Following an eight month review, state utility regulators Monday approved NStar’s 15-year contract to buy power from Cape Wind, a deal expected to only moderately increase the average residential customer’s monthly electric bill.
The Boston-based utility will purchase 27.5 percent of the power generated by the offshore renewable energy project for a starting price of 18.7 cents per kilowatt hour in 2013. The cost paid by the utility will then rise by 3.5 percent each subsequent year.
NStar electric customers can expect to see their bill rise by about $1.16 a month, on average.
Regulators signed off on the deal after finding the “benefits of the contract exceeded its costs” and that it provides “adequate protection” for ratepayers, according to a statement from regulators at the Massachusetts Department of Public Utilities. The wind farm will also help the state meet its aggressive goals to use more renewable energy sources and reduce greenhouse gas emissions.
“This contract supports the largest renewable energy project proposed in New England while providing protections to consumers against the volatility of fossil fuel prices,” said Ann Berwick, chair of the DPU.
The utility agency’s approval was largely expected given that regulators approved a similar deal between Cape Wind and National Grid in November 2010. National Grid agreed to buy half of Cape Wind’s power at the same price per kilowatt that NStar will pay.
Finding paying customers such as NStar was considered a key step for Cape Wind to attract financing to build the controversial wind farm, which has federal approval but still faces opposition.