-state green energy companies.
The Alliance to Protect Nantucket Sound, the umbrella group for dozens of Cape Wind opponents including the Mashpee Wampanoag Tribe on Cape Cod and the Aquinnah Wampanoag Tribe on Martha’s Vineyard, filed the lawsuit in late January in U.S. District Court in Boston against Massachusetts state regulators, energy company NSTAR and Cape Wind. The lawsuit alleges that state regulators’ approval of the contract between Cape Wind and NSTAR violated federal law in two ways. First, by pressuring NSTAR to buy power from the in-state Cape Wind the regulators discriminated against out-of-state power companies with lower electricity costs, the suit alleges. Second, they exceeded their authority by setting wholesale rates for the contract, an action reserved for the Federal Energy Regulatory Commission (FERC). Audra Parker, the president and CEO of the Alliance to Protect Nantucket Sound, said the organization is confident the suit will succeed.
“It is yet another example of the deficiencies characterizing state and federal decisions that have been made in favor of Cape Wind,” Parker said.
She pointed to recent court decisions in New Jersey and Maryland that not only found state programs directing utilities to sign long-term contracts to be unconstitutional but also raised questions regarding the authority of states in general to direct utilities to purchase wholesale energy under specific state mandates.
“Our case alleges that NSTAR was coerced into signing a no-bid contract that violates federal law, discriminates against affordable green power producers from out of state and burdens small businesses and municipalities with unnecessarily high electricity costs,” Parker said. “The state’s actions on the Cape Wind contract are even more disturbing given the increasing availability of alternative energy sources available at a fraction of the price of Cape Wind.”
This latest lawsuit is one of several still-pending legal challenges to the Cape Wind project, which proposes erecting 130 turbines, each towering 440 feet above the water across a 25-square mile area between Cape Cod, Martha’s Vineyard and Nantucket. Cape Wind has battled its opponents since it was first proposed in 2001. The project has been touted by the Obama administration as America’s first offshore wind farm and enthusiastically supported by Massachusetts state government.
But the project’s wind towers whirring above the shallow waters of Horseshoe Shoal would obliterate the Wampanoag tribes’ unimpeded view of the rising sun. This view is crucial to a ceremony that is central to their identity, and the development could destroy the ocean bed that was once the dry land where their ancestors lived and died.
The lawsuit says the state violated the dormant Commerce Clause of the U.S. Constitution by approving the NSTAR contract. The dormant Commerce Clause prohibits a state from engaging in actions that discriminate against out-of-state businesses and prevents states from engaging in protectionism in which an advantage is given to in-state industries at the expense of out-of-state competitors. The suit also alleges that the contract constitutes illegal regulation of wholesale electricity sales, in violation of the Federal Power Act and the Supremacy Clause of the U.S. Constitution.
In 2011 NSTAR tried to merge with Northeast Utilities, but state regulators refused to support the merger with the Connecticut power company until NSTAR contracted to buy the higher-priced Cape Wind power.
“The Commonwealth used the merger process to gain leverage over NSTAR. The Commonwealth’s Department of Energy Resources threatened to erect various regulatory roadblocks to the merger unless NSTAR executed a contract to buy electricity from Cape Wind,” the lawsuit alleges. “That State action was preempted by the Federal Power Act, which prohibits States from regulating the rates and terms of wholesale electricity sales. Plainly, Massachusetts could not directly order NSTAR to contract with Cape Wind at a State-ordered price. And the Federal Power Act and the Supremacy Clause would be meaningless if States could achieve through regulatory machinations what they are prohibited from doing directly.”
According to NSTAR’s own estimates, the NSTAR–Cape Wind contract will increase the electricity bills of NSTAR customers by nearly one billion dollars over the life of the contract, the suit alleges.
The Alliance to Protect Nantucket Sound was joined in the lawsuit by the Town of Barnstable, Keller Company of Hyannis, Marjon Print and Frame Shop of Hyannis, Hyannis Marina and two individuals.
Joe Keller, President of Keller Company Inc., said in a statement that Cape Wind’s electricity at three times the price of competing out-of-state green energy would put an unfair burden on ratepayers and businesses.
“We understand the need for green sources of energy, but it is unfair to be forced to pay three times the cost of other green energy for Cape Wind,” Keller said. “It is difficult enough to run a business in this state without having to pay exorbitant electric bills that are totally unnecessary.”