The Department of Public Utilities on Friday approved the contracts between both the Commonwealth Wind and Mayflower Wind offshore wind projects and Bay State utilities, rejecting Commonwealth Wind’s request to scrap an agreement that it says would not allow its project to be financed and built, the State House News Service (SHNS) reported.
As The Times reported last week, Commonwealth Wind was seeking to have the power purchase agreements tossed out, saying the contracts “do not meet the fundamental statutory threshold that they must ‘facilitate the financing of offshore wind energy generation.’”
The DPU determined that the contracts, which the wind developers and utility companies agreed to in May, “are in the public interest,” but both developers have said that increases in commodity prices, rising interest rates, and supply shortages make their projects much harder to finance than a year ago, when they were selected to provide a combined 1,600 megawatts of offshore wind power, the SHNS reported.
In a statement Friday issued to the news service, spokesman Craig Gilvarg said Avangrid is disappointed in DPU’s order approving the contracts, and “continues to review the department’s decision while assessing its legal options.”
“Avangrid has been clear and transparent, in evidence submitted to the department, that because of the aggregate impact of unprecedented global economic headwinds, including historic inflation, sharp increases in interest rates, and supply chain bottlenecks, the current Power Purchase Agreements do not allow the company to secure the significant financing needed to construct this critical project, and thus the project cannot proceed under these contracts,” Gilvarg said.
According to the Commonwealth Wind website, it is an offshore wind project owned by Avangrid, planned to be built in waters 22 miles south of Martha’s Vineyard, that would deliver “1,232MW of clean and affordable energy.”
