THE HEALEY ADMINISTRATION on Thursday said it is delaying the state’s next procurement of offshore wind by nearly two months to allow more time for the Internal Revenue Service to provide guidance on the availability of new tax credits.
The delay pushes back the deadline for submission of bids from January 31 until March 27. More importantly, the two-month delay means final approval of the next offshore wind deals may not come until the end of 2024 or early 2025. Offshore wind farms can take years to build, which is a key consideration as state climate change targets are looming in 2030.
Connecticut and Rhode Island, which are participating with Massachusetts in a joint procurement, also pushed back their deadlines. All three states have been pressing the IRS to move quickly, given expectations that bids for electricity could come in at high prices because of economic uncertainty in the emerging industry.
“We know the importance of capturing all available savings for Massachusetts customers, and federal tax credits are essential to lowering the price of offshore wind for our ratepayers and improving project viability for offshore wind developers,” said Lauren Diggin, a spokeswoman for the Department of Energy Resources.
Rep. Jeffrey Roy of Franklin, the House’s lead lawmaker on energy issues, said the delay was unwise. “At a time when we should be accelerating our clean energy transition, as at least one neighboring state has done, the Healey administration’s decision to delay the deadline for the next round of offshore wind bids puts us further away from meeting our aggressive climate goals,” he said. “Every day, week, and month matters in this transition, particularly as we head into a presidential election in which the future of offshore wind may hang in the balance.”
Roy’s Senate counterpart, Sen. Michael Barrett of Lexington, took the opposite position. “I like what they’re doing,” he said, adding that waiting another 60 days may allow wind farm developers to better leverage federal tax credits and possibly benefit if the Federal Reserve Bank begins ratcheting back interest rates.
In her State of the Commonwealth speech Wednesday evening, Healey said dealing with climate change was one of her top priorities and one of the state’s most pressing needs. She said the upcoming procurement will review new proposals for wind power that could provide up to 25 percent of the states electricity needs.
In early discussions about the current procurement, Attorney General Andrea Campbell’s office urged the Healey administration not to bundle too many wind farms into one procurement at a time when interest rates, inflation, and supply chain problems are all driving up costs.