February 2, 2014

Cape Wind's Legal Victory Tainted by New Lawsuit

Cape Wind, potentially the country's first offshore wind farm located between the southern coast of Cape Cod and Nantucket, is celebrating the approval by the U.S. Court of Appeals for the District of Columbia Circuit, upholding the Federal Aviation Administration's (FAA) approval of the Cape Wind project. However, Cape Wind is not in the clear when it comes to being sued.

"The Alliance to Protect Nantucket Sound, the Town of Barnstable and their financial backer-coal billionaire Bill Koch -- have failed yet again in their continuing campaign to use the courts to delay the financing of Cape Wind," Mark Rodgers, Cape Wind communications director, said. "The court's definitive decision is an important legal victory that brings America that much closer to launching its offshore wind industry, a keystone in America's renewable energy future."

On February 9, 2012, the FAA issued a Public Notice stating that "none of the turbines would have an adverse effect on the use of air navigation facilities or navigable airspace."

"This is a very important decision for this project and for wind power generation in general. It demonstrates that the expert federal agencies with the responsibility for reviewing these projects thoroughly evaluate them and the courts uphold the agency decisions," said Geraldine Edens, BakerHostelter litigation counsel for Cape Wind.

There are global implications of the approval, as well.

"From a more global perspective, the decision is good news for project developers where multiple agency reviews are involved," said BakerHostelter litigation counsel for Cape Wind, Christoper Marraro. "The Court makes clear that opponents don't get second and third bites at the National Environmental Policy Act apple just because multiple agencies have some type of jurisdiction over the project.

In the Cape Wind decision, the U.S. Court of Appeals for the District of Columbia Circuit stated that the National Environmental Policy Act's (NEPA) "rule of reason" doesn't require an agency to prepare an environmental impact statement where it would serve no purpose. 

"In this case, the Court held that there is no need for FAA to duplicate Interior's NEPA analysis because it ruled that where an agency lacks power to act on whatever information might be contained in the EIS, NEPA does not apply…'" said Marraro.

Although Cape Wind has received a positive conclusion in one suit, it is immediately facing another lawsuit. According to a U.S. District Court filing by the Town of Barnstable, businesses, residents, and the Alliance to Protect Nantucket Sound, NSTAR's no-bid contract to purchase electricity from Cape Wind at three times the price of competing out-of-state green energy violates federal law and would unfairly burden ratepayers.

The suit against Massachusetts regulators, NSTAR, and Cape Wind says the State discriminated against out-of-state companies -- despite their lower costs -- by pressuring NSTAR to buy power from in-state generator, Cape Wind.  Massachusetts regulators also exceeded their authority in setting wholesale rates for this contract, according to the suit.

The suit alleges that the state action was illegal because it constituted illegal discrimination in favor of an in-state business, in violation of the dormant Commerce Clause of the U.S. Constitution. Further alleged is that it constituted illegal regulation of wholesale electricity sales, in violation of the Federal Power Act and the Supremacy Clause of the U.S. Constitution.

The suit says that NSTAR sought to comply with the Massachusetts requirement that a percentage of power come from renewable sources by buying green energy that was cheaper than Cape Wind. However, the complaint alleges that state regulators refused to support NSTAR's long-sought merger with Northeast Utilities until NSTAR contracted to buy the higher priced Cape Wind power.

"According to NSTAR's own estimates, the unconstitutional NSTAR-Cape Wind contract will increase the electricity bills of NSTAR customers by nearly one billion dollars over the life of the contract," the suit alleges.

Recent court decisions in New Jersey and Maryland found that state programs directing utilities to sign long-term contracts were unconstitutional.

"Our case alleges that NSTAR was coerced into signing a no-bid contract that violates federal law," said Audra Parker, President and CEO of the Alliance to Protect Nantucket Sound.  "The state's actions are even more disturbing given the increasing availability of alternative energy available at a fraction of Cape Wind's price."

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