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Energy and the Environment

Good news, bad news on offshore wind

Good news, bad news on offshore wind

Mayflower price attractive; fed delay confirmed

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THE OFFSHORE WIND INDUSTRY took one step forward and one step backward on Tuesday.

The federal Bureau of Ocean Energy Management said its review of the Vineyard Wind offshore wind project would be completed by June 12 and a final decision on the project issued by December 18 – 15 months later than originally projected. That delay, caused by the need to do a cumulative impact analysis of wind farms going up all along the East Coast, is a setback for the industry and a blow to the state’s efforts to reduce greenhouse gas emissions.

The step forward came with the release of power purchase contracts with the state’s second offshore wind farm, Mayflower Wind. As promised, the contracts showed the price of wind-generated electricity is continuing to fall, a promising sign for a state looking for affordable clean energy.

According to documents submitted by state and utility officials to the Department of Public Utilities, the price of electricity generated by Mayflower over the 20-year life of its contracts will be 7.77 cents a kilowatt hour in levelized nominal dollar terms, or 5.85 cents a kilowatt hour in levelized 2019 dollars. The Vineyard Wind price is 6.5 cents per kilowatt hour in 2019 dollars.

Mayflower, a joint venture of Shell New Energies and EDP Renewables, submitted three original bids. One was a low price bid, a second offered a slightly higher price along with infrastructure and innovation investments, and a third offered a higher price along with manufacturing investments. According to Mayflower, all three of its bids featured prices that were lower than Vineyard Wind’s price.

The utilities unanimously chose Mayflower’s lowest-price bid. In their filing with the Department of Public Utilities on Tuesday, the companies said they consulted with the state’s housing and economic development office and concluded the onshore investments in the second and third bids “were not cost effective because the net present value of the investments did not justify the higher contract costs.”

Mayflower estimates its project will generate 5,520 full-time-equivalent jobs in Massachusetts over the 20-year life of the contracts and 930 jobs elsewhere in the region. Officials believe the wind power will reduce carbon dioxide emissions by 6 million metric tons over the 20-year period.

The company also agreed to pay $55 million to the Massachusetts Clean Energy Center, provide $10 million for marine science and fisheries research, $7.5 million for port upgrades, and $5 million to the Cape Light Compact to help reduce electricity bills for customers with annual incomes of less than 80 percent of the state median income.

Mayflower does not expect to start generating power until September 2025. By contrast, Vineyard Wind had promised to begin operation in January 2022, with the remainder of the project coming online in January 2023.

With the environmental review by the Bureau of Ocean Energy Management not expected to be completed until the end of this year, Lars Pedersen, the CEO of Vineyard Wind, issued a cautious statement that confirmed the project would not begin on time.

“While we need to analyze what a longer permitting timeline will mean for beginning construction, commercial operation in 2022 is no longer expected,” Pedersen said. “We look forward to the clarity that will come with a final environmental impact statement so that Vineyard Wind can deliver this project to Massachusetts and kick off the new US offshore energy industry.”

The expected delay in action on the federal environmental review of Vineyard Wind was first reported February 3 by CommonWealth. Members of the Massachusetts congressional delegation have accused the Trump administration of being biased against renewable energy projects, but a spokeswoman for the Interior Department said the delay was necessary and the allegations by the lawmakers were “unfounded and uninformed.”

Both Vineyard Wind and Mayflower are counting on federal investment tax credits that are being phased out. It’s unclear whether the delays will prevent the firms from obtaining the tax credits.

The contracts the wind farm developers have with the state’s three utilities also require the firms to achieve certain milestones or face penalties. In Vineyard Wind’s case, the company was required to open phase one of its project by January 15, 2022. Unless the contract is reopened and the deadline extended, Vineyard Wind could face “delay damages, and, ultimately, contract termination,” according to DPU filings.

Like the Vineyard Wind power purchase contracts, the Mayflower contracts stipulate that the three utilities who negotiated the agreements are entitled to compensation equal to 2.75 percent of the total value of their contracts. The price tag for that provision was not immediately available, but it added up to $168 million on the Vineyard Wind contract.

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Mass. lawmakers, Trump administration spar over Vineyard Wind review

Mass. lawmakers, Trump administration spar over Vineyard Wind review

Double-standard claim dismissed as unfounded, uninformed

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NINE MEMBERS of the Massachusetts congressional delegation asked the General Accountability Office to investigate whether the Trump administration’s extended environmental review of the Vineyard Wind project reflects a bias against renewable energy – an allegation a spokeswoman for the Department of Interior dismissed as “unfounded and uninformed.”

In a letter to the General Accountability Office, the Massachusetts lawmakers questioned the quick turnaround time for environmental reviews of fossil fuel projects, while the proposed Vineyard Wind project is facing a sweeping, extended review that “threatens to stall or even derail this growing industry.”

“We are particularly concerned that there is a ‘double standard’ at play in which fossil fuel projects are expedited while renewable energy projects are delayed,” the lawmakers wrote.

Carol Danko, a spokeswoman for the Department of Interior, issued a statement dismissing the allegations in the letter. “Members of Congress are free to request the GAO, an entity within the legislative branch who they supervise, to respond to whatever inquiry they want,” she said. “The allegations made by the Massachusetts Democrats are unfounded and uninformed. In reality, the Department of the Interior carries out the appropriate environmental review of impacts of all energy projects – renewable and non-renewable—based on the following: the law, the facts and often after extensive public input.”

The Vineyard Wind project was put on hold indefinitely in August 2019 when the federal government decided to supplement its environmental impact review with a study of the cumulative impact of the many wind farms being proposed along the eastern seaboard. The impact of wind farms on fishermen is a focus of that supplemental review.

Kathleen Theoharides, Gov. Charlie Baker’s secretary of energy and environmental affairs, said earlier this week that she had learned the timetable for completion of that review is December 2020. The Bureau of Ocean Energy Management has so far declined to confirm that timetable.

All of the members of the Massachusetts delegation signed the letter to the GAO except for Reps. Stephen Lynch and Ayanna Pressley. A press release detailing the contents of the letter and the letter itself was issued by the office of Sen. Elizabeth Warren, who is seeking the Democratic nomination for president.

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For offshore wind, expect more delays

For offshore wind, expect more delays

Theoharides: Vineyard Wind's federal review won't be done until December

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FEDERAL AGENCIES ASSESSING the environmental impact of Vineyard Wind are now expecting the long-delayed process to wrap up sometime in December, according to a top Baker administration official.

The Vineyard Wind project was put on hold indefinitely in August 2019 when the federal government decided to supplement its environmental impact review with a study of the cumulative impact of the many wind farms being proposed along the eastern seaboard. The impact of wind farms on fishermen is a focus of that supplemental review.

Kathleen Theoharides, the governor’s secretary of energy and environmental affairs, said on Monday that federal agencies have developed a new timetable for the review of the Vineyard Wind project that calls for the work to be wrapped up by the end of the year.

That timetable is problematic for wind farm developers up and down the coast, but especially for the two companies that have been awarded power purchase contracts by Massachusetts utilities and are eager to begin construction. The lengthy delay also pushes back the starting point for delivery of wind power that is badly needed if Massachusetts is going to meet its greenhouse gas emissions targets.

“What we’ve heard is they’re giving themselves a healthy time budget to make sure they can hit it. And if they can do it faster, they will,” Theoharides said. “Vineyard Wind is still confident they can do the project with that time frame.”

Energy and Environmental Affairs Secretary Kathleen Theoharides testified alongside Gov. Charlie Baker in favor of his climate adaptation bill. (Photo by Andy Metzger)

A spokesman for the federal Bureau of Ocean Energy Management declined to comment on the timetable for the review. He forwarded an excerpt from the agency’s website that said the bureau “is working with cooperating agencies on finalizing a permitting schedule. BOEM anticipates publishing a supplement to the draft environmental impact statement for the Vineyard Wind Project and receiving public comments early this year. The schedule for next steps will be posted on BOEM’s website once it is finalized.”

The original timetable for Vineyard Wind, a joint venture of Copenhagen Infrastructure Partners and Iberdola, called for construction to begin in 2019 and be completed in 2021. The company initially said it needed quick action by the federal government if the project was going to survive, but subsequently backed away from that stance and has indicated it can accommodate some delay.

Mayflower Wind, a joint venture of Shell New Energies and EDPR Offshore North America, is hoping to have its 804-megawatt wind farm up and running in 2025.  Mayflower has said it needs to begin construction this year to take advantage of a federal tax credit.

Vineyard Wind and Mayflower Wind officials had no immediate comment on the regulatory timetable.

Gov. Charlie Baker last year said he hoped the regulatory review could be wrapped up by March, but that target appears to have gone by the wayside.

“It’s not great but it’s better than we expected it to be,” Theoharides said of the December completion date. “It’s better than where the last place the conversations were.”

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Picking apart Rep. Kearney’s fishy argument

Picking apart Rep. Kearney’s fishy argument

Jones Act could strangle offshore wind industry

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YOU MAY HAVE NOTICED a fishy odor from a recent CommonWealth article. It was the smell of red herring, served in an opinion piece by state Rep. Patrick Kearney. On its face, his argument seems reasonable enough: protect American merchant marine jobs by continuing to exclude foreign vessels from serving offshore wind power platforms. Kearney wants federal regulators to strictly interpret part of a 100-year-old law commonly known as the Jones Act. While I disagree with his interpretation, I can’t criticize it as illegitimate. Policy arguments belong in the pages of CommonWealth. Red herring, however, belongs in the fish market.

Kearney’s first fishy argument was to imply that western European vessels supplying offshore wind platforms would harm national security. The fearsome foreigners who are investing in US offshore wind farms are Danish, Spanish, and British – all NATO allies. Their soldiers have shared risks with our own soldiers in the Middle East and the Balkans for decades, through many administrations. I suspect that any former defense secretary, Democrat or Republican, would bristle at the suggestion that our European allies endanger our national security.

The original Jones Act did not justify its cabotage restrictions on vague xenophobia. Congress argued specifically that a thriving merchant marine was necessary to transport US troops and supplies in time of war. But the small, specialized vessels used to service offshore wind platforms are not likely to be used to transport military equipment to distant war zones. As a young US soldier supporting military liaison, I facilitated the movement of US military aircraft and tanks through a Middle Eastern port. I was amazed at the size of the American merchant marine vessels in port — the largest ships I had ever seen in my young life. Such behemoths will not serve small offshore wind platforms or the two Massachusetts ports — New Bedford and Somerset — that are being prepared to support offshore wind. They’re too big. There is no logical link between the huge ships needed to transport war supplies to distant war fronts and the small, specialized vessels that serve nearby offshore wind platforms.

Kearney’s next red herring was dredged up in an argument about unsafe working conditions for crews on a Chinese ship. Indeed, the Chinese do not protect workers’ safety as stringently as we do.  However, the Chinese do not have specialized offshore wind support vessels. The Chinese are not relevant to a discussion of offshore wind power. The Chinese do have specialized ships that service offshore fossil-fuel platforms, but it is highly unlikely that this or any other administration would ever allow Chinese companies to control our strategic, offshore oil or gas platforms. Crew safety on Chinese ships is irrelevant to the debate on regulatory changes to the Jones Act.

Kearney’s final fishy argument is to link the Jones Act to the Beltway Battles, Trump vs Pelosi, and all that. He says that right-wing organizations such as the Heritage Foundation and the Cato Institute criticize the Jones Act, but he doesn’t mention that not-so-right-wing organizations also see economic problems in the Jones Act. As you can see from a recent report by the highly respected, apolitical Congressional Research Service, analysis of the maritime economy doesn’t fit neatly into the political posturing that prevails in Washington. Let’s keep that posturing in Washington and out of our local discussions of local economic development and local jobs.

Ah, yes, jobs. Kearney did drag up one meaty argument in his otherwise fish-filled net — protecting the jobs of American merchant mariners. And he’s partially right. Excluding the small, specialized vessels of European investors from our coastal waters will prevent Europeans from serving the offshore wind industry with their existing technology and equipment.

Kearney implicitly supposes that American companies will rush in to serve offshore wind platforms, but there is reason to fear that they won’t. The Jones Act has forbidden foreign vessels from inter-coastal trade between American ports since 1920, but inter-coastal marine trade has dwindled, while most of our freight that is not carried by rail further clogs our already clogged highways.  American firms did not rush in to replace excluded foreign vessels.

Offshore wind turbines will need service immediately and European investors may not wait another hundred years for American firms to provide this service. If European investors are not allowed to use their own technology to get their new investments started, those investments may be delayed. I certainly hope that American firms will rise to the challenge and find competitive niches in this new market. I hope that new jobs for building, manning, and supplying specialized service vessels will grow in our coastal communities. But I don’t want to risk killing the new offshore wind industry by forcing it to use only American vessels that do not yet exist.

The new offshore wind industry may die if it is strangled by old regulations designed to protect old jobs. If it dies, many new marine technology jobs will die with it. The choice is clear. You can either protect a few old jobs by excluding European ships and crews from servicing their investments offshore, or you can encourage many new jobs in the offshore wind industry. You have to choose – you can’t have it both ways. Tell Congress that you support recent regulatory interpretations of the Jones Act that allow European investors to bring in their own specialized vessels to support offshore wind platforms.

I won’t hide my own bias. I’m a resident of Somerset, a town on Mount Hope Bay, and I welcome the development of our industrial port at Brayton Point into a major service and manufacturing center for offshore wind. Somerset’s local ship builder, Gladding-Hearn, already builds and repairs small, specialized ships for ports around the western hemisphere. I expect this vibrant, local firm to find a competitive niche serving the offshore wind industry. Our local community college, Bristol, offers training and certification in offshore wind technology for young workers in a region where young workers have few opportunities. I hope that offshore wind and other industries in which we have a comparative advantage may begin to reverse the economic disadvantages we have had for generations.   I believe that our future lies in adapting to the future and not in protecting the past.

Lloyd Mendes is a resident of Somerset. He is Somerset’s commissioner to the Southeastern Regional Planning and Economic Development District, but the opinions expressed here are his own.

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Healey: Stop individual residential electricity sales

Healey: Stop individual residential electricity sales

‘The problem is only getting worse,” AG says

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THE COMPETITIVE ELECTRIC SUPPLY INDUSTRY has overcharged Massachusetts consumers for far too long. We’ve all seen these companies in action. They go door-to-door, send letters in the mail, and call over and over with promises of cheaper electricity, or a locked-in low rate that they claim will save you money. They promise if you sign up and switch your electricity service from your utility company, they’ll provide consistent savings and lower bills. But the truth is, they won’t.

After receiving over 1,000 complaints about these companies and their predatory tactics from residents across the state, my office decided to take a close look at what was actually going on in this industry. We crunched the numbers on dozens of companies and thousands of customers in cities like Lawrence, Springfield, Worcester, Quincy, and Boston.

The results were shocking. Two reports issued by my office in 2018 and 2019 found that all across Massachusetts, in nearly every community we examined, hundreds of thousands of residents aren’t paying less with these suppliers, they’re paying more. In fact, they are paying a lot more. These companies are using predatory tactics like forcing their way into residents’ homes, pretending to be from a utility company in order to get consumers to turn over sensitive information, and sending out mailings that resemble communications from a utility.

The problem is only getting worse. Our third report, which will be out soon, shows that between July 2015 and June 2019, Massachusetts residents who switched to a competitive electric supplier paid $340 million more than they would have paid if they had stayed with their utility company. It’s clear the industry hasn’t taken steps to reduce consumer harm. Our newest data shows that consumer losses increased over the previous year from $76 million to $87 million.

The numbers are even worse for low-income residents, who are signed up at double the rate of higher-income households. On average, low-income residents who’ve signed up with competitive suppliers are paying $196 more each year than they should have paid for their electricity. We even found some low-income residents overpaid by $300 a year.

Residents in our Gateway Cities are being hit particularly hard by this industry. Worcester residents signed up with competitive suppliers consistently pay the most. In the month of September 2018, Worcester residents enrolled with a supplier collectively overpaid by $353,000. In Lynn, 10,000 families forked over an extra quarter of a million dollars in just one month in 2018. Similar losses were found in Brockton, where 34 percent of households were locked into contracts with suppliers.

As the state’s ratepayer advocate, it’s my job to protect consumers from the unfair and deceptive practices of misleading and predatory businesses, and that often requires extensive investigations. My office secured almost $20 million through settlements with three suppliers and one marketing firm.  Most of that money goes toward paying back affected Massachusetts customers. Each of these suppliers also agreed to strict injunctive relief for low-income customers and people on variable rate contracts.

My office is also working hard to teach consumers about how to protect themselves from the misleading practices of this industry, and what questions to ask or what to look for when a supplier shows up at their door. In the past six months, my community engagement division has held consumer protection trainings on competitive supply in 25 communities across the state.

But despite these lengthy investigations, sizeable punitive settlements, and consumer trainings, this industry is continuing to deceive and overcharge Massachusetts consumers. Things need to change. Earlier this week, I testified before the Joint Committee Consumer Protection and Professional Licensure on legislation (H 311 and S.195) I filed last year, along with Rep. Frank Moran from Lawrence and Sen. Jim Welch from Springfield, to ban these companies from signing up new individual residential customers.

I understand that competitive supply has been a good thing for commercial and industrial customers. Many towns and cities also have municipal buying programs that are working well. But that’s just not true for individual residential customers.

The only defenders of these practices are the companies themselves. Unfortunately, while what is happening here in Massachusetts is not unique — the same issues are present in the dozen or so other states that have this type of market — we are delayed in implementing policies to protect our consumers.  In the last year, our neighbors in New York, Connecticut, and Rhode Island each took steps to curtail the consumer harm caused by this industry.

This legislation will stop these companies once and for all from overcharging Massachusetts consumers by barring them from making any more individual residential sales. Four years of data confirms that this problem isn’t limited to a few bad actors. We have the opportunity to act now and stop these companies from preying on our residents.

Maura Healey is the attorney general of Massachusetts.

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Mayflower Wind, without contract, moving ahead

Mayflower Wind, without contract, moving ahead

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Mayflower Wind still doesn’t have a final contract for its offshore wind farm off the coast of Nantucket, but it appears to be moving ahead with the project anyway in a bid to tap federal investment tax credits.

A press release issued by a joint venture of two Danish companies on Wednesday indicated Mayflower has hired them to build a 1,200 megawatt offshore substation. “The offshore substation project will be initiated in January 2020,” says the press release put out by Semco Maritime, an engineering and contracting company, and Bladt Industries, a steel construction firm.

Michael Brown, the chief financial officer of Mayflower, said in the press release that the contract with Semco and Bladt is part of an effort to obtain federal tax credits before they expire.

“Recent changes to US tax law now allow projects that meet qualification standards in 2020 to secure federal investment tax credits at the 18 percent level,” Brown said. “This contract is a key step for us to meet those standards and secure tax credits that would ultimately result in a lower rate for electricity customers in Massachusetts.”

In its bid for the wind farm contract, Mayflower offered three major options — a lowest-price option, an option with a slightly higher price but with more onshore investment, and an option with a still higher price along with far more onshore investment. The company said the price in all three bids would be less than what Vineyard Wind promised in its head-turning winning bid for the state’s first offshore wind farm.

The state’s three utilities, with no apparent pushback from the Baker administration, selected Mayflower’s lowest-price option, which disappointed officials on the South Coast who are looking to offshore wind as a way to generate more economic activity and jobs in the region.

Mayflower, a joint venture of Shell New Energies and EDPR Offshore North America, is hoping to have its 804-megawatt wind farm up and running in 2025.

Mayflower Wind won the state’s second offshore wind contract at the end of October, but the terms of the deal spelling out the price and other obligations remain under wraps. The original goal was to finish the contract on December 13, but that deadline passed with no action. On Tuesday, the state’s three utilities, who are handling the negotiations with Mayflower, said they struck a final deal Friday evening. But, again, they said the terms of the deal would not be released until the document is sent to the Department of Public Utilities for approval, which is expected to occur no later than February 10.

John Hartnett, Mayflower’s president, said in a telephone interview that the company is taking some risk in moving forward with construction before the final contract is in place. A federal environmental review that has delayed construction of Vineyard Wind is also dragging on.

But Hartnett said he is confident the Mayflower Wind’s contract will get done and the wind farm will go up. He’s so confident that the company is building a 1,200 megawatt substation to accommodate the firm’s future growth in its lease area off the coast of Nantucket.

“Climate change is real and we really need to get moving,” Hartnett said. “That’s why I’m confident we’ll move forward with this project.”

BRUCE MOHL

BEACON HILL

The Massachusetts Health Policy Commission identifies three troubling cost trends, and two of them trace back to the state’s most expensive health care system, Partners HealthCare. (CommonWealth)

Legislation to revive rent control draws a big crowd to the State House. (State House News)

New Hampshire Gov. Chris Sununu says he thinks the multistate Transportation Climate Initiative is toast, but Gov. Charlie Baker’s top environmental aide tells lawmakers she remains “fully committed to getting TCI done” and is not looking at any “Plan B.” (Boston Herald)

MUNICIPAL MATTERS

Members of the Falmouth Board of Selectmen say they will wait for water sample results to address asbestos concerns in the town. (Cape Cod Times) 

Residents of Fall River continue to air grievances to the City Council over marijuana retailer Northeast Alternatives’ impact on traffic congestion, odor, and property damage, so far to no avail. (Herald News)  

WASHINGTON/NATIONAL/INTERNATIONAL

New materials released by House Democrats show previously unreported efforts by Rudolph Giuliani, President Trump’s personal lawyer, to gather information in Ukraine to undermine Trump rival Joe Biden. (Washington Post)

Trump is vowing to veto a “forever chemicals” bill, stirring anger in Massachusetts. (Eagle-Tribune)

ELECTIONS

The issue of the electability of a woman candidate for president took centerstage at last night’s Democratic presidential debate, with no sign of a cooling off of the conflict between lefty rivals Bernie Sanders and Elizabeth Warren. (Boston Globe)

BUSINESS/ECONOMY

Business leaders in the state are increasingly upbeat about the Massachusetts economy, according the latest survey of top private sector brass from Associated Industries of Massachusetts. (Boston Globe)

EDUCATION

The Pioneer Institute’s Charles Chieppo and Jamie Gass criticize Massachusetts for abandoning its recipe for educational success. (CommonWealth)

Jose Fuentes, a tech entrepreneur, moves up from vice chair to become chair of the Hampshire College board of trustees. (Daily Hampshire Gazette)

HEALTH/HEALTH CARE

A new study conducted at McLean Hospital in Belmont says heavy marijuana use by those younger than 16 is linked with poorer driving as adults, even when not under the influence of drugs, highlighting the growing evidence of the risks of pot use among adolescents. (Boston Globe)

With flu season well underway, South Shore Hospital’s emergency room is seeing about 20 percent more patients than normal, causing long wait times and overcrowding and stretching staff and resources thin. (Patriot Ledger)

CRIMINAL JUSTICE/COURTS

Sen. Jamie Eldridge, the cochair of the Legislature’s Judiciary Committee, says the 2018 criminal justice reform bill had nothing to do with last Friday’s attack by inmates on corrections officers at the state maximum security prison in Shirley, and he said the state has actually failed to implement the new law’s provisions dealing with prisoners. (WBUR) The Lowell Sun, in an editorial, thinks otherwise.

A revoked registration led to a  Brockton traffic stop that resulted in illegal firearm charges for four people Saturday. (The Enterprise) 

A Boston police officer is facing multiple charges, including witness intimidation, after allegedly mailing a fake State Police citation to a driver he said cut him off on Interstate 93. (Boston Globe)

MEDIA

The New York Times passes its goal of $800 million in digital revenue a year ahead of schedule.

States Newsroom, which funds independent state house coverage, is expanding to at least 20 new state capitols. (Axios)

With its new bureau in Worcester, WGBH wants to bring Worcester news to its audience. (Telegram & Gazette)

Ken Doctor says “industry vulture” Alden Global Capital is already having an influence at Tribune Publishing, helping the newspaper company cut costs. (Nieman Journalism Lab)

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Mass. Clean Energy Center needs more funding

Mass. Clean Energy Center needs more funding

Without more money, climate change efforts jeopardized

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OVER 111,000 PEOPLE WORK in Massachusetts’ dynamic clean energy economy, due to a powerful combination of leading policies, strong talent, and key institutions. At the center of this dynamic industry is the Massachusetts Clean Energy Center (MassCEC). Founded by the Green Jobs Act legislation in 2008, this quasi-public agency’s mission is to put public renewable energy trust funds to work to build a clean energy economy.  For the past decade it has been quite successful, serving as a ground-breaking national model and positioning Massachusetts as an international climate leader by advancing clean technology innovation, job creation, and investment, leveraging more than $1.78 billion in private capital.

But MassCEC is in danger of fading away, just when we need its continued leadership most.

MassCEC’s success at this critical time is at risk because of significantly decreased funding. In 2018, MassCEC put $74 million to work, but that number dropped to $30 million in 2019 and is forecasted to drop even lower in the years to come. For comparison, the New York State Energy Research Development Agency (NYSERDA), projects to have a budget for comparable activities of $406 million.

Several factors, including MassCEC’s effectiveness at running key programs, have led to its current funding challenge. When created, MassCEC took over the state’s renewable energy trust fund with a mandate to spend down its considerable balance. The trust is funded by a renewable energy charge on electricity bills, amounting to 29 cents per month for an average residential customer, that generates roughly $22 million a year. In addition, MassCEC received funding from compliance payments under other clean energy programs which no longer produce revenue for the agency. Finally, a legal dispute in 2019 resulted in a $20 million verdict against MassCEC. Each has contributed to the current crisis.

If not addressed, MassCEC’s funding decline will significantly jeopardize the Commonwealth’s climate leadership at a time when the international consensus among scientists and policymakers has never been clearer: climate action is needed now. The global movement to address this crisis will undoubtedly require clean technology innovation as an essential part of the solution.

Through the leadership of MassCEC over the past decade, Massachusetts has become an internationally recognized innovation hub for clean technology, attracting new innovative companies and large industries alike. MassCEC powers the clean technology startup innovation ecosystem in the Commonwealth with a variety of indispensable investments, grants, pilot and demonstration programs, and workforce development initiatives, including a program that funds internships for students at clean energy innovation companies. In doing so, MassCEC has attracted matching private sector dollars to support young clean technology companies across the state.

The strength of the clean technology innovation ecosystem here in the Commonwealth has in turn drawn large companies from across the globe to establish headquarters, expand offices, and invest in Massachusetts. Firms like Schneider Electric, GE, Enel, Veolia, and Engie now call the Commonwealth home.

MassCEC’s role in launching the offshore wind sector helped attract global leaders like Orsted, Vineyard Wind, MHI Vestas, and Mayflower Wind. These companies are opening new offices here and are aiming to invest billions in scaling offshore wind (the manufacturing and supply chain infrastructure could be built in the Commonwealth as well). Others will join if we remain committed to making Massachusetts a stable and forward-looking environment for clean energy innovation and policy.

Our international leadership in the life sciences industry is proof that with vision and sustained commitment, we can build a world class innovation hub in the Commonwealth. Our state starts from a position of unique strength: we have all the building blocks, including talent at varying skill levels, leading universities, dynamic financiers, and the emerging and established companies needed to succeed.

We stand ready to partner with MassCEC and Gov. Charlie Baker to meet our climate challenge. The coming decade demands climate action that will only be brought about by a clean energy market transition and growth for electric vehicles, clean transportation, energy storage, smart grid, solar energy, and offshore wind. Today, Massachusetts risks losing its climate leadership, as well as the jobs, private investments, and company headquarters that MassCEC has helped to build. Now is the time to refresh and affirm MassCEC’s critically important mission and to revitalize its funding to reap the many benefits of its leadership — now and into the future.

Peter Rothstein is president of NECEC (Northeast Clean Energy Council and NECEC Institute). Emily Reichert is chief executive officer of Greentown Labs, the largest clean technology startup incubator in North America. Robert Rio is senior vice president for government affairs at Associated Industries of Massachusetts. Elizabeth Turnbull Henry is president of the Environmental League of Massachusetts. 

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Fishermen, wind farm developers at odds

Fishermen, wind farm developers at odds

Battling over size of navigation lanes for fishing vessels

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A GROUP REPRESENTING New England fishing interests on Tuesday called for special travel lanes through offshore wind farms proposed off the coast of Massachusetts and Rhode Island, putting the fishermen at odds with wind farm developers who want to retain as much space as possible for their turbines.

The Responsible Offshore Development Alliance called for the creation of six travel lanes, each one four nautical miles in width, through the entire lease area off the coast of the two states. The offshore wind developers in November had proposed no special travel lanes, choosing instead to let fishermen navigate through turbines set one nautical mile apart traveling north and south and seven-tenths of a nautical mile going diagonally.

Federal regulators, who had hoped the two sides would find some common ground on their own, will now have to decide the best approach.

Annie Hawkins, executive director of the Responsible Offshore Development Alliance, criticized federal regulators for leaving the issue of safe navigation through the wind farms to negotiations between fishermen and wind farm developers outside the regulatory process. She said it was disappointing that such an important safety issue is still being talked about so late in the regulatory process.

“Only now are we talking about what would be sufficient travel lanes,” she said in a telephone interview.

Federal regulators put the initial $2.8 billion Vineyard Wind project on hold in August amid concerns that its layout could be different from other projects coming along in the development pipeline and create problems for fishermen and others navigating the area.

To address concerns raised by federal regulators, Vineyard Wind and the four other developers with leases offshore agreed to a standard configuration for their wind farms. Vineyard Wind had proposed a wind farm with 84 turbines arranged on a northwest-southwest orientation, with the turbines spaced nearly nine-tenths of a nautical mile apart. The five developers in November agreed to a uniform east-west orientation, with the turbines a minimum of one nautical mile apart.

The six travel lanes proposed by the Responsible Offshore Development Alliance will eat up space in the wind farm area, reducing how many wind turbines can be installed there. The five developers – Vineyard Wind, Mayflower Wind, Ørsted/Eversource, and Equinor – said the compromise proposal they released in November significantly reduced the amount of energy they could produce. “Including even more and even wider transit lanes would unnecessarily decrease the amount of clean offshore wind energy available to mitigate the harmful effects of climate change and to serve the needs of electricity customers in New York and New England,” the companies said in a joint statement.

Hawkins, however, said the travel lanes were drawn in a way that would not disrupt wind farms that have already negotiated power purchase agreements for their electricity. She said travel lanes would only impact future wind farms.

When its project was put on hold initially last summer, Vineyard Wind said it needed quick action by the Bureau of Ocean Energy Management to avoid having to cancel the project. The developer subsequently backed off that stance, and it’s unclear now how quickly the federal regulatory process will be concluded.

In its January 3 letter to federal officials with the Bureau of Ocean Energy Management, the US Coast Guard, and NOAA Fisheries, the Responsible Offshore Development Alliance urged the regulators to take into account its proposal for travel lanes as they review the impact of the wind farms on the area. The alliance urged the Coast Guard to conduct its review “in a manner that recognizes the paramount right of navigation over all other uses in the relevant areas as required by law.”

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Offshore wind tax credit doesn't make cut

Offshore wind tax credit doesn’t make cut

Pulled from federal legislation at request of White House

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STATE HOUSE NEWS SERVICE

CLIMATE ADVOCATES and industry groups were critical of the US House this week after a long-term extension of a tax credit designed to assist offshore wind energy developers did not come to pass as part of spending bills, but some wind watchers said offshore projects might still be able to claim some federal benefits.

The House adopted a series of tax law updates and tax credit extensions earlier this week, but an expansive package of clean energy tax credits — including new incentives specific to offshore wind — that have been proposed in the House was not included in the final language, angering advocates.

“The tax credit extensions for clean energy that are included in Congress’ spending deal are weak at best,” Shannon Heyck-Williams, director of climate and energy policy at the National Wildlife Federation, said. “Market forces for clean energy are strong, but the absence of any tax support for energy storage, offshore wind, solar power and electric vehicles risks hindering the ability of these needed technologies to scale up at the pace necessary to protect people and wildlife from climate catastrophe.”

The offshore wind industry and climate groups had been hoping that the tax policy bundle would include a five-year extension of the investment tax credit to support the construction of wind farms offshore along with an extension of the production tax credit for land-based wind energy. The tax credit is thought to be a lynchpin of the financing for offshore wind projects.

The spending bills — approved by the House on Tuesday and expected to be passed by the Senate by the end of the week — include a one-year extension of the production tax credit largely utilized by land-based wind projects, but not the offshore-centric tax incentive. The credit had been due to expire at the end of the year, but that sunset date would be extended to Jan. 1, 2021, as long as the Senate goes along with the bill, as it is expected to do to avoid a government shutdown.

US Rep. Richard Neal’s Ways and Means Committee was among the parties involved in the deliberations over the tax extender package. His office said that an offshore wind extension was in the bill text as of 8 p.m. Monday, but was pulled at the last minute based on a request from the White House.

The American Council on Renewable Energy (ACORE) said the extenders package represented “a squandered opportunity.”

“While ACORE supports the modest extensions in the package, they will do little for renewable growth and next to nothing to address climate change. Given bipartisan support for tax incentives for energy storage, offshore wind, electric vehicles, and other critical clean energy priorities, this outcome is deeply disappointing. This is not the time to be kicking the climate can down the road,” Gregory Wetstone, president and CEO of ACORE, said.

Though the House did not directly address offshore wind in its $1.4 trillion pair of spending bills, industry watchers said offshore projects might still be able to take advantage of the one-year extension of the production tax credit.

The Internal Revenue Service allows developers to treat certain projects that qualify for the production tax credit as “energy property” and then elect to claim the investment tax credit for that project instead, essentially using the production credit as a pass-through to get to the investment tax credit.

So while the House’s tax package did not include an enhanced tax credit or special treatment for offshore wind, those developers will still be able to access federal tax benefits since the production tax credit was extended for a year.

The American Wind Energy Association said an offshore wind project that commences construction in 2020 — as the stalled Vineyard Wind I project hopes to do — could elect to take the 60 percent production tax credit or an equivalent investment tax credit, which would work out to roughly 18 percent. An 18 percent investment tax credit would equal the credit’s value for projects that begin construction in 2018 and is a more significant benefit than the 12 percent credit available to projects that began construction this year.

Though the offshore wind-specific tax credit was not included in the most recent spending bill, it is part of a standalone bill introduced in draft form last month by Neal’s Ways and Means Committee. The status of that bill remains unclear, though Democrats who worked to craft the bill have said they hope to file it and get to a hearing early in 2020.

At the state level, House Speaker Pro Tempore Patricia Haddad filed a bill (H 2487) that would create a commission to review how the loss of the federal tax credit would affect the offshore wind industry in Massachusetts as well as “policies and programs that could alleviate any negative impacts.” The bill has had a hearing and is pending before the Joint Committee on Revenue.

 

“Federal policy is the key catalyst truly capable of bringing the profound systemic changes we need to fruition,” he said.

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Healey seeks DPU crackdown on electricity sellers

Healey seeks DPU crackdown on electricity sellers

Says industry targets low-income ratepayers, harms everyone

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ATTORNEY GENERAL MAURA HEALEY is asking the state Department of Public Utilities to investigate whether competitive electricity suppliers are charging low-income customers unreasonably high rates and whether those higher charges are driving up the utility bills of all ratepayers.

Healey’s office has conducted two studies suggesting consumers who sign up with competitive electricity suppliers pay significantly more money than they would if they bought so-called basic service electricity procured by their local utility. One study said the extra cost to low-income customers totaled $57 million over a three-year period.

Healey is pushing legislation that would place an outright ban on competitive electricity suppliers, but the measure hasn’t made much headway yet on Beacon Hill. Now she is asking the DPU to investigate and possibly take action against the companies, which have been accused of targeting low-income customers, using hard-sell tactics, and making misleading sales pitches.

The Connecticut Public Utilities Regulatory Authority earlier this month proposed moving all low-income customers purchasing electricity through competitive suppliers on to basic service as soon as practical. The New York Public Service Commission barred competitive sales to low-income customers in 2016.

One interesting twist to Healey’s DPU argument is that the financial cost of overpriced electricity contracts doesn’t just impact the customer buying the power. In documents filed with the DPU, Healey said the agency should investigate whether low-income customers who purchase higher-priced electricity from competitive suppliers end up driving up the utility bills of everyone.

For example, qualifying low-income customers typically receive a significant percentage discount on their entire utility bill. The cost of the discount is paid for by all ratepayers. If the bill of a low-income customer is higher because the electricity being purchased costs more, the cost of the discount ends up being more, driving up costs for all ratepayers.

Healey says there are a number of other subsidy programs that operate similarly.

Competitive electricity suppliers have lobbied hard against Healey’s legislation and are likely to oppose her efforts at the DPU. One industry official said in an op-ed earlier this year that eliminating competitive electricity suppliers would limit customer choice. “Competitive and choice breed innovation,” he wrote.

Healey doesn’t see it that way. “For too long, our office has seen low-income residents in Massachusetts targeted by competitive suppliers and overcharged by millions of dollars on their electric bills,” she said in a statement. “These jacked-up costs harm not only these customers, but also all of our state’s ratepayers, and weaken our low-income support programs. We are calling on the Department of Public Utilities to protect our most vulnerable residents from these predatory companies and their deceptive tactics.”

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