Update On That Nantucket Wind Farm: Cape Wind; Massachusetts Looking To Pay 3X More/KWH of Electricity

Updates

December 2, 2017: dead, RIP.  

Original Post

 
A New Bedford, Massachusetts, paper is reporting:

Cape Wind is poised to take another step in securing the financial underpinnings for its proposed Nantucket Sound wind farm.

The project, which is expected to cost $2.6 billion, will be financed through a combination of equity from investors and loans from banks and other institutions.

The company will tap the Bank of Tokyo-Mitsubishi UFJ as the lead bank in securing debt for the project, Cape Wind President Jim Gordon said at a renewable power finance conference last week in New York.

The multinational bank, which is based in Japan, is expected to coordinate $1.8 billion to $2 billion in debt financing for the project, according to Power Intelligence, a financial publication specializing in the energy industry.

The bank is also expected to convert a federal production tax credit into cash.

I doubt this is of much concern:

Cape Wind officials have said they hope to begin construction this year, which is necessary for the company to benefit from the federal production tax credit that expires Dec. 31.

If construction does not begin this year, Congress will extend the law. In any event, it doesn't take much to "start" construction. 

This is the real drop-dead date: if the project is not started by the end of 2015, prior agreements with utilities terminate. And another Solyndra?

The possibility of a loan guarantee for the project has drawn criticism from Cape Wind's opponents and Republicans who point to $535 million in federal loans to bankrupt solar energy giant Solyndra.

Cape Wind officials are also still looking for a buyer for about a quarter of the wind farm's power, although the company could move forward with a smaller project if necessary.

National Grid has agreed to buy 50 percent of Cape Wind's power and NStar has agreed to buy 27.5 percent of the power, both at a starting price of 18.7 cents per kilowatt-hour.

An annual 3.5 percent increase will kick in starting in 2014, raising the cost of Cape Wind's power over 19 cents per kilowatt-hour. [For newbies: coal and natural gas: about 6 cents/kwh.]

If Cape Wind does not begin construction by the end of 2015, the power purchase agreements with NStar and National Grid will be terminated, according to an amendment to the National Grid contract filed last week.

While Cape Wind supporters say the price is small when mixed with the cost of other sources of power the utilities buy and spread across all of the companies' customers, opponents of the project continue to rail against what they see as the project's exorbitant cost to consumers.