SouthCoast Wind agrees to pay $60m to terminate power purchase agreements
Comes on the heels of $48m deal negotiated by Commonwealth Wind
THE DEVELOPER of SouthCoast Wind on Tuesday agreed to pay more than $60 million to the state’s three leading utilities to terminate power purchase agreements the company negotiated last year to build its wind farm south of Martha’s Vineyard.
The SouthCoast proposal, if it is approved by the Department of Public Utilities, would be the second wind farm to terminate its contract with the utilities. Avangrid, the developer of Commonwealth Wind, successfully terminated its contract earlier this month by pledging a $48 million termination payment.
Both offshore wind farm developers say the original terms of the contracts are no longer viable because of inflation, rising interest rates, supply chain disruptions, and the war in Ukraine.
‘Seller has requested that the agreement and the voluntary commitment agreement be terminated because the facility is no longer economically financeable,” the SouthCoast Wind termination proposal states.
Both Commonwealth Wind and SouthCoast Wind are hoping to rebid their projects in a Massachusetts offshore wind procurement scheduled for next year. The arrangement has stirred some controversy about whether it is fair for a project far along in the approval process to be allowed to terminate its project and then bid against companies that are just launching their initiatives.