GOV. CHARLIE BAKER and the Legislature on Wednesday rushed through a measure that eliminates the state requirement that the next offshore wind contract come in at a price lower than the last one.
The so-called declining price cap was approved in 2016 because of fears the price of offshore wind power would be high, with electricity ratepayers needing some protection against excessive prices. But the initial contract price with Vineyard Wind was much lower than expected, so low that many are concerned no companies will even bid on the next contract. Bids are due on the next contract August 9.
The Legislature, in its final version of the budget, included language that retained the declining price cap but allowed for adjustments to reflect the diminishing availability of federal tax credits, inflation, incentives, and efforts to support employment and economic development onshore.
Sen. Marc Pacheco of Taunton voted against the conference budget in the Senate because he felt the language was vague and would end up having electricity ratepayers across the state subsidizing onshore development on the South Coast.
Baker cast his opposition more diplomatically, suggesting the Legislature’s language could lead to delays in the upcoming bidding process as wind developers and state regulators wrangle over the provision’s meaning. In an amendment he filed to the Legislature’s budget, Baker said the regulatory process related to defining the terms used in the Legislature’s budget “would most likely result in a termination of the current solicitation and reissuance at an unspecified later date.” That delay, Baker said, would likely prevent would-be bidders from taking advantage of diminishing federal tax credits.
Instead of adding all the caveats, Baker said his “much simpler version” of the legislation would simply do away with the declining price cap entirely for the next offshore wind procurement.
Rep. Patricia Haddad of Somerset, who advocated for the Legislature’s price cap language, said she was happy with the change proposed by Baker. “This is the best outcome,” she said. “Let the market develop.”
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About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
Haddad and much of the South Coast political establishment are worried that the state contracting process for offshore wind in Massachusetts has yielded attractive prices but little in the way of onshore development investments so far. Haddad said she will pursue separate legislation on the development issue.
The fight over offshore wind pricing comes at a tense time for the first offshore wind contract winner, Vineyard Wind. Federal regulators reviewing the project’s environmental impact statement say they need more time to reconcile a number of concerns about the project. Vineyard Wind has said the project may fall apart if the environmental impact statement is not approved by the end of August.
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