At least three of the five offshore wind developers with leases off the coast of Massachusetts are likely to submit bids in the state’s next procurement, but it’s unclear whether that level of competition will be enough to act as a brake on price escalation.
Two of the developers, SouthCoast Wind and Vineyard Offshore, confirmed that they will be participating in the upcoming solicitation. Avangrid did not respond immediately to a query about its plans, but it has indicated in filings with state regulators and public comments its eagerness to bid in the next round.
Ørsted, a Danish company that last week said it was writing down the value of its US wind farm projects by $2.3 billion, declined to comment. Equinor, which has never bid on projects in Massachusetts, did not return phone calls.
Having more developers bidding in the state’s fourth procurement could help hold down prices at a time when inflationary pressures are raging through the industry and a state-imposed price cap that limited how much prices could rise has been lifted. Three companies bid in each of the state’s first two procurements, but only two bid in the last one.
SouthCoast Wind and CommonWealth Wind, owned by developers who are paying millions of dollars to terminate earlier contracts that became unfinanceable due to inflation, rising interest rates, supply chain disruptions, and the war in Ukraine, are eager to recover their costs. Vineyard Offshore is partnering with Avangrid on Vineyard Wind 1, the nation’s first commercial scale wind farm that is scheduled to start producing electricity later this year. The other two wind farm developers with lease areas off the coast of Massachusetts are facing pricing challenges elsewhere along the East Coast and may be reticent to bid in Massachusetts.
Sen. Michael Barrett of Lexington, the Senate chair of the Legislature’s Telecommunications, Utilities, and Energy Committee, said he is concerned that sharply higher prices for offshore wind power could stall the state’s decarbonization effort, which is reliant on using clean electricity to displace fossil fuels in the transportation and heating sectors.
“Competition means more than the number of developers bidding,” he said in a phone interview. “It means objective reliable evidence that developers are still bent on economizing and on giving New England consumers affordable rates. I want to see us move to high, high proportions of clean energy, but the long game here requires electricity prices that the public will accept. You don’t want to ignite a backlash against the entire climate policy project.”
This past July, Rhode Island’s leading utility refused to move forward with an offshore wind procurement because the lone bid was too high. New York offshore wind developers are also seeking big increases in previously approved contracts to make the numbers work.
As a result of market pressures on the offshore wind industry, all bids are expected to be priced higher than they were during the last procurement. However, there is also fear that developers will take advantage of the market conditions to make exaggerated adjustments to the price. Barrett said regulators must say no to exorbitant bids.
“I expect to be disappointed by these bids whether there are two respondents or five,” Barrett said. “It’s not a great position to be in, but you have to play the cards you’re dealt and you have to find a way to regain leverage even in an unfavorable negotiating climate. And the leverage here is giving life to the ‘no’ option.”
In-depth: As students return to college campuses, another facet of the region’s housing crunch comes into sharp relief, as students vie for off-campus rental housing. Boston estimates students account for 13 percent of its entire rental population, making them a significant market force.
– More housing is the answer to the housing crunch, but the difficulty in dealing with the student housing issue is compounded by a paucity of data on the problem. Most communities gather student housing data on housing in their own communities, which makes regional planning next to impossible. Read more.
One’s thriving, one’s not: Doug Pizzi and Michele Hanss of Mass. Parks for All explore the different circumstances of the public (Department of Conservation and Recreation) and private (The Trustees of Reservations) creations of famed architect Charles Eliot. Read more.
Trump shouldn’t be able to run: Mark Brodin of Boston College Law School says Donald Trump’s insurrection should disqualify him for office under a provision of the Constitution targeting Confederate soldiers. Read more.
FROM AROUND THE WEB
Mayor Michelle Wu said the city and the Boston firefighters union have reached a tentative agreement on a new contract. A source tells the Boston Herald it includes a 12 percent pay raise over three years. It was a literal back-room deal, the Dorchester Reporter reports, with the agreement reached at 10 p.m. Sunday, in the back room of the Brendan Behan Pub in Jamaica Plain.
First lady Jill Biden tested positive for COVID, but is so far experiencing only mild symptoms. President Biden so far has tested negative. (New York Times)
The steering committee of Jamaica Plain Progressives voted to endorse embattled district City Councilor Kendra Lara despite her recent car crash and the litany of charges against her in connection with it. (Boston Herald)
Revere’s all white, mostly male city council may get more diverse in the upcoming elections. (MassLive)
Tuesday is preliminary election day for Worcester’s city council and school committee, with more candidates seeking to fill district seats than at-large seats. Several new district seats were created as part of a consent decree, after the previous system was challenged as discriminatory. (Worcester Telegram)
Changes and clarification to the rules governing community host agreements with cannabis businesses could lead to revisited contracts and the return of some previously paid fees. (Worcester Telegram)
Lots of Berkshire County pork farmers are fine with the new state law imposing more humane requirements on pig enclosures because they say they already follow those practices but will now benefit from higher pork prices resulting from the law. (Berkshire Eagle)
Though free universal school meals are now the law of the Commonwealth, a few quirks of the policy could lead to unexpected charges. (MassLive)
Brockton Public Schools Superintendent Mike Thomas said he takes full responsibility for a $14.4 million deficit in last year’s school budget, but says there was no embezzlement or missing money. (The Enterprise)
An ancient Roman bronze bust believed to have been stolen is seized from the Worcester Art Museum by New York authorities. (Associated Press)
The Northeast mostly dodged the scorching heat waves that blanketed most of the country this summer, but September could be another matter. (Cape Cod Times)
One year into his tenure, Boston Police Commissioner Michael Cox is seen as a thoughtful, steady hand in charge of the department, but many are looking for him to be more visible and offer a clearer agenda. (Boston Globe)
Essex County Sheriff Kevin Coppinger has been named as a defendant in a civil lawsuit filed by a man who alleges he ignored his duty to intervene as an off-duty law enforcement official when he witnessed a fight in which the plaintiff, Paul Halas, Jr., alleges he was severely beaten by Coppinger’s son. (Eagle Tribune)
One person is dead after a second shooting in Lynn in less than a week. (Daily Item)
Dan Kennedy takes stock of the role public notices play in the revenue mix for local news operations – and the potential for their use to be weaponized by public officials in charge of their placement. (Media Nation)