Energy companies Northeast Utilities (NYSE:NU) and NStar have agreed to buy 27.5 percent of the power produced by the long awaited Cape Wind offshore wind farm as a condition of the two companies proposed merger, state officials announced on Wednesday
This could potentially be a major victory for what stands to be the nation’s first offshore wind farm.
The Cape Wind Project has already sold 50 percent of its power to National Grid, but has had a rough go of it trying to procure buyers for the rest of the power it will produce.
Cape Wind officials hope the recently announced deal with Northeast Utilities will attract more private financers to purchase the remaining power that will be produced by the offshore facility.
Under the terms of the agreement, made between the state and Northeast Utilties, a four-year freeze on base energy distribution rates coupled with a one-time $21 million credit will be installed for the benefit of the ratepayers, who stand to save roughly $217 million according to Attorney General Martha Coakley.
According to Secretary of Energy and Environmental Affairs Richard Sullivan Jr., the average household can expect to see a one-time savings of $12 to $15, and any job reductions that occur as a result of the merger would be prohibited under the agreement from disproportionally impacting Massachusetts.
The Cape Wind project was proposed to state officials in 2001 but has since been met with heavy resistance.
Opponents to the project say its over priced, claiming the starting price in the National Grid deal is 18.7 cents per Kilowatt hour and will increase annually, opposed to land wind which can be harnessed for 10 cents an hour.
Others reject to the project because they claim the wind turbines will mar a pristine area. Numerous lawsuits are pending against the project.
Cape Wind officials have responded to critics, claiming the project will create local jobs and jump-start a new industry all while reducing carbon emissions.
Secretary of Environmental Affairs Richard Sullivan says he is confident the deal will go through but alluded to a contingency plan in which the combined NStar-Northeast Utilities company would have to buy a corresponding energy load from other renewable energy sources.