APNewsBreak: Mass. co says no deal with Cape WindBy JAY LINDSAY , Associated Press
Mar. 11, 2013 4:59 PM ET
MIDDLEBOROUGH, Mass. (AP) — The president of a Massachusetts company once touted as a supplier of steel foundations for Cape Wind's offshore turbines said his company's deal with the project is dead, while questioning Cape Wind's commitment to developing U.S. offshore wind in a letter to federal officials.
Carl Horstmann of Mass Tank wrote the U.S. Department of Energy in January as the agency considers a loan guarantee for the $2.6 billion Cape Wind project, which aims to be the nation's first offshore wind farm.
Mass Tank had planned to add up to 300 manufacturing jobs at a newly-built Quincy factory after the Cape Wind deal, which the company believed would spur additional, industry-related work.
Horstmann said in an interview Friday at this Middleborough company that he feels his company was "used" to win public support for the controversial project he was once confident would boost local jobs.
"I can only conclude that I was wrong, and question whether Cape Wind's commitment to Mass Tank and the local manufacturing jobs was ever made in good faith," he wrote in his letter to the Department of Energy.
Cape Wind spokesman Mark Rodgers said Monday that Mass Tank just didn't have the experience or resources for the job.
Although the two companies have been linked in recent press reports, Rodgers said Cape Wind hasn't publicly referred to Mass Tank since early 2011, "at the earliest indication that they might not be able to deliver on their plans."
Cape Wind, which plans 130 turbines in Nantucket Sound, is strongly backed by state officials and the Obama administration. It aims to begin producing electricity by 2015. The project is still facing several lawsuits and opponents who argue the wind farm will ruin the pristine sound and that its power is too costly.
Since it was proposed in 2001, Cape Wind has pushed its regional economic benefits. On Monday, Rodgers said Cape Wind has already spent tens of millions locally by hiring specialists, including scientists and engineers. Cape Wind estimates it will employ 600 to 1,000 people during construction and create 50 permanent jobs.
In October 2010, Cape Wind wrote a letter of intent to contract with Mass Tank to provide the massive steel pipes that support the turbine platforms. Horstmann said Mass Tank then met several requirements set by Cape Wind, including adding needed expertise by partnering with EEW Group, a German steel pipe fabricator experienced in offshore wind development. But they never received a preliminary contract.
"At the end of the day, we never really got the chance to fail," said Mass Tank chief operating officer Randy Kupferberg.
Horstmann wrote in his DOE letter that Cape Wind's decision to spurn Mass Tank calls into question its commitment to developing the domestic industry, as its parts will be imported.
He said he's coming forward now because Cape Wind should be accountable to taxpayers who may subsidize the project and ratepayers who will pay a premium for its power.
"Mass Tank ... has been in a lot of different stories as participating (in Cape Wind) or bringing on jobs, and it's not the truth," he said.
But in letter to Horstmann last May, provided by Cape Wind, Cape Wind president Jim Gordon told Mass Tank it had no clear role in the project since it had not maintained the required partnership with EEW. Mass Tank disputes this, saying EEW assured the company it would partner with it, if Gordon was committed to involving a local manufacturer.
Cape Wind is currently negotiating with EEW to provide the foundations, but no deal is done, said Timothy Mack, who works in offshore wind business development for EEW.
He said once Gordon rejected its proposal with Mass Tank as too expensive in mid-2011, EEW realized it would have to bear far more costs than it was willing to take on.
Mack also said there Mass Tank never presented a realistic proposal on financing their end of the partnership. Mass Tank countered that it never got a chance.
But Mack said the partnership just wasn't going to work.
"We looked at the factory in a serious manner, and at the end of the day, it was not financially viable," Mack said.