A clarification has been added to this story.
SOUTHCOAST WIND said on Monday that it is moving to terminate its existing offshore wind contracts with Massachusetts and hoping to rebid them at higher prices in the state’s next procurement.
The announcement ended months of vacillation by SouthCoast. The company, a joint venture of Shell New Energies and Ocean Winds North America, had repeatedly said the power purchase agreements it signed last year with Massachusetts utilities had been overtaken by inflation, rising interest rates, supply chain problems, and the war in Ukraine. Yet SouthCoast refused to concede that the contracts needed to be scrapped.
Sen. Michael Rodrigues of Westport, who had urged the Healey administration to not award future power purchase agreements to any company that reneged on an earlier deal, said SouthCoast had told him it intended to honor its contract.
In a bizarre twist, SouthCoast finally revealed it was moving to terminate the contracts in a filing with Rhode Island – not Massachusetts — regulators. The Rhode Island filing came just days before regulators there were scheduled to take up a transmission proposal from SouthCoast that would have connected the wind farm to Massachusetts via a transmission line running across part of Rhode Island.
The SouthCoast announcement means the second and third Massachusetts offshore wind procurements are a bust, with 2,400 megawatts of wind power scrapped. SouthCoast accounted for 1,200 megawatts and Commonwealth Wind for another 1,200 megawatts. Commonwealth, a wind farm proposed by Avangrid, early on said the contract it signed last year failed to provide enough money to finance the project.
Both companies are now trying to negotiate a way out of the contracts with the three Massachusetts utilities. They both plan to rebid the projects, perhaps with some additional capacity, in the state’s next procurement.
Maria Hardiman, a spokeswoman for the Executive Office of Environmental Affairs, encouraged a quick resolution of the dispute. “We encourage all parties to find clarity on the next steps before the fourth offshore wind solicitation becomes active,” she said in a statement.
Francis Slingsby, in a press release issued by SouthCoast, said the company has accepted that it will have to pay a financial penalty for terminating its earlier contracts. It is also likely to suffer some sort of bidding penalty in the next procurement. [CLARIFICATION: An earlier version of this story said Slingsby expected a bidding penalty in the next procurement. He did not say that, but the draft RFP suggests that will be the case.]
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Editor, CommonWealth
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.
But Slingsby, like Commonwealth Wind earlier, said the project remains an important part of the Massachusetts energy future. “We expect to have our federal permit in hand at the end of this year. In addition, our project will help meet state, regional and national climate goals, which at present are in jeopardy of falling short of target,” Slingsby said. “We are grateful to the Healey/Driscoll Administration for creating room for a rebid in the newly released draft RFP and look forward to being a valuable contributor to Massachusetts’s, Rhode Island’s, and all New England’s clean energy industry for decades to come.”
The only wind farm project currently moving forward in Massachusetts is the 800-megawatt Vineyardn Wind, which is expected to start producing some power by the end of this year.
