TPA Joins Coalition Opposing Government Loans for Cape Wind

Over the course of the nearly last twenty years, an effort to build a wind farm on Horseshoe Shoal in Nantucket Sound (off the coast of Cape Cod) has been the subject of great fear for residents worried about the environmental impact of the project.  Now, taxpayer advocates are concerned that the project would amount to money spent on yet another failed alternative energy project following in the footsteps of other “green duds” like Solyndra. Despite these legitimate concerns, and previous denials by the Department of Energy (DOE), several groups are pressing DOE to guarantee a loan so that statutory deadlines can be met before the impact of the project can be thoroughly considered. The project is economically outdated and will not only cost taxpayers close to $3 billion dollars but end up producing electricity which will be 2 to 3 times the price of that produced by conventional means. Last week, in an effort led by Frontiers of Freedom, TPA joined a collation urging members in the House and Senate on the Energy & Commerce Committees to recommend that DOE once again deny Cape Wind’s backers’ request for a guaranteed loan.

Read the full letter below:

August 12, 2013

The Honorable Fred Upton, Chairman, Committee on Energy and Commerce
United States House of Representatives, 
Washington D.C. 20515

The Honorable Henry Waxman, Ranking Member, Committee on Energy and Commerce
United States House of Representatives
Washington, D.C. 20515

Dear Chairman Upton and Rep. Waxman:

The decade-long effort to construct a wind turbine farm on Horseshoe Shoals in Nantucket Sound off Cape Cod known as Cape Wind should be examined by Congress.

Despite numerous economic and environmental concerns, Cape Wind’s backers are trying to rush a request for a loan guarantee through the United States Department of Energy in order to meet statutory deadlines before the impact of the project can be thoroughly considered.

Cape Wind no longer makes economic sense. The 130 turbine wind farm is projected to cost $2.6 billion. That works out to approximately $20 million per turbine to generate energy for just 25 years. Furthermore, at .23 cents per kilowatt hour, the electricity produced will be 2 to 3 times the price of that produced by conventional means.

In a further blow to the economic competitiveness of Massachusetts, NStar and Northeast utilities have been forced to purchase power from Cape Wind at high rates, which will drive up energy prices for businesses in the state and further hamper prospects for economic growth.

These turbines will be one of the most expensive means of power generation to construct and will produce energy at a premium price. Investors have taken note of this and refused to back the project in the private financial markets. Cape Wind has had to go overseas to the Bank of Tokyo to find support for the financing, but only if the Department of Energy will guarantee the loan.

The 600-1000 U.S. jobs promised as part the project have disappeared. The turbines will be manufactured in Germany while Mass Tank, the U.S. firm that would have laid the monopole foundations, has lost the contract.

From top to bottom, Cape Wind is another Solyndra in the making. History has shown government backed loans, green jobs that never materialize, and mandated purchase of output do not alone make speculative projects economically viable.

The interests of the U.S. taxpayers must be protected. The plug should be pulled now, at least as far as any further federal involvement in Cape Wind’s financing is concerned. For the above reasons, we respectfully request you look into the Cape Wind project and ask the Department of Energy to again deny its backers’ request for a federal loan guarantee.

Sincerely,

George Landrith, Frontiers of Freedom

Phil Kerpen, American Commitment

Iain Murray, Competitive Enterprise Institute

Heather Higgins, Independent Women’s Voice

Terry Scanlon, Capital Research

Marita Noon, Heartland Institute

Lew Uhler, National Tax Limitation Committee

Peter J. Thomas, The Conservative Caucus, Inc.

Grover Norquist, Americans for Tax Reform

Larry Hart, American Conservative Union

Tom Schatz, Citizens Against Government Waste

David Williams, Taxpayers Protection Alliance

Jim Martin, 60 Plus

Sabrina Schaeffer, Independent Women’s Forum

Tommy Sears, Capital Enterprise Associates, LLC

cc:

Rep. Doc Hastings and Rep. Peter DeFazio,
House Committee on Natural Resources

Sen. Ron Wyden and Sen. Lisa Murkowski, 
Senate Committee on Energy and Natural Resources