Free Markets, Free People
Well, well, well – “green energy” costs strike again. You remember the controversial off-shore wind turbine project that was proposed for an area off the coast of Cape Cod in Massachusetts? Well it finally got approved. And surprise – it’s revised costs has the project in “Big Dig” territory:
The controversial Cape Wind project will cost taxpayers and ratepayers more than $2 billion to build – three times its original estimate.
That colossal cost is the driving force behind the sky-high electric rates it plans to charge Massachusetts customers in coming years.
Cape Wind, which wants to build 130 wind turbines off the coast of Cape Cod, and National Grid announced yesterday that they’ve reached an agreement to start charging customers 20.7 cents per kilowatt hour in 2013 – more than double the current rate of electricity from conventional power plants and land-based wind farms.
Under the 15-year National Grid contract, the price of Cape Wind’s electricity would increase 3.5 percent each year, pushing the kilowatt price to about 34.7 cents by the time the contract ends.
The current price of National Grid’s non-wind electricity is now about 9 cents per kilowatt. That means the cost of fossil-fuel generated electricity would have to increase nearly four-fold just to keep pace with Cape Wind’s prices over the next 15 years.
This little doozy is now on the planning boards – another, in a long line of costly projects backed by government that will cost consumers more than it’s worth and not deliver that much in terms of increased energy – certainly not that much if you look at the price.
“I’m glad it’s your electric bills and not mine,” said Robert McCullough, president of McCullough Research, an Oregon energy consulting firm, referring to Cape Wind’s prices.
He said Massachusetts would have been better off going with less costly land-based wind farms.
“Why are you spending billions (on offshore wind) when you can pay half that with traditional wind?” he asked.
You tell me? And, by the way, how did the costs of building the system suddenly triple? This was only discovered after approval had been granted? Oh – wait a minute:
Three sources familiar with the Cape Wind-National Grid negotiations confirmed yesterday that Cape Wind’s final price tag will be above $2 billion.
Because of available federal tax credits, Cape Wind could reap about $600 million in taxpayer subsidies if the final cost is $2 billion, in addition to its higher power rates.
So the incentives are provided by government? Does this make Cape Wind a “greedy utility?”
Oh, and I love this:
Cape Wind president Jim Gordon yesterday again refused to say how much construction will cost, citing competitive talks he’s now in with construction companies.
Cape Wind and National Grid, which is planning to buy half the energy the wind farm will produce, said their rate deal will add about $1.59 a month, or about 5 cents a day, to the current ratepayer’s bill in 2013.
“The question is whether folks are prepared to pay five cents a day for a better energy future,” said Gordon.
The answer should be “no, they’re not. Either build the project at the original price, bring it on shore if that isn’t possible or forget it.”
The pricing has to be approved by Massachusetts Department of Public Utilities, but I don’t think there’s much of a question as to how that will go:
Ian Bowles, Gov.Deval Patrick’s secretary of energy and environmental affairs, said the National Grid prices are competitive if renewable energy credits are deducted.
Those who aren’t politicians interested in building a green energy legacy this say otherwise:
But energy experts said the proposed National Grid rates, especially with the annual inflation adjustments, add up to a very high price.
“This would seem to me to be a most unwelcome additional energy tax” on customers, said Peter Beutel, an energy analyst at Cameron Hanover in Connecticut.
And that’s precisely what this ends up being – a energy tax to build something that could be build cheaper on shore and which, in reality, won’t add that much energy to the national grid. A rather dubious recommendation for its continuance. I don’t know about you but if I were a citizen of Massachusetts, I’d be raising hell about this and demanding the project be shelved until it can be shown to deliver the promised “clean, green, renewable and cheaper energy” Greenies are always telling everyone these sorts of projects will deliver.