BOSTON – Electricity from the Cape Wind project will cost less than initially proposed after the state attorney general struck an agreement in principle with the developer.
Mass. Attorney General Martha Coakley announced Friday that her office negotiated a new deal between Cape Wind and National Grid that reduces the cost of electricity sold up to $456 million during the life of the 15-year contract.
The price of electricity during 2013, the first year of operation, will fall to 18.7 cents a kilowatt-hour, down from the 20.7 cents initially proposed. As with the original proposal, the price will escalate 3.5 percent each year.
The attorney general said the price of electricity would fall further if Cape Wind achieves savings by securing federal loan guarantees or a reduction in construction costs. Cape Wind has been trying for years to construct 130 wind turbines in Nantucket Sound.
“This agreement accomplishes two important goals – working to develop renewable energy, specifically off-shore wind in Massachusetts, and ensuring customers get the benefits of this project under a much fairer price than what was originally proposed,” Coakley said.
The companies must still file a revised contract with the Mass. Department of Public Utilities, which must sign off on the deal.
The announcement comes as regulators in neighboring Rhode Island mull a proposed 20-year contract between National Grid and Deepwater Wind, which wants to build an eight-turbine farm off the coast of Block Island. The cost of electricity from that farm would start at 24.4 cents a kilowatt-hour and rise 3.5 percent each year.