At the federal level, Cape Wind originally applied for a permit in 2001 under Section 10 of the Rivers and Harbors Act of 1899 with the US Army Corps of Engineers. The Army Corps eventually presented a draft Environmental Impact Statement (EIS). In a public comment period, many Federal agencies, local governments, and community groups found the draft EIS to have deficiencies. Due to passage of the 2005 Energy Bill, the regulatory authority for off-shore energy projects has been transferred from the Army Corps to the Minerals Management Service (MMS) within the Department of the Interior. Whereas Cape Wind had expected to obtain approval quickly from the Army Corps, this transfer of authority to the MMS delayed the project.
The MMS issued a Draft Environmental Impact Statement (DEIS) in January 2008, and a Final Environmental Impact Report (FEIR) in January 2009.
On January 4, 2010, U.S. Interior Secretary Ken Salazar called a meeting of principal parties to resolve remaining issues after the National Park Service ruled that Nantucket Sound is eligible to be listed on the National Register of Historic Places because of its cultural and spiritual significance to two Native American tribes. “After several years of review, it is now time to move the Cape Wind proposal to a final decision point. That is why I am gathering the principal parties together next week to consider the findings of the Keeper and to discuss how we might find a common-sense agreement on actions that could be taken to minimize and mitigate Cape Wind’s potential impacts on historic and cultural resources. I am hopeful that an agreement among the parties can be reached by March 1. If an agreement among the parties can’t be reached, I will be prepared to take the steps necessary to bring the permit process to conclusion. The public, the parties, and the permit applicants deserve certainty and resolution.”
On March 22, 2010, a hearing was held before the Advisory Council on Historic Preservation. Proponents and opponents of the plan delivered testimony during the hearing. The Council was to deliver their recommendations to Interior Secretary Salazar no later than April 14, 2010.
On April 28, 2010, at a news conference in the Massachusetts Statehouse alongside governor Deval Patrick, a supporter of the project, Secretary Salazar announced "I am approving the Cape Wind project." The Preferred Alternative of Horseshoe Shoal was selected by the Record of Decision.
The Federal Aviation Administration cleared the construction of the wind farm on May 17, 2010 after raising concerns that the windmills could cause interference with radar system at nearby Otis Air Force Base. Cape Wind agreed to fix the base's current system to ensure that it would not be affected by the wind farm. On 28 October 2011, the U.S. Court of Appeals for the District of Columbia rejected the FAA's ruling. The court ordered the 'no hazard' determinations vacated and remanded back to the FAA. On August 15, 2012 Cape Wind received again full approval from the FAA. They determined that the wind farm would cause no danger to aircraft operations. However Cape Wind had begun its planning and building, even without all the federal approval.
The Alliance to Protect Nantucket Sound filed a lawsuit in June 2010, claiming the federal approvals violated the Endangered Species Act, Migratory Bird Treaty Act, and National Environmental Policy Act.
On October 6, 2010, Interior Secretary Salazar announced that a 28-year lease had been signed, which will cost Cape Wind an annual fee of $88,278 before construction, and a 2 to 7 percent variable operating fee during production, based on revenue from selling the energy.
On November 22, 2010, a 15 year Power Purchase Agreement between Cape Wind and the National Grid was signed for 50% of the electricity, at a price of 18.7¢/kWh, adding $1.50 a month to the electricity bill of an average home.
On January 7, 2011, Cape Wind announced that it had received permits from the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency.
On April 19, 2011, the Associated Press announced that the Bureau of Ocean Energy Management, Regulation and Enforcement granted its necessary approval for the project.
In Summer 2011, the Wampanoag Tribe of Gay Head (Aquinnah) filed a lawsuit against the federal government for allowing Cape Wind to move forward. Contradicting the Aquinnahs, the Pocasset Wampanoag Tribe had previously expressed support for the project.
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