An Eversource Energy executive told investors May 7 that due to travel and meeting restrictions stemming from the coronavirus pandemic and other delays, it is very unlikely the 130-MW South Fork Wind Farm offshore project will enter commercial operations by the end of 2022 as previously expected.
However, despite some near-term scheduling headwinds, Eversource remains "firmly convinced" that the opportunities in offshore wind off the Northeast U.S. coast are excellent, with 15,000 MW likely to be built over the coming years to supply the significant clean energy needs of New England and New York, Senior Vice President and CFO Phil Lembo said during a first-quarter 2020 earnings conference call.
"Our partnership with Ørsted A/S has won more than 1,700 MW of offshore wind contracts across the region," Lembo said, adding that Eversource continues to view offshore wind initiatives as a "unique and very positive opportunity" to provide clean energy and significant economic development stimulus to the region while providing investors with a "very attractive long-term earnings and cash flow benefit."
In its own first-quarter 2020 earnings call April 29, Ørsted said it expected the South Fork project, off of New York, and another offshore wind project in Maryland would likely be delayed.
Eversource filed its construction and operations plan March 13 with the U.S. Bureau of Ocean Energy Management, or BOEM, for the 704-MW Revolution Wind Offshore project, also co-owned with Ørsted. The output of that project is split, with 400 MW contracted to serve Rhode Island and 304 MW for Connecticut.
The company expects to have a full schedule for BOEM's review of Revolution later this year, Lembo said.
Eversource has not yet received a schedule from BOEM for review of the South Fork project, which would serve Long Island, N.Y. The construction plan was filed in 2018, but the process was paused in 2019 to update it with a 1-nautical-mile by 1-nautical-mile turbine spacing configuration, and Eversource expects a new schedule by midyear, Lembo said.
Eversource is negotiating an agreement to increase the South Fork project's original capacity of 90 MW to 130 MW, which needs New York comptroller and attorney general approval, according to the company's earnings presentation.
Additionally, coronavirus pandemic-related delays led the administrative law judge overseeing the New York Public Service Commission review of South Fork to extend the near-term schedule, adding another 10 weeks until the state hearings can begin, Lembo said.
Intervenor testimony will be due in early August and hearings will commence at the end of September, making year-end 2022 project completion "very unlikely," he said.
Eversource also plans to file its construction plan with BOEM during the second quarter for the 880-MW Sunrise Wind Offshore Farm project that would also serve the Long Island area. That timetable may be impacted by New York 's current restrictions on onshore and offshore survey work, and the company will have more information on the timing of that filing and the schedule for Sunrise by late summer, Lembo said.
Sunrise Wind is also a 50/50 joint venture with Ørsted. It is expected to be in service by the end of 2024, according Eversource's earnings presentation, a year after Revolution Wind.
The contract prices for South Fork are roughly $160.33/MWh for the 90-MW size and about $86.25/MWh for the 40-MW size, both with average annual escalators of 2%, according to the presentation.
The contract price for Revolution Wind is $98.43/MWh for Rhode Island with no escalator, while the Connecticut price has not been disclosed. The contract price for Sunrise Wind is $110.37/MWh with no escalator.
Eversource reported first-quarter 2020 earnings of $334.8 million, or $1.01 per share, compared with earnings of $308.7 million, or 97 cents per share, in the first quarter of 2019.
Jared Anderson is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.