Massachusetts' three investor-owned electric utilities are preparing to issue a solicitation for 800 MW of offshore wind generation after state regulators gave them the green light.
In a May 17 order, Massachusetts' Department of Public Utilities, or DPU, approved a petition from the local subsidiaries of Eversource Energy, National Grid PLC and Unitil Corp. to issue a request for proposals, or RFP, for a total of 800 MW of offshore wind generation with a commercial operating date of 2024. This will be is the second such solicitation authorized since a 2016 state law directed utilities to procure 1,600 MW of offshore wind.
Among those that submitted comments to the utilities' petition are all four offshore wind developers with leases in nearby federal waters: Vineyard Wind LLC, which won the first contract in May 2018 with its 800-MW Vineyard Offshore Wind Project; Bay State Wind LLC; Mayflower Wind Energy LLC; and Equinor Wind US LLC.
In this second solicitation, the utilities asked to procure at least 400 MW of offshore wind but said they will consider bids from 200 MW to 800 MW, depending on what benefits the larger-scaled proposals would bring to ratepayers. The utilities also sought a nominal levelized price of less than $84.23 per MWh, as a result of a state law that requires each subsequent round of the offshore wind RFP to deliver prices lower than the first round of contracts.
Fearing a shift in the state's regulatory policies, National Grid's National Grid USA had also requested a "regulatory out" in the form of an exit clause in its future power purchase agreement with an offshore wind developer if a future state law or regulation attempts to stop the utility from passing the contract's costs onto ratepayers.
The DPU denied that request, saying that it would have placed the full risk of regulatory shifts onto project developers, making financing more difficult and expensive and potentially causing bidders to raise their bid prices or refrain from bidding altogether.
The DPU accepted the utilities' proposed timetable, which calls for an Aug. 9 deadline for confidential proposal submissions followed by an Aug. 16 due date for public proposal submissions. The utilities plan to select winning projects on Nov. 8, in time to negotiate and execute contracts by Dec. 13 and submit those contracts to the DPU for regulatory approval on Jan. 10, 2020.
Vineyard Wind is a joint venture between Denmark-based Copenhagen Infrastructure Partners K/S and Connecticut utility Avangrid Inc.'s Avangrid Renewables LLC subsidiary. The majority stakeholder of Avangrid is Spain-based Iberdrola SA. Bay State Wind is a joint venture between Denmark's partially state-owned Ørsted A/S and Eversource. Mayflower Wind is a joint venture between Shell New Energies US LLC — itself a subsidiary of Netherlands-based Royal Dutch Shell PLC — and EDPR Offshore North America LLC, a subsidiary of Portugal-based EDP - Energias de Portugal SA. Equinor Wind US is a subsidiary of Norway-based Equinor ASA.