In what could be a foreshadowing of future offshore wind pricing, Rhode Island’s leading utility this week opted not to move forward with a project called Revolution Wind 2 because the cost of the electricity was deemed too high.

“Higher interest rates, increased costs of capital and supply chain expenses, as well as the uncertainty of federal tax credits, all likely contributed to higher proposed contract costs,” said the utility, Rhode Island Energy, in a press release. “Those costs were ultimately deemed too expensive for customers to bear and did not align with existing offshore wind power purchase agreements.”

Those same cost factors are wreaking havoc in Massachusetts. Two major offshore wind developers in Massachusetts are terminating their power purchase agreements with the state’s utilities because the developers say the agreements, hammered by inflation, interest rate hikes, supply chain disruptions, and the war in Ukraine, are no longer sufficient to secure financing for their projects.

The developers hope to rebid the contracts in the state’s next procurement in 2024, presumably at much higher prices. The decision by Rhode Island Energy could foreshadow the pricing Massachusetts might see next year.

PPL Corp. bought Narragansett Electric from National Grid in May 2022 and renamed it Rhode Island Energy. The utility in October issued a request for proposals for 600 to 1,000 megawatts of offshore wind. A joint venture of Orsted and Eversource was the lone bidder with its 884 megawatt Revolution Wind 2 wind farm. A deal with Revolution Wind 1 was signed in 2019 and the project is expected to become operational in 2025.

On Tuesday, after a four-month review and consultation with two state agencies, Rhode Island Energy released a press release saying it was not pursuing a power purchase agreement with Revolution Wind 2 because it would not satisfy a provision of the Affordable Clean Energy Security (ACES) law requiring the project “to reduce energy costs.”

“We recognize some will be disappointed that we didn’t choose to move forward on  offshore wind in Rhode Island,” said Dave Bonenberger, president of Rhode Island Energy. “In fact, we are already in discussions with state and regional leaders about new opportunities to bring more offshore wind to the state, which we hope to progress in the coming months.”

Bonenberger said in reaching its decision the utility weighed all factors.“The economic development benefits included in the proposal were weighted and valued appropriately by our evaluation team, but ultimately it was determined those features did not outweigh the affordability concerns and other ACES standards,” Bonenberger said.

The company did not go into detail on the pricing offered for Revolution Wind 2, but said in the next 60 days it would file a document with the Rhode Island Public Utilities Commission providing more details on its decision. State agencies and Revolution Wind 2’s owners will also have a chance to comment.

The ACES law refers to “commercially reasonable” projects as ultimately defined by the Public Utilities Commission. “The commission shall determine, based on the preponderance of the evidence, that the total energy security, reliability, environmental, and economic benefits to the state of Rhode Island and its ratepayers exceed the costs of such projects,” the law states.

BRUCE MOHL

 

 

FROM COMMONWEALTH

Tunnel traffic manageable: The state’s highway administrator says traffic has slowed with the closure of the Sumner Tunnel for repairs, but congestion has been “manageable” in part by focusing on keeping vehicles moving in and out of Logan International Airport. Jonathan Gulliver said more riders are taking the no-fare Blue Line, where passengers levels were up 17 percent on July 12. Read more.

Cannabis regulators slammed: The founder and CEO of a marijuana testing lab in Framingham says he has reached out to the Cannabis Control Commission on several occasions with fraud issues and public health concerns but instead of investigating those concerns the agency has responded by launching investigations of his company to silence him. Read more.

OPINION

Diversifying teacher workforce: Rosa Lopez-Whitehill and Betsy Preval say legislation creating an alternative licensing pathway is a partial solution for developing more diversity in the educator workforce. Read more.

 

FROM AROUND THE WEB

BEACON HILL

The Governor’s Council approved all seven of Gov. Maura Healey’s pardon recommendations. (State House News Service)

MUNICIPAL MATTERS

Boston City Councilor Kendra Lara pleads not guilty to charges related to a car crash last month and says she is focusing on representing her constituents. (WBUR)

Boston Herald columnist Joe Battenfeld says Mayor Michelle Wu is refusing to answer what the police did with her list of critics and protesters.

The Worcester City Council is pressing City Manager Eric Batista for an ordinance penalizing crisis pregnancy centers if they misrepresent themselves as pregnancy healthcare facilities, but Batista said he is holding off on First Amendment grounds and after warnings from the attorney general’s office. (GBH)

More and more small Berkshire County towns are having difficulty staffing town hall and government positions. (Berkshire Eagle)

HEALTH/HEALTH CARE

Mass General Brigham and the University of Massachusetts are making a $20 million investment in UMass Boston’s nursing program as part of an effort to create a workforce pipeline. (Dorchester Reporter)

Tufts Medicine is facing challenging times. (Boston Globe)

A recent DPH report on maternal morbidity finds instances of severe maternal morbidity almost doubled Massachusetts over nine years, particularly impacting women of color. (New Bedford Standard-Times)

WASHINGTON/NATIONAL/INTERNATIONAL

House Republicans blocked funding for an affordable housing development for LGBTQ+ seniors in Boston’s Hyde Park. (GBH)

Maine Gov. Janet Mills signs a bill into law that expands access to abortions later in pregnancies. (Associated Press)

BUSINESS/ECONOMY

Background actors in Western Massachusetts discuss participating in the SAG-AFTRA union strike and its impact on the local film industry. (MassLive)

EDUCATION

Wesleyan University is the latest school to end legacy admissions. (Associated Press)

ARTS/CULTURE

It’s being called “Barbenheimer” – the same-day release of the Barbie and Oppenheimer movies – and critic Sean Burns says both movies live up to the hype. (WBUR)

Worcester’s long-awaited downtown public art and performance space, announced in 2019 and anticipated in 2021 but delayed due to the pandemic, is finally open. (MassLive)

TRANSPORTATION

The MBTA can’t say for sure the last time it inspected fire suppression equipment that failed during a recent fire at Charles/MGH. (Boston Globe)

ENERGY/ENVIRONMENT

Environmental groups reach an agreement that will keep 5,500 acres spanning the border of Connecticut and Massachusetts undeveloped. (Connecticut Public Radio)

China is doubling down on coal to produce electricity. (New York Times)

Falmouth and Mashpee are slated for resiliency grants targeting areas most susceptible to the damaging effects of climate change. (Cape Cod Times)

CRIMINAL JUSTICE/COURTS

A 4-year-old boy died in a hit-and-run accident  in Boston on Tuesday night. (WBUR)

A Lawrence police captain and the city are being sued on charges of using excessive force in making an arrest. (Eagle-Tribune)