Sweeping offshore wind bill headed toward House

THE LEGISLATURE’S energy committee approved a bill Wednesday evening that would give the state’s Clean Energy Center a major role in the development of the offshore wind industry and tap consumer electricity and natural gas bills to pay for tax credits, grants, and investments to make it happen.

Rep. Jeffrey Roy of Franklin, the House chair of the Telecommunications, Utilities, and Energy Committee, maneuvered the bill through the panel with 10 House members and one Senate member voting in support, one senator voting no, and four senators and one House member reserving their rights. Sen. Bruce Tarr of Gloucester, a Republican, was the lone no vote.

The bill, a high priority of Speaker Ron Mariano and likely to move fast through the House, significantly broadens the role of the state in trying to foster an offshore wind industry and an accompanying workforce in Massachusetts. Where Gov. Charlie Baker proposed using $750 million in federal funds to make one-time investments in clean energy and offshore wind, the House bill counts on kickstarting the effort with more than $100 million in already appropriated money while adding surcharges to consumer utility bills to raise an additional $46 million a year in ongoing revenue.

“There are opportunities to build this fund quickly and it will also have a dedicated revenue stream,” Roy said. “This industry is underway and we need to take an aggressive stance to be a leader. Massachusetts wants this business and the economic development that goes along with it.”

Roy likened the House bill to the life sciences legislation approved by lawmakers in 2008. That bill authorized spending $1 billion over 10 years to promote the life sciences industry and the workforce it needed. Many say the bill helped transform Massachusetts into a world leader in life sciences.

But it’s unclear whether offshore wind and life sciences are the same. Life sciences businesses appear to thrive in clusters (think Kendall Square in Cambridge), but the emerging offshore wind industry is spreading up and down the East Coast for both logistical and political reasons. It’s unclear whether Massachusetts, where the first federally approved utility-scale wind farm is being built, could become the center of the industry.

The bill also would hike the price of electricity at a time when lower prices would be helpful in electrifying more and more of the state’s economy. The state’s plan for reaching its climate goals hinges on greening the electric grid and using that clean power to decarbonize the transportation and heating sectors. Keeping electricity prices low could help in that effort, but Roy’s bill will increase prices by adding surcharges to electric and gas bills.

Electric bills already include a 30-cent monthly charge to promote renewable energy; Roy’s bill would triple that amount to 90 cents a month and funnel the extra 60 cents a month into an offshore wind investment fund. A $1.50 monthly charge would be added to natural gas bills to pump money into the same fund.

The other issue that has been a point of contention is the price cap on offshore wind procurements. The cap requires each successive procurement to come in at a lower price than the previous one. The House bill, as did the governor’s bill, would remove the cap in most instances and give offshore wind developers more flexibility in incorporating economic development into their bids.

Sen. Michael Barrett of Lexington, the Senate chair of the Telecommunications, Utilities, and Energy Committee, has raised concerns about removing the cap at a time when the state is relying more and more on low electricity prices to bolster its climate change efforts. He has done price comparisons showing that Massachusetts procurements for offshore wind are priced well below those of other states where price caps do not exist.

But Roy and Speaker Mariano see the price cap as a barrier to landing more onshore economic development. The other states moving into offshore wind appear to be paying more for the electricity their wind farms generate but getting more in terms of investments in an onshore supply chain for the industry.

Roy’s bill gives the state’s Clean Energy Center a leading role in overseeing the development of the offshore wind industry with a wide variety of tax incentives, loans, grants, and other benefits at its disposal. “You set up shop in our state and create jobs, the tax credits will be available,” Roy said.

With the center adopting a much higher profile, Roy’s bill would broaden the makeup of its oversight board to make it a more independent quasi-authority rather than an arm of the governor’s office. The bill gives the Senate president and House speaker the power to each name an appointee to the board.

The two legislative leaders would also name appointees to a new board set up to select the winners of future offshore wind procurements. Currently, the state’s private utilities handle that task. The governor’s bill would have transferred selection authority to the Department of Energy Resources, but Roy’s bill creates a new, independent committee to handle that task. The committee would consist of two members of the governor’s cabinet, an independent evaluator, and the appointees of the Senate president and House speaker. The appointees could not be lawmakers themselves.

The bill also calls for the creation of a Grid Modernization and Planning Council, major investments in education to build a workforce for the offshore wind industry, significant investments in energy storge, and the exploration of a new approach for delivering electricity from wind farms to the onshore communities that need the power. Wind farm developers currently build their own transmission lines to shore, but the bill calls for exploring whether a centralized transmission line serving multiple wind farms would make more sense.