Offshore wind firms eye New Bedford

May rent state marine terminal for $5.7m a year

STATE OFFICIALS ON TUESDAY signed a non-binding letter of intent with three companies who all agreed to use the New Bedford Marine Commerce Terminal as a staging area if they succeed in building wind farms 14 miles off the coast of Martha’s Vineyard.

DONG Energy, Deepwater Wind, and OffshoreMW, the three offshore wind developers that hold leases in federal waters, agreed to work toward an agreement with the state by Dec. 1, 2016,  that would commit them to rent at some point in the future the 26-acre terminal individually or as a group at an initial rent of $5 per square foot, or nearly $5.7 million a year.

A rental agreement would be a lifesaver for the money-losing terminal, which was built under the administration of former governor Deval Patrick at a cost of $113 million and been underutilized ever since, largely because the Cape Wind project in Nantucket Sound failed to obtain financing and never got off the ground. Several firms have rented part of the marine terminal’s space, but the lease payments have never been enough to offset the state’s costs.

Stephen Pike, the interim chief executive officer of the Massachusetts Clean Energy Center, which owns the terminal, said total rental income during the last fiscal year was $250,000, about half the cost of maintaining the facility.

Matthew Beaton, the secretary of energy and environmental affairs, said last year that he probably wouldn’t have built the marine commerce terminal, but now the Baker administration is following the same basic playbook on offshore wind as the Patrick administration. The goal is to help develop an offshore wind industry that would be based out of New Bedford.

Under the energy legislation recently signed into law by Gov. Charlie Baker, the state’s utilities are directed to negotiate long-term contracts for 1,600 megawatts of offshore wind power. The contracts are expected to be handed out in smaller increments over a period of many years. The hope is that competition between the three companies will over time yield competitive prices for electricity, but prices initially are expected to be higher than existing market rates. The state’s long-term play is for the production of clean energy from an industry with prospects for long-term growth in a part of the state hungry for jobs.

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Bruce Mohl

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.

“With this agreement, Massachusetts stands to recognize jobs and economic benefits from this emerging sector within the clean energy industry,” Baker said in a statement.

Baker was a sharp critic of the Patrick administration’s embrace of Cape Wind when he ran unsuccessfully for office in 2010. More recently, he sided with House officials who opted to exclude Cape Wind from competing for the power contracts envisioned in the recently passed energy legislation.