A major policy debate is taking shape on Beacon Hill between those who see offshore wind as the key to meeting the state’s climate change goals, and those who see the industry as needing to do more than that – specifically, spurring significant economic development in the state.
The debate centers around the price of electricity. Other states have accepted higher prices for electricity in return for pledges from offshore wind developers to build some of their supply chain inside the state. New York and New Jersey, for example, have secured pledges for manufacturing operations inside their states.
Massachusetts, by contrast, put a price cap in place with its first-in-the-nation offshore wind deal, which requires each successive procurement to come in at a lower price than the previous one.
The price cap is now a key part of the debate about how offshore wind developers should be treated in Massachusetts. House leaders say they want the state to make a major investment in the industry and do away with the price cap. They also said they wanted a greater emphasis on economic development in the procurement process, which would give offshore wind developers more flexibility to propose onshore investments.
Gov. Charlie Baker flipped his keep-the-prices-low script and sided with the House last week, filing legislation calling for elimination of the price cap and using $750 million of the state’s billions in American Rescue Plan Act funds to support the industry.
Sen. Michael Barrett of Lexington, the Senate chair of the Telecommunications, Utilities, and Energy Committee, remains skeptical. He says the state already has some of the highest electricity prices in the country, so it shouldn’t accede to higher prices on 20-year power supply contracts with offshore wind developers to lure a manufacturing facility to the state. Higher electricity prices, he says, might hinder attainment of the real prize – decarbonizing the state’s economy by convincing consumers to shift to carbon-free electricity to power their cars, buildings, and everything else.
Rep. Jeffrey Roy of Franklin, Barrett’s counterpart in the House, said on The Codcast that he thinks the state can use offshore wind both to address climate change and spur economic development. The key, he said, is giving offshore wind developers more flexibility on the pricing of their electricity so they can afford to make more onshore investments.
“Certainly the end goal is fighting climate change and getting clean energy. We need to be by 2050 at net zero and that’s going to take a lot of energy,” said Roy. “For a little bit of a price increase, if we can get some economic development at the same time we’re saving the planet, that’s a win-win for everybody.”
Roy called slightly higher prices for electricity in return for economic development a “fair tradeoff.” He said New York and New Jersey have done that, and so should Massachusetts.
“Think of what a manufacturing facility could do to a community where it’s located,” Roy said, mentioning New Bedford, Brayton Point in Somerset, and Salem. “Bringing in a facility that’s going to create jobs, and good paying jobs, and long-term jobs is something that at the end of the day will probably bring in more revenue for the state of Massachusetts than a slightly higher price in electricity. Keep in mind we’re not talking about incredible increments on the price. It has to be a competitive price for Massachusetts to accept the bid.”
Roy said the state needs to invest in offshore wind the way it invested $1 billion over 10 years in the biotech and life sciences industry. “There’s no reason we can’t do the same thing for offshore wind,” he said. “This is a once-in-a-lifetime opportunity to build a new industry.”
Like Baker, Roy supports using some of the state’s federal aid to bolster the development of offshore wind in Massachusetts, but he believes more may be needed. “I would assume that we will take a look at the ARPA funds for some of the pieces, but I wouldn’t say it’s entirely because this is a long-term effort and we’re going to have to put a stream in place that could go out potentially 10 years. The ARPA funds have a smaller time period within which to use those funds.”
Roy said the state has authorized up to 5,600 megawatts of offshore wind. He said that’s enough to power all of Massachusetts and have surplus energy left over to sell. “I’m confident. I’m excited,” Roy said. “It’s nice to know that at least two of the branches of our government are in place to move the offshore wind bill and bolster that industry.”