In 2001, Cape Wind Associates announced bold plans to install giant wind turbines on Horseshoe Shoal in Nantucket Sound. Fourteen years later, this renewable energy project remains stuck on the drawing board. It has not generated a single watt of electricity, but it has kept dozens of lawyers, government regulators, and judges busy in state and federal courts.

Europe boasts scores of offshore wind farms producing thousands of megawatts of clean energy.
The U.S. lags behind, without a single offshore wind farm. Cape Wind hoped to develop the first such project in the U.S., with 130 turbines in federal waters near Cape Cod. The completed project was expected to generate 174 megawatts of electricity on average, enough for 75 percent of Cape and Island homes. However, recent events may doom Cape Wind.

From the outset, Cape Wind faced determined opposition. The late U.S. Sen. Ted Kennedy fretted that wind turbines would interfere with his yachtsmanship. The Wampanoag Indian Tribe claimed the project would disrupt its religious and cultural interests. Local governments and businesses objected. The shrillest opponent has been the nonprofit Alliance to Protect Nantucket Sound. Funded by petroleum and coal magnate William Koch (who owns an estate in nearby Osterville), the Alliance filed multiple lawsuits against the project in state and federal courts. Cape Wind has faced more than 30 court and administrative challenges. Although Cape Wind prevailed in most cases, the litigation has delayed and burdened the project financially.

Despite its detractors, Cape Wind moved forward. The Massachusetts legislature boosted the project in 2008, when it enacted the Green Communities Act requiring electrical utilities to purchase some electricity from renewable energy producers. Cape Wind signed a 33-year lease of the seabed from the federal government and contracted to sell 77.5 percent of its output to National Grid and NSTAR. The project was gaining momentum, but financing difficulties remained. Cape Wind’s plans ran aground this year, when it missed a financing deadline. National Grid and NSTAR terminated their contracts in January, leaving the project without reliable buyers for its electricity. Cape Wind maintains that the utilities have no legal right to terminate the contracts, but there are justifiable doubts that Cape Wind can deliver.

A Rare Victory
Cape Wind suffered another setback in May, when opponents won a rare victory in federal court. Town of Barnstable v. O’Connor seemed like just another annoying “not in my backyard” stall tactic when Cape Wind’s opponents filed the case in U.S. District Court in 2014. The lawsuit targeted events surrounding a merger between NSTAR and Northeast Utilities, a Connecticut utility. In 2010, NSTAR had asked the Massachusetts Department of Public Utilities (DPU) to approve the merger. Cape Wind and the Massachusetts Department of Energy Resources (DOER) intervened. To secure merger approval from DPU, NSTAR agreed to purchase electricity from Cape Wind at above-market rates. The alliance and the town of Barnstable pounced.

The alliance and the town claimed that the quid pro quo among DPU, DOER, Cape Wind and NSTAR violated the Federal Power Act, which places the regulation of interstate wholesale electric energy transmission and rates exclusively under federal control. Cape Wind’s opponents argued that DPU and DOER violated the U.S. Constitution’s commerce clause and supremacy clause when they leveraged NSTAR’s merger application to persuade NSTAR to contract with Cape Wind. The presiding judge showed frustration with the opposition, declaring that “there comes a point at which the right to litigate can become a vexatious abuse of the democratic process.” The judge held that sovereign immunity under the U.S. Constitution’s 11th Amendment barred the federal court from hearing the lawsuit against DPU and DOER, and dismissed the opposition’s suit with prejudice.

The opposition appealed to the U.S. Court of Appeals, arguing that the 11th Amendment does not prevent litigants from suing states in federal court to block future violations of federal law. The Court of Appeals agreed with the opposition’s argument. Last month it vacated the District Court’s dismissal, and ordered the District Court to evaluate the merits of the opposition’s case. The suit against Cape Wind, DPU and DOER will continue.

Regardless of the final outcome of this lawsuit, the wind farm remains in dire straits unless Cape Wind can revive its contracts with the utilities and secure financing. Considering these difficulties, the odds are against Nantucket Sound being the site of America’s first offshore wind farm.