December 1, 2010 - Cape Wind contract challenged?

Wednesday, December 1, 2010

Breaking news: today, a group including an organization called "Californians for Renewable Energy" (CARE) filed a complaint with the Federal Energy Regulatory Commission (FERC) against National Grid, Cape Wind and the Massachusetts Department of Public Utilities for approval of Cape Wind's power purchase agreement with National Grid.  FERC has docketed this as docket no. EL11-9-000.

As you may know, the Massachusetts DPU issued an order approving the PPA between Cape Wind and National Grid.  Under the deal, National Grid will buy half of Cape Wind’s output for 18.7 cents per kilowatt-hour, with a 3.5% annual escalator in each of the 15 contract years.

The incendiary Complaint opens with the following summary alleging "ongoing conspiracy" to violate the FPA as well as fraud:

Pursuant to the Federal Power Act (“FPA”), 16 U.S.C. 824d, 824e, 825e, and 825h, (2008) and Rule 206, 16 C.F.R. 385.206 (2008) of the Rules of Practice and Procedure (“Rules”) of the Federal Energy Regulatory Commission (“FERC”), CAlifornians for Renewable Energy, Inc. (“CARE”) and Barbara Durkin hereby files this Complaint against the National Grid, Cape Wind, and the Massachusetts Department of Public Utilities (“DPU” or “Mass DPU”), for their ongoing conspiracy to violate the Federal Power Act (“FPA”) by approving contracts for capacity and energy that exceeds the utilities’ avoided cost cap and which also usurps FERC’s exclusive jurisdiction to determine the wholesale rates for electricity under its jurisdiction within those territories that it exercises regulatory authority and further for National Grid and DPU and aiding and abetting Cape Wind’s fraudulent actions and claims to defraud taxpayers of ARRA stimulus funds it is seeking for the project in violation of 18 C.F.R. § 1c.
These are serious and bold allegations indeed.

So who is CARE?  CARE describes itself in the Complaint as "a nonprofit corporation that works to educate and encourage the use of alternative forms of renewable energy to avoid dependence on declining supplies of fossil fuels, and the harmful air emissions their use entails. All of CARE’s members are residential or small business customers."

What is CARE's interest in this?  CARE claims that the alleged actions "harm the interests of CARE’s members by allowing Cape Wind Associates a competitive advantage over land-based wind farm developers who must meet stricter requirements for environmental mitigation and monitoring, including preconstruction monitoring for species protected by the ESA".

Other highlights worth further probing include extensive paragraphs devoted to an attempt to link the Cape Wind project to Italian organized crime.  (See page 26 for some of the most lurid of that text.)

At 51 pages, it is a broad-ranging complaint.  Here is a link to the FERC docket sheet if you are interested.  I will be watching this docket with great interest to see how the Cape Wind PPA weathers this challenge.

[Update 12/2/2010: see my next blog post for a deeper look at the Complaint.]

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