THE DEPARTMENT OF PUBLIC UTILITIES was very clear a week ago, telling the state’s two leading offshore wind developers that they could either move forward with the pricing contracts they negotiated with the state’s utilities or withdraw from the proceedings and start over again.
Mayflower Wind quickly responded that it would honor the terms of its contract but also said it would seek to inform all parties of the cost challenges wind farm developers are facing because of the war in Ukraine, interest rate hikes, inflation, and supply chain disruptions.
Avangrid, the developer of the 1,200-megawatt Commonwealth Wind project, asked for more time to respond and then waited until the very last minute on Monday before filing a response that largely ignored the DPU’s order.
Instead, the company returned to its original plea – that the DPU extend the contract approval process for a month to give the parties a chance to review the unstable economic conditions and negotiate pricing changes to its contract.
“If the department does not support a pause in these proceedings, as previously requested by Commonwealth Wind, then the appropriate action is for the department to continue with this proceeding such that the parties can continue ongoing discussions to employ all opportunities, including contract improvements, to achieve a financeable and economically viable project,” Avangrid said in its filing.
Sy Oytan, senior vice president for offshore projects, issued a statement saying the company has been very clear that contract adjustments are needed to make the wind farm viable.
“Avangrid believes there is a path forward for this project,” Oyrtan said. “Ensuring Commonwealth Wind is able to move forward is squarely in the public interest and the best possible outcome for Massachusetts and its ratepayers, and we look forward to continued engagement so this project can deliver on its immense economic and environmental benefits and help the state achieve its ambitious 2030 climate target.”
It’s unclear how the DPU will respond, but agreeing to Avangrid’s demands would represent an about-face for the agency. In its order a week ago, the agency was critical of the wind farm developers, particularly Avangrid, for raising their concerns about the adequacy of the price they would receive for electricity so late in the contract approval process.
“Whatever its reasons, Commonwealth Wind waited until after the filing of initial briefs [on October 20] in these proceedings to come forward. Of course, a party will be held to the predictable consequences of its strategic choices, regardless of outcome,” the DPU order said.
If Commonwealth Wind is forced to start the contract approval process over again, it could be months before a new contract comes before the DPU. In the grand scheme of things, a couple months is no big deal, but the Commonwealth Wind project is currently scheduled to come online at some point in 2028, shortly before 2030 emission targets kick in.
The state’s utilities, which negotiated the original contracts with the wind farm developers, refused entreaties to renegotiate them. The Baker administration on Monday morning urged Avangrid to accept the original terms of its contract and work with federal and state officials to find tax credits and other forms of governmental relief that could help make the project affordable.
Maura Healey, the state’s attorney general and governor-elect, has been largely silent on the specifics of what should be done. Her office issued a statement Monday night that didn’t recommend a particular course of action for the DPU but did indicate the AG’s staff is reviewing the financials of Commonwealth Wind.