Two Stories on Wind: Nothing To Do With The Bakken; Maryland Wind; North Dakota Taxpayers Will Help Pay for Massachusetts Off-Shore Wind Farm

Updates

February 11, 2013: even the Washington Post can see through this scam. But, remember, Maryland was also the state that was going to mandate that rats could not be killed; they had to be "humanely caught," and relocated. And relocated not just anywhere but back "within their own families." I can't make this stuff up.

Original Post

A reader sent this link -- a number of interesting story lines:

After years of trying, Maryland Gov. Martin O’Malley is poised to win approval from state lawmakers in the coming weeks for a field of towering windmills in the Atlantic Ocean.

But the tortured process of garnering support has left O’Malley (D) with a project so small — one able to generate just half the energy of a single power plant — that developers and banks probably won’t take the financial risk, experts predict.

The reader noted these excerpts:

To win over others, he has limited the cost of the subsidy to about $1.50 a month per household. The subsidy will amount to $2.5 billion over 20 years.

In addition, to secure what might be crucial votes from a handful of African American lawmakers, the governor added millions in costs to help minority businesses gain a foothold in the industry.

Lawmakers also grew skeptical after learning that O’Malley’s former chief of staff was involved in one of eight bids to become the developer and get the subsidy.

In addition to this, something is also very interesting: look at the map at the link -- the "wind planning areas in the Atlantic ocean." It is noted that no wind farms have been built in any of these planning areas. To the best of my knowledge, this includes Cape Wind, off Nantucket, Massachusetts.

So, the update on Cape Wind:

The last-minute fiscal cliff agreement not only resolved the debate in Washington over tax rates, it also extended the nation’s wind energy tax credits for another year. The extension was a big break for Cape Wind, but not as big as you might think. With the blessing of state regulators, Cape Wind had already protected itself financially in case the credits were allowed to lapse.

The fine print of the power purchase contracts Cape Wind negotiated with National Grid and NStar guarantees the Nantucket Sound wind farm a base rate for its electricity if it qualifies for the tax credits and higher, compensatory rates if it does not.

Now, with Congress extending the wind tax credits and Cape Wind likely to qualify for them this year, the higher electricity rates will probably be avoided. In other words, federal taxpayers will pick up a significant chunk of the cost of Cape Wind instead of Massachusetts utility customers.

Deeper into the article:

What Rodgers didn’t mention in his statement was that Cape Wind had already partially insulated itself from any Washington inaction on the wind credits.

The wind farm’s contracts with National Grid and NStar require the utilities to pay Cape Wind higher rates if the wind farm fails to qualify for the tax credits. Those higher rates would be passed along to the utilities’ customers.

According to the National Grid contract with Cape Wind, the wind farm will be paid 18.7 cents per kilowatt hour initially, a price that rises 3.5 percent a year for 20 years. If Cape Wind qualifies for the production tax credit but not the investment tax credit, the initial price paid to Cape Wind would be increased to 22.8 cents per kilowatt hour. If Cape Wind qualifies for neither tax credit, the price would be increased to 23.5 cents per kilowatt hour.

In other words, the price of Cape Wind power would go up 25 percent if the wind farm failed to qualify for the tax credits. In testimony before state regulators, utility officials said the price increases would offset only about half of Cape Wind’s revenue loss from a failure to secure a federal tax credit.

Cape Wind is expected to begin construction this year.

For archival purposes; not relevant to the Bakken, but helps put things into perspective.