Cape Wind energy project dealt setback as 2 utilities terminate contracts to buy power

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BOSTON — The decision by two major utilities to terminate their contracts to buy power from the proposed $2.5 billion wind farm in Cape Cod waters could kill the project, according to supporters and detractors of the plan.

National Grid and NStar — a subsidiary of Northeast Utilities — said Tuesday they ended their contracts because Cape Wind missed a Dec. 31 deadline set out in the 2012 deals to obtain financing and begin construction, and had chosen not to put up financial collateral to extend the deadline.

"Unfortunately, Cape Wind has missed these critical milestones," NStar spokeswoman Caroline Pretyman said via email. "Additionally, Cape Wind has chosen not to exercise their right to post financial security in order to extend the contract deadlines. Therefore the contract is now terminated."

National Grid issued a similar statement.

"National Grid is disappointed that Cape Wind has been unable to meet its commitments under the contract, resulting in today's termination of the power purchase agreement," spokesman Jake Navarro said in an email.

Cape Wind has proposed a 130-turbine offshore wind farm in Nantucket Sound. If built, it would be the first offshore wind farm in U.S. waters.

NStar had agreed to buy 27.5 percent of Cape Wind's power. National Grid had signed on to purchase 50 percent.

But Cape Wind spokesman Mark Rodgers said the developer does not "regard these terminations as valid" because of provisions in the contracts that would extend the deadlines, including the effects of protracted litigation by opponents of the project.

Cape Wind president James Gordon in letters dated Dec. 31 to both utilities and state regulators asked that the utilities hold off on voiding the contracts, citing "extended, unprecedented, and relentless litigation by the Alliance to Protect Nantucket Sound," the leading foe of the project.

Gov. Deval Patrick, a strong supporter of the project, told reporters Wednesday he didn't know if the project could survive.

"We've done everything as a state government to get them over the regulatory lines and I've said before, and I say again, after that it's up to the market and up to the leadership of the project and their partners to get it done," Patrick said.

Patrick also noted that the project, which has been in the planning stages for more than a decade, has faced a number of setbacks, "the most significant of which has been perpetual litigation."

Audra Parker, alliance president and CEO, said the utilities' decisions does not bode well for the project.

"The decision by NStar and National Grid to end their contracts with Cape Wind is a fatal or near-fatal blow to this expensive and outdated project," she said.

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