Governors, including Healey, raise concerns about offshore wind pricing
Call on Biden to take steps to help states reach goals
SIX GOVERNORS, including Maura Healey of Massachusetts, are raising concerns about an expected rise in the cost of electricity from offshore wind procurements and asking the federal government to step in and help out.
In a letter to President Biden, the governors of Massachusetts, Connecticut, Rhode Island, New Jersey, New York, and Maryland said offshore wind is facing cost increases that threaten new and previous procurements.
“Absent intervention, these near-term projects are increasingly at risk of failing,” the governors said. “Without federal action, offshore wind deployment in the US is at serious risk of stalling because states’ ratepayers may be unable to absorb these significant new costs alone.”
The governors are asking Biden to speed up the permitting of new wind farms to bring them to market faster, to share revenues gained from federal offshore wind lease sales with the states, and to clarify that recently approved tax credits fully apply to wind farm construction.
The tone of the letter is very different from what Healey has been saying in public. In public, she has been talking up the state’s fourth offshore wind procurement as the largest in state history without mentioning that it’s so large because the state’s second and third procurements were wiped out by rising interest rates, inflation, supply chain disruptions, and the war in Ukraine.
Attorney General Andrea Campbell urged the administration to go smaller with the state’s next procurement, warning that it would be unwise to lock utility ratepayers into long-term expensive contracts for so much power. Campbell urged the Healey administration to go smaller with the next procurement and wait out the recent spike in prices.
Rep. Jeffrey Roy of Franklin, the House chair of the Legislature’s Telecommunications, Utilities, and Energy Committee, disagrees with Campbell and sides with Healey, with one caveat. He said he supports procuring a large amount of wind power with the next procurement because the state needs the clean power to meet its climate change targets.
“You can always say no,” he said, suggesting that the Healey administration could just reject bids it considers too high.
That’s what Rhode Island’s biggest utility did in July, when it pulled the plug on a recent offshore wind procurement. “Those costs were ultimately deemed too expensive for customers to bear and did not align with existing offshore wind power purchase agreements,” the utility said at the time.In Massachusetts, the offshore wind developers selected for the state’s second and third procurements are terminating those contracts because of the changing market. Both are expected to bid in the procurement next year; cost pressures have not lessened and a price cap that was in place for previous procurements is gone.
“This is an odd situation where everyone has permission to go high,” said Sen. Michael Barrett of Lexington, the Senate chair of the Telecommunications, Utilities, and Energy Committee. Like Roy, Barrett said Massachusetts should do what Rhode Island did if the bids come in too high.