Baker open to Commonwealth Wind negotiations
But he says restarting the bid process is not an option
GOV. CHARLIE BAKER indicated on Wednesday that he doesn’t want a high-stakes procurement process for offshore wind to collapse because of a dispute over the terms of the power purchase contract.
Commonwealth Wind, a 1,200 megawatt project being developed by Avangrid, says the contract it agreed to in May is no longer sufficient to attract financing for the project because of rapid changes in the economy brought about by the war in Ukraine, supply chain issues, inflation, and rising interest rates.
Avangrid has asked the Department of Public Utilities to put off any decision on the contract for at least 30 days to give the company and the utilities that negotiated the original deal time to explore changes that would make the wind farm viable.
But the utilities – Eversource, National Grid, and Unitil – told the DPU on Tuesday that a 30-day delay was unnecessary because they had no intention of renegotiating the contracts and they should be approved as drafted.
Baker, speaking to reporters after a hearing of the Health Policy Commission, said he wouldn’t mind if the utilities and Commonwealth Wind opened negotiations but he said he did not want to see the the procurement process restarted.
“They [Avangrid] can negotiate with the utilities but in terms of reopening the bid, no,” he said.
Baker also suggested the wind farm developer may see profits on the deal improve over time due to technology improvements. “Let’s remember, these are long-term contracts, like really long-term contracts. While there may be some choppy water at the moment with respect to interest rates, supply chains, and all the rest, we’re talking about a deal that basically lasts for 15 years,” he said. “I think it’s premature for people to think that where we sit now is necessarily representative of where things are going to be over time.”
Two other leading offshore wind advocates urged the utilities to at least listen to what Avangrid has to say.
“I don’t think it’s responsible to refuse to talk,” said Ann Berwick, a former chair of the Department of Public Utilities, who said offshore wind is indispensable to the state’s efforts to reach its emission reduction targets.
Bradley Campbell, president of the Conservation Law Foundation, also said the utilities should hear Avangrid out because of offshore wind’s importance to the state’s energy future.
“This is an opportunity for Governor Baker, who has outsized influence with the utilities, to bring them to the table and broker a solution that keeps New England on track to reap the climate and economic benefits of offshore wind,” he said.
William Hinkle, a spokesman for Eversource, indicated the company’s position has not shifted.
“We are committed to procuring the energy supply needed to provide our customers with the safe, reliable service they need while meeting the Commonwealth’s clean energy goals,” he said. “The contract is filed for approval at the Massachusetts Department of Public Utilities. We are prepared to move forward once all necessary approvals are received, and yesterday’s filing was a step in that effort.