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Lawmakers walk tightrope on wind power contracts

The Legislature’s energy experts say it makes sense to penalize CommonWealth Wind and Mayflower Wind if they default on their recently approved power purchase contracts, but the lawmakers don’t want the penalties to include a ban on participation in an upcoming offshore wind procurement.

The House and Senate chairs of the Legislature’s Utilities, Telecommunications, and Energy Committee say the state needs to walk a fine line between penalizing the companies but not penalizing itself. 

The Department of Public Utilities on December 30 approved power purchase contracts between the state’s three utilities and Commonwealth Wind and Mayflower Wind. Avangrid, the developer behind Commonwealth Wind, said it couldn’t finance its project with the existing terms, and Mayflower, a joint venture of Shell Energy Ventures and Ocean Winds, said it faces a similar predicament.  

Appearing on The Codcast, Sen. Michael Barrett of Lexington and Rep. Jeffrey Roy of Franklin said they were sympathetic to the challenges the wind farm developers are facing, including rising inflation and interest rates, supply chain difficulties, and the war in Ukraine.

“The world is a different place,” Barrett said. “The war in Ukraine could not have been anticipated. The impact on natural gas prices in Europe and the attraction of LNG toward Europe and away from New England which relies on LNG [liquefied natural gas] for winter heating could not have been entirely anticipated. Supply chain disruptions are real.”