For Immediate Release - December 02, 2009

GOVERNOR PATRICK ANNOUNCES THAT UTILITY WILL NEGOTIATE TO BUY ELECTRICITY GENERATED BY CAPE WIND

Long-term contract will move nation's first offshore wind farm closer to reality

BOSTON - Wednesday, December 2, 2009 - Governor Deval Patrick today announced that National Grid and Cape Wind have agreed to enter into negotiations for a long-term contract under which the utility would purchase the electricity generated by Cape Wind. Such a Power Purchase Agreement will be a critical requirement for financing the proposed wind farm in Nantucket Sound, and getting it into construction and operation in time to qualify for federal incentives under the American Recovery and Reinvestment Act that would reduce the cost of the project by 30 percent.

"For both reducing greenhouse gas emissions and launching the offshore wind industry that will achieve those reductions, it is essential for Cape Wind, like offshore wind in general, to move from wishful thinking to reality," said Governor Patrick. "A contract with an electric distribution utility like National Grid will move Cape Wind one step closer to reality."

Governor Patrick noted that this is a major milestone for what is expected to be the first offshore wind project in the United States. The power purchase arrangement still has to go through state regulatory review.

National Grid is expected to file shortly with the state Department of Public Utilities a Memorandum of Understanding with Cape Wind laying out the rationale for such a contract, as well as the methods and timelines by which the parties will pursue an agreement. If DPU gives approval to the process, National Grid and Cape Wind will engage in negotiations to enter into a mutually agreeable long-term contract and submit any final pact to DPU for review and approval. The state Department of Energy Resources is also a signatory to the MOU, providing a consultative role required by the Green Communities Act of 2008.

"The Green Communities Act called for long-term contracts to help renewable energy developers get their projects financed," said Energy and Environmental Affairs Secretary Ian Bowles. "While these contracts can be arrived at in a variety of ways, a smart, well-structured agreement to purchase the power generated by the nation's first offshore wind farm, located just miles off the Massachusetts shore, will promote renewable energy and replace fossil-fuel power plants with emissions-free power."

"National Grid supports the Commonwealth's goal to expand renewable generation in Massachusetts, including offshore wind," said National Grid President Tom King. "We are optimistic that we will successfully negotiate a long-term power contract with Cape Wind that will achieve the renewable targets established by the Green Communities Act. National Grid recognizes that as a public utility, we need to facilitate these important renewable projects while maintaining a focus on minimizing the cost to our customers. We are proud to be involved in this effort and applaud Governor Patrick for his leadership on this issue."

"Today's announcement is a demonstration of how the Patrick Administration's vision and desire for a cleaner, more secure energy future will put Massachusetts at the forefront of the emerging offshore wind industry," said Jim Gordon, president of Cape Wind. "We look forward to working with National Grid to deliver Cape Wind's energy, economic and environmental benefits to the region."

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