Cape Wind Finalizes Deal with Lead Bank
Cape Wind moved another step closer to building the offshore wind farm Tuesday as it finalized a deal with the Bank of Tokyo-Mitsubishi UFJ.
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The Bank of Tokyo-Mitsubishi will act as Coordinating Lead Arranger for Cape Wind and will provide a significant amount of debt capital toward financing the project, according to a press release.
Securing financing is a step Cape Wind officials have been waiting for.
“Obtaining financing is one of the last steps to complete before proceeding with the construction of the project. Together with BTMU, we are engaging a group of experienced financial institutions as our core banking group and look forward to completing the financing of America’s first offshore wind farm,” said Cape Wind President Jim Gordon said in a statement.
Cape Wind expects to finalize financing and begin construction by the end of the year.
Bill Carson
2:00 pm on Wednesday, March 20, 2013
Electric bills will triple. Under the current Massachusetts Grid operators rules, the traditional power companies gas, coal, oil have to bid on power the day before they get paid; for example, 6 cents per kilowatt hour.
Under the current rules, the commercial wind turbine companies automatically get paid the day they produce the power for example, 18 cents per kWh because they can only produce power when the wind blows. The Grid operator has to take the renewable energy wind product first that day.
The traditional power company is glad to stand down when the commercial wind turbine company is producing power.
What the public needs to understand is that in Massachusetts, when the commercial wind company is getting paid the 18 cents, the traditional company that bid the previous day stands down and gets paid anyway.
Thus the cost to Massachusetts electric rate payers is the 18 cents plus the 6 cents the traditional company bid the previous day. The cost per kilowatt hour could cost up to four times normal bid costs.
Massachusetts needs to review the electric bid process and how it affects residential and business customers. Massachusetts is one of the few states to use the current formula.