Cape Wind gets a boost from CEOs

By D.C. Denison
Globe Staff / July 1, 2010

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The giant retailer Wal-Mart and one of the state’s largest business groups may have expressed concern about the high cost of Cape Wind’s electricity, but several chief executives say they are willing to pay more for clean energy.

Scott Griffith, chief executive of ZipCar Inc., said the company “would support a small premium’’ for power from the proposed wind farm.

“There’s always going to be an early premium for these new pioneering technologies,’’ he said.

Paul Sagan, chief executive of Akamai Technologies Inc., said the issue of whether businesses are willing to pay more for wind power is “a false question.’’ The current price of convention al energy is artificially low, he said.

“You don’t have to look any further than the Gulf of Mexico to see that the price at the pump is not the full cost we’re paying for our energy.’’

The price of Cape Wind power was discussed at a forum held at Akamai’s Cambridge headquarters yesterday by the Progressive Business Leaders Network, an advocacy group that supports the wind farm proposal. About 50 group members and invited guests attended the event, which featured presentations from Cape Wind developer Jim Gordon and Richard Rapp, senior vice president of National Grid, the largest utility in the state.

The utility negotiated a 15-year agreement to buy electricity from Cape Wind, a 130-turbine wind farm proposed for Nantucket Sound. National Grid agreed to pay a wholesale cost of 20.7 cents per kilowatt hour in the first year of the deal, much more than the rates it now charges for electricity sold to retail customers, and to raise that price annually for the life of the contract.

The price would not cause residential electric bills to double, however, because only a small portion of National Grid’s power would originate with the wind farm.

Two weeks ago, Wal-Mart Stores Inc. said in a filing with the state, which must approve the contract, that the prices negotiated by Cape Wind and National Grid will lead to higher costs for the retailer.

There has also been active opposition to Cape Wind from Associated Industries of Massachusetts, the state’s largest employer group, among others. The organization’s senior vice president, Robert Rio, told the Globe last month that the state should closely examine the proposed contract.

“This is a complicated, expensive process, representing billions of dollars in additional ratepayer costs,’’ Rio said.

At the forum yesterday, Cape Wind’s Gordon stressed that the price may ultimately be reasonable, if the cost of fossil fuels rises as the economy recovers.

“The cost of our present energy system does not show up on your monthly energy bill,’’ he said, adding that wind energy would reduce pollution, oil tanker traffic in the region, carbon emissions, and the military costs of defending Persian Gulf oil supply lines.

National Grid’s Rapp said that the utility was not insensitive to cost increases, but that buying power from Cape Wind was the right thing to do to achieve National Grid’s carbon reduction goals.

Executives at the session raised few objections to the higher energy costs set by the contract. ZipCar’s Griffith said his company would not initially pass such a premium on to its customers, but he added that it would have to periodically assess whether to charge customers for extra costs from the use of Cape Wind power.

Gordon also asked executives at the event to write to Thomas May, chief executive of NStar, the state’s second-largest utility, urging him to follow National Grid in buying Cape Wind power.

NStar’s May has said that he supports alternative energy but is not counting on Cape Wind to meet state requirements that utilities buy a percentage of their power from renewable energy producers. In an interview with the Globe earlier this year, May said, “Clean energy isn’t cheaper energy.’’

D.C. Denison can be reached at