Baker reverses course on utility contracting

One of the most bizarre contracting arrangements in state government may soon be coming to an end. 

In 2016, the Legislature passed and Gov. Charlie Baker signed a law containing a provision putting the state’s three private utilities in charge of negotiating contracts for clean electricity on behalf of the state. Eversource, National Grid, and Unitil were given the authority to pick the clean energy supplier; only if the three companies couldn’t agree could state regulators step in and take action. 

Baker on Wednesday said he was filing legislation to change the way the state procures offshore wind contracts, including transferring the authority to select the winning bidder from the utilities to the Department of Energy Resources. 

The initial decision to put the utilities in charge was strange for several reasons. First, it put private companies in charge of very public decisions about power contracts costing ratepayers billions of dollars. Second, the utilities were compensated handsomely, getting paid 2.75 percent of the contract’s value, even though their risk was minimal. Finally, the utilities evaluating clean power contract bids often found themselves sitting across the bargaining table from themselves, since in many cases separate arms of the utilities were partnering with the companies submitting bids. 

Donald Jessome, the CEO of TDI New England, told CommonWealth in 2017 that he liked his company’s chances of winning a contract to deliver hydroelectricity from Quebec because his firm already had most of the permits it needed to begin construction. But he said he was worried about the competition, which included affiliates of Eversource and National Grid, two of the utilities evaluating the bids. 

“At the end of the day, I’m being graded by my competitors,” he said. “I can’t help but be concerned. It’s not the best place to be in a competitive process.”

Dan Dolan, the president of the New England Power Generators Association, felt similarly. “It’s hard to claim that a company that writes the RFP, bids on the [request for formal proposals], and decides who wins the RFP is unbiased,” he said. 

TDI ultimately lost out to a project affiliated with Eversource, which ultimately fell by the wayside when it couldn’t get a key permit for a power line from the state of New Hampshire. The deal then was handed off to Central Maine Power, which is still trying to nail down its final approvals for a power line running through Maine.

What made the arrangement with the state’s utilities most unusual was that it put utility executives – not elected officials – in charge of setting state policy. Most people knew state law put the utilities in charge of selecting clean energy contract winners, but they assumed the Baker administration was really calling the shots behind the scenes. 

The Baker administration did little to dissuade that assumption. When Mayflower Wind won its contract in 2019, Baker administration officials made the announcement and briefed reporters. The officials declined to say why Mayflower Wind’s lowest-price offer was selected instead of others put forward by the company that offered slightly higher prices but came with more onshore investment. 

Yet when news stories appeared suggesting the Baker administration had made the contracting decision, state officials demanded corrections, insisting it was utility executives, and not them, who had selected Mayflower Wind’s lowest-priced offer. 

Rep. Patricia Haddad of Somerset said at the time that it was starting to dawn on lawmakers that it was a mistake to put the state’s utilities in charge of the procurement process. She and many others on the South Coast had written letters to the Baker administration imploring officials to take onshore investment seriously, but with the Mayflower Wind procurement she learned the Baker administration wasn’t making the decision, the utilities were.

In filing his legislation, Baker said giving the Department of Energy Resources the authority to select contract winners would “provide an additional level of independence” and “ensure an open, fair, and transparent solicitation and bid selection process.” He also noted the utilities would be paid a fixed fee of 2.5 percent of the contract’s value for carrying the contracts on their books.

A copy of Baker’s legislation was not immediately available.

BRUCE MOHL

FROM COMMONWEALTH

No knockout blows: Annissa Essaibi George tried to paint Michelle Wu as out of touch on rent control and police funding during their first Boston mayoral debate, but overall the two candidates seemed to be reading from the same policy playbook. There were no knockout blows or memorable one-liners during the debate, which raised the question of whether Essaibi George was doing enough to overcome a big deficit in recent polls. Read more.

Offshore wind shift: Gov.  Charlie Baker signaled a major shift in his thinking on offshore wind, filing legislation that would have the state and its electricity ratepayers spend more to try to land the onshore economic development accompanying the emerging offshore wind industry. Baker’s bill calls for spending $750 million of federal aid on clean energy infrastructure and doing away with a price cap on power contracts that many believe has hindered onshore investments.

— Baker’s shift brings him in line with current thinking in the House, but may put him at odds with Senate leaders wary of removing the emphasis on purchasing offshore wind power at the lowest possible price. Sen. Michael Barrett of Lexington said state ratepayers already pay some of the highest rates in the nation. “Because of the climate crisis, we need to go all-electric with respect to both our cars and our heating systems, which means we need to boost our overall consumption of electricity in the teeth of our high per-unit costs. It’s a dicey time to bring up abolishing price constraints,” he said.

Alzheimer’s drug fallout: The Food and Drug Administration’s approval of a questionable Alzheimer drug developed by Biogen spurs boycotts by hospitals and insurers and calls for regulatory reform from those who say the drug-approval processes at the FDA and Medicare need overhauls. Read more.

OPINION

Hold off on BPDA: Peter O’Connor, a former lawyer and government official in Boston who now lives in Connecticut, says Michaell Wu, if she wins the race for mayor, should not make abolishing the Boston Planning and Development Agency her top priority. Read more.

 

FROM AROUND THE WEB

 

BEACON HILL

A new legislative push is on for a primary seatbelt enforcement law that would allow drivers to be pulled over for not buckling up. Currently, a citation can only be given if someone is stopped for another reason. (Boston Herald

Voting rights groups and Black leaders in Brockton are not happy with the proposed Senate redistricting map, which joined the majority-Black city with mostly white suburbs rather than Randolph, Avon, and Stoughton, which have larger minority populations. (Boston Globe

MUNICIPAL MATTERS  

After racist remarks are directed at a Black Beverly school committee member at a public meeting, other residents come to her support. (Salem News)

The East Longmeadow town manager quits, citing a “toxic environment” and verbal abuse by a town councilor. (MassLive)

Suffolk County Sheriff Steve Tompkins makes the case for his addiction treatment plan at Mass. and Cass. (Boston Globe

Acting Mayor Kim Janey said Boston city employees who shun the vaccine mandate could ultimately face termination, though she stressed the goal is to see everyone come into compliance with the policy. (Boston Herald)

ELECTIONS

Republican Jeffrey Sossa-Paquette is challenging incumbent Democratic US Rep. Jim McGovern and says opposition to human trafficking, the national debt, and states rights are key to his campaign. (Telegram & Gazette)

The changing demographics in Boston are playing out in the mayor’s race as the electorate shifts more progressive. (Bay State Banner)

Sen. Adam Hinds of Pittsfield launches his campaign for lieutenant governor, saying he would take a “different approach” with the job. (Berkshire Eagle)

More from the latest poll for WBUR, the Dorchester Reporter, and the Boston Foundation: Just a quarter of Boston voters say they could afford to buy a home in their current neighborhood over the next five years, and more than half of likely voters in Boston have a favorable view of the Boston Police Department. (WBUR)

BUSINESS/ECONOMY

A domino effect in state unemployment benefit calculations has those out of work from high-paid jobs getting a big bump in payments because the shortage of low-wage workers has pushed up wages at that end of the labor market. (Boston Globe)

The families of two fishermen who died at sea are involved in a new effort with the Seaworthy Foundation to promote safety within the commercial fishing industry. (Standard-Times)

Fishermen say new offshore fishing restrictions ordered by the Biden administration will hurt New Bedford area businesses. (New Bedford Light

EDUCATION

After a student assaults a teacher at Lawrence High School, the Lawrence mayor says mental health issues caused by the COVID pandemic are to blame for a recent uptick in school-based violence. (Eagle-Tribune)

A conservative Hanover High School teacher says she was fired over comments she made on social media about race and gender. (Patriot Ledger)

MIT cancelled a talk by a University of Chicago geophysicist about the possibility of life on distant planets because of his comments on diversity and inclusion policies on this one. (Boston Globe)   

TRANSPORTATION

Lawmakers consider a bill that would let communities install red light cameras to automatically ticket people who run red lights. (Gloucester Daily Times)

A  new study done by advocates for East-West rail finds that if Boston to Springfield commuters also have a connection south to Hartford, that could boost ridership by 54 percent over estimates completed by MassDOT. (MassLive)

ENERGY/ENVIRONMENT

Eversource is withholding millions of dollars of tax payments from 87 communities, due to a dispute over how its property is valued. Litigation is ongoing. (MassLive)

Vineyard Wind says it would sell power to municipal light plants if it wins a power contract from Massachusetts ratepayers. (Cape Cod Times)

CRIMINAL JUSTICE/COURTS

A lawsuit brought by correctional officers against Gov. Charlie Baker’s vaccine mandate goes to federal court today. (Salem News)

The Supreme Court seems poised to reinstate the federal death penalty against Boston Marathon bomber Dzhokhar Tsarnaev. (New York Times)

A former New Bedford police sergeant admits to stealing $50,000 in union funds to pay for personal expenses. (MassLive)

MEDIA

The Atlantic takes a deep dive on Alden Global Capital and its secretive founders, the men racking up huge fortunes by dismantling of many of the nation’s newspapers.

Emails gathered as part of an NFL investigation indicate ESPN’s Adam Schefter shared a draft of an article 10 years ago with a top official at the Washington football team and asked the official, who he referred to as “Mr. Editor” in the email, to check it for accuracy. (Poynter)

New York Times columnist Nicholas Kristof steps down as he considers a run for governor of Oregon. (New York Times