01:00 AM EDT on Thursday, September 15, 2005

OSTERVILLE

BILL KOCH, the billionaire businessman, was asked to expound on his well-known opposition to the wind farm proposed by Cape Wind for Nantucket Sound. Here is what he said, just before taking off with his all-woman world-class crew on a practice sail around Newport:

"I don't know if you know it, but I was in the alternative-energy business for 20 years, and we looked very carefully at wind farms. We looked long and hard at windmills, and finally concluded that they are not a good form of power -- for a lot of reasons, but primarily because the capital costs are too high. The only way to make them work is with significant tax breaks or government subsidies of some sort, which is why the Nantucket Sound project in particular is just a boondoggle."

He continued: "It's going to be intensely capital-expensive, especially with the initial costs of sinking the towers into the seabed and the costs associated with maintaining them. The ocean is a very hostile, corrosive environment for these things, and that's the conclusion they're coming to even in Europe, where offshore windmills have been very popular. More and more Europeans have begun to see them as a pain in the neck.

"Number two, you get power only when the wind blows, and most people, most customers, want a consistent, reliable source of power. Wind is not a consistent, reliable source of power, and by introducing it into the power grid, you have to adapt to the fluctuations in the quantity going in.

"Thirdly," said Koch, "because of tax breaks and the 'green' requirements now involved with energy contracts, if a Massachusetts energy wholesaler wants to sell electricity, he has to buy a certain percentage of alternative energy. This means the developer would expect an above-average price for his utility, because the wholesaler would have to buy it, and that would add as much as three or four cents [per kilowatt hour] to the cost -- which would raise the rates for everybody in Massachusetts, including Cape Cod.

"The fourth issue -- and this is somewhat offensive to most people -- is that [James Gordon, Cape Wind's chief executive] is being given the rights to put the wind farm there free of charge. In essence, a public property is being transferred to him for no return benefit to the public -- which is contrary to everything the Department of the Interior has been about in terms of the acquisition of mining and development rights in this country. He isn't even being asked for a performance bond, so he'd be under no obligation to remove these things once they became obsolete. As a developer, he's an extremely competent guy, and he's managed to get all that waived.

"There's also the visual pollution, which only adds to the extremely high cost of this project, with virtually no public benefit.

"The argument that this wind farm would reduce our dependence on imported oil is pure sophistry. It would have no effect on imported oil. As a country, only 3 percent of our electricity comes from burning imported oil.

"The other thing that's wrong with this is that someone would have to build a peaking plant to even out the supply -- a plant that was operated by something other than wind, and that would have additional pollution associated with it, on top of being very expensive to build. So the whole argument that it would reduce pollution is just wrong. It's all baloney."

At this point, I asked Koch to elaborate on his personal view of the Cape Wind project -- not as a global developer, but as a man who'd made a fortune in power and whose Cape Cod estate overlooks the battleground in question. His response:

"I had several geothermal power plants, one in Nevada, one in Costa Rica, and another in the Philippines. I had gas-fired plants, wood-powered plants, and an interest in a hydro-powered plant. And, to be quite blunt about it, I made a fortune off them. They made sense because of the law that required power companies to take delivery of my alternative energies at ever-increasing prices. I was selling mine at 12 cents when the market was 5 cents -- which was essentially a government subsidy, and something I was very happy, very proud, to take advantage of. I didn't make the rules; I just took advantage of them. When they got rid of the law, my price went to 3 cents, and I sold and got out, and then invested in oil and gas -- which was also good business."

Listening to Koch talk, of both his own career and his admiration for Jim Gordon as a developer, I thought I heard a trace of jealousy. Did I? Koch's tone turned breezier:

"I was telling one of my guys when this [wind farm] first came up, 'I wish I'd thought of this!' But as a businessman, I said I wouldn't have put it in my backyard -- I would have put it in someone else's backyard!"

He chuckled and said, "If Gordon could get someone else to put up the capital and then get out of it with a free interest in the project, then the economic incentive would be different. But I still wouldn't advise him to do it. I sure wouldn't do it."

"It's his money," I said. "You can't really care about that."

"Well, that's right, but I've known Jim Gordon for years, not well, but I know him, and I like him. . . . He was developing power plants when I was in the 1980s, and he did a magnificent job. He started from scratch and did very well for himself, and I have a lot of respect and admiration for him. But I liken my relationship with him to the one I have with [America's Cup yachtsman] Dennis Conner, which is that we're on the other side of the coin from each other. But I have a lot of respect for them and I like them very much. . . . One thing about Jim Gordon: He's very good at lobbying, and he's very good at public relations."

Asked whether Koch even has a publicist on his staff, he laughed and said, "I pay someone to keep my name out of the papers."

"They aren't doing their job very well today," I said.

"I hope I'm not being too controversial!" He laughed.

I asked Koch whether he saw any merit to the suggestion of another news maker -- Robert F. Kennedy Jr. -- that a better place for the wind farm would be the other side of Nantucket, the ocean side. Said Koch:

"I think where they ought to put it is Otis Air National Guard Base. It'd be half, maybe a tenth, the cost to build, and it would be good public relations in terms of what to do with the base.

"The reality is, this country ain't gonna go to windmills any time soon. Wind isn't going to replace coal, gas and hydro. Mother Nature won't let you. But if people want to have windmills for some feel-good reason, fine -- put it on land. The base is perfect for that."

So Bill Koch doesn't want the wind farm in Nantucket Sound for a whole bunch of reasons -- only one of which has to do with the view from his backyard.

Jeff Blanchard, a Cape Cod writer, is an occasional contributor.