Cape Wind’s developer said he is down to a “short list’’ of companies that could build the controversial wind farm off of Nantucket Sound, but choosing one will take several more months.
If the project gets the necessary financing, the nation’s first offshore wind farm could be up and running in 2 1/2 years. Picking a bid will determine Cape Wind’s construction cost, which was previously estimated at $1 billion or more. Saying that negotiations were ongoing, Jim Gordon, president of Cape Wind, declined to name the firms he is considering.
"Every marine contractor is bidding to be either a primary or a sub,’’ Gordon said yesterday during an interview at the Globe.
Gerard Dhooge, president of the Boston and New England Maritime Trades Council, AFL-CIO, said several large local and international construction firms have expressed interest in building Cape Wind, but he declined to name any. Yesterday, Gordon said he estimated that Cape Wind construction would result in 1,000 jobs.
A contractor needs to be chosen quickly for Cape Wind to take advantage of federal tax credits. Without those incentives, the proposed price of electricity from the project will rise.
The utility National Grid recently agreed to pay $3 billion for half the power produced by Cape Wind in its first 15 years.
The Massachusetts Department of Public Utilities, which must approve the deal, held its second public hearing on the matter last night in Nantucket.
Audra Parker, president of the Alliance to Protect Nantucket Sound, which opposes Cape Wind, questioned the deal at yesterday’s hearing.
"Our group supports renewable energy, but this project is so much more expensive than the renewable power sources that are already out there,’’ Parker said.
Under the proposed contract, National Grid would pay a starting price of 20.7 cents a kilowatt hour for electricity from Cape Wind in 2013, when it is expected to begin operating. That price, which includes a state-mandated premium for clean power, is more than double what National Grid currently charges residential customers for basic service, and would increase by 3.5 percent annually over the life of the deal.
But because only a small portion of the electricity National Grid sells will come from Cape Wind, it will not double customer bills.
And Cape Wind and state officials believe that over the long term, the project will save consumers money if fossil fuel prices rise.
The question is whether Cape Wind will qualify for the federal investment tax credit it needs to ensure that National Grid’s starting price stays at 20.7 cents per kilowatt hour. For that, Cape Wind would need to begin construction by the end of the year and be in service by 2013, as planned.
If the project misses those deadlines, it may apply for a federal production tax credit that expires at the end of 2012, though the starting price National Grid would pay for Cape Wind electricity would then rise to 22.8 cents per kilowatt hour. Without either tax credit, National Grid would pay Cape Wind 23.5 cents per kilowatt hour.
"National Grid negotiated a very hard bargain with us,’’ Gordon said. “All the risks we’re taking, we have to be within the cost of that price.’’
Gordon said the company would try close its financing by the end of the year.
The deal with National Grid was considered an essential step toward getting that funding, because it shows potential investors that Cape Wind has a market for its electricity.
If approved, the contract will also help National Grid meet state quotas for providing clean energy to customers.
Utility companies in Massachusetts are required to get a portion of their electricity from renewable energy sources like solar power installations or wind farms, with at least 15 percent of their power coming from clean energy sources by 2020.
Robert Rio, senior vice president at the trade group Associated Industries of Massachusetts Inc., long has had concerns about what Cape Wind will cost consumers — especially if there are lower-priced alternatives for clean energy.
He also said he thinks officials of Cape Wind and National Grid could be more forthcoming on what happens if the federal tax credits deadlines aren’t met.
"The ratepayer is on the hook for all of this,’’ Rio said.
At last night’s hearing, some expressed support for Cape Wind for the jobs it will create. Others also cited disasters like the recent oil spill in the Gulf of Mexico.
"I would be happy to pay a dollar or two more per month. I’m sick of what’s going on in the Gulf,’’ said Nantucket resident Laura Wasserman. “I hope to receive as much of my electricity as possible from renewable sources and wind.’’
