Massachusetts ratepayers should now expect to see the effects of offshore wind in their energy bills.
Gov. Maura Healey announced Monday that the contract price for energy from the Vineyard Wind 1 offshore wind farm, 15 miles south of the Island, is now active.
The contract activation guarantees stable and affordable energy prices, a press release from Healey’s office said. Previously, any energy from the offshore wind farm was sold on the open market and was subject to volatility from fluctuations in supply and demand, and prices were particularly high this past winter because of extreme cold and severe weather.
The price negotiated in the power purchase agreement contracts are expected to save Massachusetts ratepayers an average of 1.4 cents per kilowatt-hour, the release states, because the energy is provided at fixed prices.
The contract price between the utilities, National Grid USA, Eversource Energy, and Unitil Corp., and Vineyard Wind is $69.50 per megawatt-hour. The average day-ahead energy prices for Southeast Massachusetts were $135.18 per megawatt-hour, $180.76, and $127.13 for this past December, January, and February, respectively.
The state Department of Public Utilities approved the 20-year contracts for 800 megawatts of offshore wind from this project in 2019. The release said ratepayers can collectively save $1.4 billion over the life of the contracts.
“The activation of Vineyard Wind 1’s power purchase agreements marks an important milestone for Massachusetts electricity customers and the New England grid,” Craig Gilvarg, spokesperson for Vineyard Wind said. “The project is delivering reliable energy at stable, affordable prices and is projected to save ratepayers billions in the decades ahead. At a moment when the region needs it most, Vineyard Wind is adding significant new energy and strengthening the long-term security of the New England grid.”
It is not confirmed that every turbine is commissioned or that the project reached full “commercial operation,” which is when the technology is fully tested and actively generates revenue. As of Thursday, April 16, 55 out of the 62 turbines were able to generate power, an attorney for GE Vernova, a central contractor of the project which installs and commissions the turbines, said. That was not all at full capacity, the attorney added.
This milestone comes a day before GE Vernova had planned to walk out on the project over alleged withheld payments by the offshore wind developer worth more than $300 million. The matter was taken to court, and a judge granted officials at Vineyard Wind a preliminary injunction and temporary restraining order. This means GE Vernova can’t terminate, at least for now, a contract that guarantees the company provides service and maintenance to the project’s 62 turbines over the next five years.