Settlement filed with DPU Wednesday
Requires NSTAR and NU to purchase more clean energy if merger is to move forward
Governor Deval Patrick's office announced today, that the Department of Energy Resources (DOER) and NSTAR filed a proposed settlement agreement that stipulates a series of provisions as conditions of NSTAR's proposed merger with Connecticut-based Northeast Utilities with the Department of Public Utilities (DPU). If the merger is approved, NSTAR will be required to freeze base distribution rates for four years, provide a one-time rate credit of $21 million to residential customers and purchase more clean energy.
"I am proud of this agreement, which was negotiated by our Administration in an effort to cap rates and hold utilities accountable to customers," said Governor Patrick. "Thanks to this work, DPU is now set to consider a plan that delivers benefits to customers in the form of lower costs and better service, upholds the utilities’ commitment to Massachusetts’ communities and devotes unprecedented resources to our clean energy future."
On the clean energy front, the proposal requires the merged entity to purchase an additional 129 megawatts (MW) of clean energy. NSTAR has agreed to enter into a 15-year contract to purchase 27.5 percent of the electricity output from Cape Wind, the offshore wind energy project planned for Nantucket Sound. Cape Wind already has an agreeement with National Grid to purchase of 50 percent of its electricity output. With almost 80 percent of their energy purchased, Cape Wind is poised to move forward with financing and construction of the highly anticipated clean energy project.
Jim Gordon, President of Cape Wind, released the following statement today regarding the filing of the settlement agreement:
"Today's announcement by Governor Patrick represents a major step forward in making Massachusetts a leader in offshore wind power and attaining the jobs, clean air and energy independence benefits that Cape Wind will provide. By including Cape Wind in this utility merger Settlement Agreement, NSTAR and the Patrick Administration are helping ensure that Cape Wind will supply up to 500,000 homes with locally harvested renewable energy and create hundreds of new jobs. While Massachusetts may be at the end of the energy pipeline for oil, coal and natural gas, we do have an abundant and inexhaustible supply of offshore wind and we will harness it for a better energy future. Today's announcement also affords NSTAR and its customers the unique opportunity to bring to fruition the critical objectives adopted by the Legislature when it unanimously enacted the landmark Green Communities Act in 2008, namely reductions in pollution and greenhouse gas emissions, increased electric reliability and sustainable economic development. While future fuel prices are uncertain, the Massachusetts Department of Public Utilities has determined that Cape Wind provides a unique set of benefits for Massachusetts and is cost-effective and will place downward pressure on wholesale energy prices while avoiding the external costs of burning fossil fuels. We are excited to move forward."
In addition to purchasing power from Cape Wind, the proposed settlement calls for NSTAR to launch a public outreach campaign to educate customers about "the importance of the Commonwealth's climate change goals in terms of furtherance of renewable power procurement, solar power development, energy efficiency program implementation and other policies encompassed within the Green Communities Act of 2008."
When the merger between the two utilities was announced, the Conservation Law Foundation (CLF) intervened during the proceedings. Today, Sue Reid, the Vice President and Director of CLF's Massachusetts' office, had this to say, "The settlement announced today in the NU NStar merger proceeding ensures that this powerful new utility will be in lockstep with Massachusetts’ nation-leading clean energy policies and propel the state forward instead of backwards in implementing them. The terms of the deal will allow the state to finally unleash the potential of Cape Wind, moving the United States ahead in its quest to prioritize clean energy alternatives."