Environment

Offshore wind project commits to contracts after rebuke from state

Mayflower Wind previously supported a request from another wind project that claimed its plan was not viable under previously agreed-upon contracts.

Wind turbines stand in the water off Block Island, R.I. Michael Dwyer/Associated Press

November 7, 2022

2 minutes to read

One of the largest offshore wind projects planned for Massachusetts, Mayflower Wind, told the state Monday that it would move forward with its plans despite backing a request from another wind project last month that claimed its plan was not viable under previously agreed-upon contracts.

Commonwealth Wind, a project chosen last year alongside Mayflower to boost the state’s clean energy portfolio, told the Department of Public Utilities in late October that its plans were not viable under existing contracts with the state’s utility companies. Commonwealth asked state regulators for a month-long pause of its review of these contracts so that they could be retooled to better handle supply chain issues, State House News Service reported. Mayflower had previously told the state that it supported Commonwealth’s request.

When asking for the review, Commonwealth said that price increases, supply shortages, and interest rate hikes all combined to change the project’s financial outlook since the contracts were agreed upon.

Mayflower’s Monday commitment comes after the DPU issued an order Friday that denied Commonwealth’s request, and gave the two offshore wind projects three business days to announce whether or not they will hold to their contracts.

The state appeared to rebuke Commonwealth for its late determination that the contracts (called power purchase agreements, or PPAs) were not adequate.

“While the Department will not speculate as to when Commonwealth Wind first determined its Project was no longer viable under the terms of the PPAs, it is evident that the economic impacts of the COVID-19 pandemic and war in Ukraine on its Project became apparent some time before Commonwealth Wind notified the Department,” the DPU order said.

Mayflower said in a filing with the DPU Monday that it was withdrawing support for Commonwealth’s request, but that it will share an outside analysis of “challenges to financeability, with the goal of finding solutions that provide value to the rate payers,” to the state and utility companies in the future.

Mayflower Wind plans to provide 1,200 megawatts to Massachusetts customers by 2028. Commonwealth also plans to provide 1,200 megawatts, or enough energy to power 750,000 homes, to customers in the state, The Boston Globe reported.

“Mayflower Wind is committed to meeting its contractual obligations to supply clean offshore wind power to the people of Massachusetts,” CEO Francis Slingsby said, according to State House News Service. “We are proud of our role in meeting critical economic, climate and energy security needs and believe that working together with the utility companies and the Commonwealth we can collaboratively and successfully address and overcome the current extraordinary economic challenges.”