Federal Appeals Court Issues Cape Wind New Blow

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By Ari Natter

July 5 — A federal appeals court July 5 found the Interior Department violated federal law in conducting its environmental review for the Cape Wind project off Massachusetts ( Pub. Emps. for Envtl. Responsibility v. Hopper, 2016 BL 214610, D.C. Cir., No. 14-5301, 7/5/2016 ).

The U.S. Court of Appeals for the District of Columbia Circuit ruled the Bureau of Ocean Energy Management must redo an environmental impact after the original study was done in violation of the National Environmental Policy Act.

The court also found the U.S. Fish and Wildlife Service violated the Endangered Species Act in issuing its incidental take statement for the $2.6 billion project, which has been under development for the past 14 years.

Although the ruling was another blow for the project, the court said it would not vacate Cape Wind's lease or other regulatory approvals. The company behind the project said it remained optimistic.

The decision reversed a U.S. District Court for the District of Columbia decision made in 2014 and represented a victory for opponents of the 130-turbine project proposed for Nantucket Sound, such as Public Employees for Environmental Responsibility, which filed an extensive list of legal challenges in 2010 ( Pub. Emps. for Envtl. Responsbility v. Beaudreu, 25 F. Supp. 3d 67, 2014 BL 72404 (D.D.C. 2014)).

Geological Surveys Required

In its decision, the appeals court said the Bureau of Ocean Energy Management had not “fulfilled its duty to take a ‘hard look’ at the geological and geophysical environment” as required by the National Environmental Policy Act. The court required the agency to supplement the environmental impact statement with “adequate geological surveys” before allowing construction to begin.

“The Bureau therefore violated NEPA, but that does not necessarily mean that the project must be halted or that Cape Wind must redo the regulatory approval process,” the court said.

The decision comes as the 468-megawatt project stalled after utilities National Grid Plc and Northeast Utilities’ NSTAR unit filed to cancel power-purchase agreements in January 2015 after the Cape Wind project failed to complete financing by the end of 2014.

In an interview, Dennis J. Duffy, Cape Wind's vice president of regulatory affairs, told Bloomberg BNA he was pleased with the court's decision because it narrows down the remaining legal challenges.

Company Still Optimistic

“Of all the issues that are on the table there is not much left,” Duffy said, adding the company previously completed the geological surveys called for by the court.

Duffy added he was optimistic the project could receive financing if energy legislation (S. 2372) passed by the state's Senate that includes language requiring utilities to purchase offshore wind becomes law.

“If this bill passes…we’re confident we would do very well,” Duffy said.

To contact the reporter on this story: Ari Natter in Washington at anatter@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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