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State Regulators Approve Cape Wind Power Deal

Massachusetts regulators have approved a power-purchase deal between the nation's first offshore wind farm and its first customer.

The Department of Public Utilities on Monday approved a pact between the utility National Grid and Cape Wind, a 130-turbine wind farm planned for Nantucket Sound.

National Grid signed a 15-year deal to buy half the power generated by Cape Wind, and the DPU was charged with deciding if it was a good deal for ratepayers.

"Based on the range of forecasts used in this case, it appears that the contract could increase the bills of National Grid residential customers by roughly 1.3 to 1.7 percent, and the bills of large commercial and industrial customers by roughly 1.7 to 2.2 percent," the department wrote in its 374-page decision. "We find that this increase in electricity bills is acceptable, given the significant and unique benefits of the project."

National Grid agreed to a starting price of 18.7 cents per kilowatt hour, about twice what it pays for power from conventional sources.

Critics argued the price was too high.

"Any gains or any benefits from Cape Wind would have been gotten the same way if other renewable projects would have been chosen," said Robert Rio, of Associated Industries of Massachusetts. "Cape Wind represents the most expensive renewable project in the market today."

But National Grid said Cape Wind's power was needed to meet statewide renewable energy requirements and supporters say the deal will save ratepayers money long-term.

"The path toward America’s clean energy future hasn’t been an easy one, but that future is looking brighter — and closer," wrote Kit Kennedy, energy counsel for the Natural Resources Defense Council, in a blog post.

Critics said they will appeal the DPU order. A Cape Wind spokesman noted that the project's opponents have an 0-15 legal track record.

WBUR's Benjamin Swasey and Rachel Rohr contributed reporting.

-- Here's the DPU decision (on Scribd).

This program aired on November 22, 2010. The audio for this program is not available.

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