New England Utility Rate Payers Well Served By Their Elected Leaders

Coal: 6 cents/KWH

Boston's Cape Wind: 20 cents/KWH --> 30 cents/KWH in the outyears -- at cut rate prices (and probably a loss, at that)

Meanwhile (2nd story below): Minnesota Power looking to put 51 bird killers
 in center of North Dakota's migratory flyway

The lede: 

Boston utility NStar has agreed to pay a starting price for power from Cape Wind project that is substantially higher than the cost of conventional energy and would add about $1 to customers’ monthly bills in the first year the offshore wind farm generates electricity, according to a 15-year contract filed with state regulators Friday.

The article continues:

The price, 18.7 cents per kilowatt hour, is the same as what National Grid agreed to pay when it signed a contract in 2010 to purchase half the power generated by Cape Wind. NStar’s deal is to purchase 27.5 percent of the wind farm’s total output. Since the Cape Wind power represents only about 2 percent of the energy distributed by NStar, it is expected to have a moderate impact on the average customer’s bill, $1.08 a month. Customers in the Boston area pay about $86 a month.

The utilities currently pay about 8 cents per kilowatt hour for electricity, and NStar originally balked at becoming a Cape Wind customer, arguing the wind farm’s cost was too high. That position changed last month, when, after nearly a year of negotiations, state energy officials agreed to endorse a proposed merger between NStar and Connecticut-based Northeast Utilities if NStar made several concessions, including buying power from Cape Wind.

As with National Grid, the price that NStar pays for Cape Wind’s power will increase by 3.5 percent each year to adjust for inflation. By the end of the contract, NStar will pay just over 31 cents per kilowatt hour.

The $1.08 is inconsequential. This is not the story. The rest of the story:

The NStar contract is a milestone for Cape Wind, providing the project with enough assured sales to attract financing. The 130-turbine wind farm is expected to cost more than $2 billion to build in Nantucket Sound.

And the nut of the story:

“Cape Wind would have a substantial impact in reducing spot market prices,’’ said Mark Rodgers, a Cape Wind spokesman. “That ultimately filters back to all of us electricity consumers in New England.’’

Rio, meanwhile, said he thinks that any such savings would actually be “incredibly minuscule.’’

“I don’t know if you’ll ever be able to make money on this thing,’’ he said. “It’s real fuzzy math.’’

My hunch is that ten years from now: a) no Cape Wind; or, b) the "company" will be asking for subsidies from the state government to stay in business. The Netherlands has pulled the plug on wind energy; it makes no economic sense for the Netherlands, even where natural gas is upwards of $12 for mcf in Europe, compared to $2.40 and falling in the US. 

If natural gas is becoming cheaper than coal, this new deal paying 20 cents/kwh for wind is even more disturbing.

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Meanwhile, Minnesota Power would like to put 51 bird killers in the middle of the migratory flyway in central North Dakota.  Link at Bismarck Tribune for those interested. Interestingly enough, I hear nothing from the Audubon Society or Ducks Unlimited regarding these travesties.