NSTAR, the largest utility in Massachusetts, has struck an agreement to purchase electricity from three land-based wind power companies, but did not file a contract to buy from the controversial off-shore Cape Wind project.
Onshore Wind Purchase
NSTAR filed three contracts in February to purchase 108.9 megawatts of onshore wind from New England Wind of Massachusetts, Groton Wind of New Hampshire, and Blue Sky East of Maine. These purchases fulfill a portion of Nstar’s renewable contracting requirement under the Massachusetts Green Communities Act (GCA).
NSTAR hasn’t disclosed the pricing terms for the three contracts, listing them as confidential. However, the three contracts NSTAR signed have fixed rates that will not fluctuate annually.
“We believe the contracts we negotiated represent a good value for onshore wind resources for our customers,” said NSTAR spokesperson Caroline Allen.
Cape Wind’s High Prices
Cape Wind is the nation’s first offshore wind farm, but it has found buyers for only half its wind power. According to Cape Wind Communications Director Mark Rodgers, the offshore wind farm will accomplish job creation, cleaner air, and a reduction in greenhouse gas emissions and will increase energy independence. But wind power is more expensive than conventional power, and it costs more to generate wind power offshore than onshore.
Cape Wind sold 50 percent of its power to National Grid when the Massachusetts Department of Public Utilities approved a contract between the two electric companies last year. Cape Wind and National Grid agreed to a 15-year deal starting at 18.7 cents per kilowatt hour and increasing 3.5 percent annually. That’s nearly twice the average retail price of electricity to U.S. customers, which is 9.62 cents per kilowatt hour, according to the U.S. Energy Information Administration.
Still Seeking Buyers
“NSTAR made an announcement that represents half of the minimum that they need to purchase for clean energy in the near term. They’ll need to purchase more in future years as well,” Rodgers said. “So we’re very optimistic that we’re going to be able to sell more power,”
Allen, meanwhile, expressed satisfaction with the deals NSTAR signed for wind from non-Cape Wind sources.
“We are pleased to be moving forward with these three contracts that we determined would be the most beneficial for our customers while also helping to promote renewable energy development in our region,” Allen said.
Alyssa Carducci ([email protected]) writes from Tampa, Florida.
Electric Power Monthly, February 2011, U.S. Energy Information Administration, pg. 118, http://www.eia.doe.gov/cneaf/electricity/epm/epm.pdf