A LONG-BREWING fight over state energy policy moved into the spotlight on Tuesday as key players laid out their positions in what promises to be an interesting debate over the best way to propel the state’s offshore wind industry into the future.
The starting point is a bill filed by Gov. Charlie Baker that would steer $750 million in American Rescue Plan Act money into a fund that would invest in new energy technologies, train a new energy workforce, and change the way offshore wind procurements are run in the future.
Key provisions in the bill would transfer control of the procurement process from the state’s three private utilities to the Department of Energy Resources and eliminate the so-called price cap, which requires each successive procurement to come in at a lower price than the previous one.
On Monday evening, a day before Baker’s bill was scheduled for a hearing before the Legislature’s Telecommunication, Utilities, and Energy Committee, the Senate cochair of the panel publicly released a letter he sent to Baker objecting to the elimination of the price cap.
Sen. Michael Barrett of Lexington has outlined his position previously — that reaching the state’s emission goals hinges on electrification of transportation and heating and low electricity prices make that task possible — but the footnoted letter dived into the details.
Barrett said the state’s procurements have attracted respectable onshore economic development — including the promise of a transmission cable factory at Brayton Point in Somerset — while keeping the price of offshore wind electricity well below the price in every other state. He noted Massachusetts prices have been 43 percent, 68 percent, and 100 percent less than similar deals in New York, Connecticut, and New Jersey, respectively.
Removing the cap, Barrett said, would put Massachusetts at the mercy of a handful of offshore wind companies that he described as an oligopoly. “We can’t count on competition to substitute for a price cap,” he said.
Baker offered little in response, promising to respond in writing. Kathleen Theoharides, his secretary of energy and environmental affairs, offered slightly more. She said the other states required local content in their deals, trading a slightly higher price for the jobs and economic activity caused by onshore investments.
Theoharides said price would still be driving the negotiations in Massachusetts, but without the price cap there would be some room to push for more onshore investment. “We’re looking at the big picture,” she said.
New Bedford Mayor Jon Mitchell praised Baker for finally coming around to eliminating the price cap, but he warned that Massachusetts is already late to the game. He said nearly all onshore investment has gone to other states so far and Massachusetts needs to be aggressive in pursuing what’s left. He also dismissed Barrett’s warnings about sky-high prices. “Lifting the price cap is not going to result in a price spike,” he said.
Just when the debate was starting to heat up, Rep. Jeffrey Roy of Franklin, the House chair of the committee, took it in a different direction. He said a bill he had drafted would be up for a vote following the committee hearing with a final tally due by end of day Wednesday. He promised that if you like the governor’s bill, you will love his bill.
The bill itself was not released publicly, but Roy appears to be pushing for a steady revenue stream for his energy fund and elimination of the price cap.
Roy’s bill, which he drafted on orders from House Speaker Ron Mariano, puts the two committee chairs, and likely the two legislative branches, on a collision course over a fairly arcane policy.
“It’s delightful that we have the opportunity to have this back and forth,” Roy said at Tuesday’s hearing. “I would suggest to you that this back and forth will continue because we are going to poll an offshore wind bill this afternoon as soon as this hearing concludes and that will keep the discussion going. The House will have a view, the Senate will have a view, and I know that this has been a priority of Speaker Mariano.”
When it comes to the price cap, Baker currently is on the House side, but he indicated before he left the hearing that he might be flexible. “In the end, we play by the rule book you pass,” he said.