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Cape Wind Dealt Setback As 2 Utilities End Power Contracts

Two major utilities on Tuesday evening terminated their contracts to buy power from Cape Wind, the long-debated proposed wind farm in Nantucket Sound, saying project managers had missed a crucial deadline.

National Grid and NStar, a subsidiary of Northeast Utilities, say Cape Wind missed the Dec. 31, 2014, deadline contained in the contracts to obtain financing and begin construction, and had chosen not to put up financial collateral to extend the deadline.

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

Cape Wind has proposed a $2.5 billion, 130-turbine offshore wind farm off of Cape Cod. If built, it would be the first offshore wind farm in U.S. waters.

"The deadlines Cape Wind has missed were contractually agreed-upon by both companies," a Northeast Utilities spokeswoman said in a statement late Tuesday. She added: "We remain committed to meeting the commonwealth’s clean energy goals through competitively bid contracts while also keeping prices down on behalf of our customers."

A National Grid spokesman said in a statement the utility is "disappointed that Cape Wind has been unable to meet its commitments." He added: "We will continue to pursue other renewable options, including solar, competitively priced on- and off-shore wind, and other technologies as they become available."

Mark Rodgers, a Cape Wind spokesman, said in an email that the developer does not "regard these [power contract] terminations as valid" because of provisions in the contracts that extend deadlines, including protracted litigation.

Cape Wind cited "extended, unprecedented and relentless litigation by the Alliance to Protect Nantucket Sound that prevents Cape Wind from achieving the [project's] remaining critical milestones."

Audra Parker, president and CEO of the alliance, said in a statement that 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by NSTAR and National Grid to end their contracts with Cape Wind is a fatal or near-fatal blow to this expensive and outdated project."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 added: "It's very bad news for Cape Wind, but very good news for Massachusetts ratepayers who will save billions of dollars in electric bills."

Without buyers for its power, Cape Wind's ability to secure financing needed for the project would become all but impossible.

Ian Bowles, who as Gov. Deval Patrick's first energy and environment chief helped shepherd the offshore project, said the project may be dead.

"Presumably, this means that the project doesn't go forward," he told The Boston Globe.

Patrick, a strong supporter of the project, issued a brief statement Wednesday that did not refer directly to Cape Wind, but expressed confidence in offshore wind energy.

"The future of off-shore wind in the Commonwealth remains bright, as does the path for the marine commerce terminal in New Bedford," said Patrick, who leaves office Thursday.

Cape Wind signed a lease agreement with the state in September to use New Bedford for staging and construction of the project.

Matthew Beaton, who is the energy secretary-designate of Gov.-elect Charlie Baker, told WBUR the utilities' decisions will not affect other renewable energy projects.

"As we go into the new administration, we're going to look at every form of renewable energy

electricity and weigh them on their merits and on their effectiveness to generate electricity at a reasonable price," he said.

With reporting by the WBUR Newsroom and The Associated Press

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