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Baker makes few changes in offshore wind RFP
Credit: Bruce Mohl | CommonWealth Magazine | Mar 28, 2019 | commonwealthmagazine.org ~~
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The Baker administration on Thursday unveiled the request for proposals it wants to use on its next offshore wind solicitation, which hews pretty closely to the terms of the previous one to avoid regulatory delays that could prevent the winning developer from taking advantage of a federal tax credit that expires at the end of the year.
Officials said the first priority is to secure approval from the Department of Public Utilities for the RFP, then ask for company responses by August, and award the contract or contracts in November – allowing just enough time to take advantage of the 12 percent federal investment tax credit that expires at the end of 2019.
The Baker administration did not make changes sought by officials representing southeastern Massachusetts, who complained the RFP two years ago shortchanged onshore economic investment. That proposal based 75 percent of a developer’s bid score on price and 25 percent on five other factors, including economic development.
In a letter dated February 26, nearly 50 officials from southeastern Massachusetts pointed out that the winning bidder of the last contract, Vineyard Wind, agreed to a price of 6.5 cents a kilowatt hour in 2017 dollars and a $12 million commitment for infrastructure and training. By contrast, winning bidders in Rhode Island and Connecticut procurements set their prices slightly higher but agreed to $40 million and $32 million in onshore investments.
The southeastern Massachusetts officials, led by New Bedford Mayor Jon Mitchell, asked that the contract language be changed to base 75 percent of a developer’s score on price, 15 percent on economic development, and 10 percent on the other four factors. The Baker administration kept the percentages the same, but listed economic development first among the five factors other than price.
Rep. Patricia Haddad, a high-ranking House official who represents Somerset, has filed legislation to do away with a requirement that each successive contract award come in at a lower price. Haddad fears the insistence on a lower price will squeeze developers so much that they will make fewer investments in the development of an onshore supply chain for the wind farms. Baker has made no move to change the law.
While the Baker administration oversees the offshore wind procurement process, the bids are judged and the contracts negotiated by the state’s three utilities – Eversource, National Grid, and Unitil.
Like the last RFP process, the state will consider bids of 200, 400, and 800 megawatts. There were three bidders last time, and two of them, Ørsted and Deepwater Wind, subsequently merged. Four bidders are expected this time, including Vineyard Wind; Ørsted; Mayflower Wind Energy, a joint venture of EDP Renewables and Shell Oil; and Equinor.
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