BOSTON —While the offshore wind industry waits for Gov. Charlie Baker to act on the budget sent to him last week, an industry group is urging his administration to telegraph how it will handle the proposed temporary suspension of a price cap on wind projects.
RENEW Northeast, a non-profit committed to uniting the renewable energy industry and environmental advocates, said the Department of Public Utilities should explain how it will address that part of the budget as soon as possible, given the “tight upcoming deadline for bid submissions” for a second 800 megawatts of offshore wind power.
“The language adopted by the General Court provides significant uncertainty for developers on how the price cap issue will be resolved and creates additional ambiguity about the interaction between the price cap and mitigation proposals that developers might submit,” the group said in a statement. “Clarity and certainty are essential ingredients in creating a stable and encouraging climate for offshore wind development.”
The price cap, put in place by the 2016 energy law, restricts the price of power from new procurements to no higher than the price of the previous contract. The budget language before Baker would allow his administration to lift that cap for a year.
Secretary for Energy and Environmental Affairs Kathleen Theoharides told Sen. Marc Pacheco at a committee hearing last week that the administration is reviewing that provision of the budget with the goal of making sure the timeline for the next procurement is not disrupted.
“Our goal here is to make sure we stay on timeline, that the language is clear enough that it is able to be interpreted and keep to that timeline to make sure this second RFP can take advantage of the 12 percent [investment tax credit]. I think we will take a careful look at the language and make sure we are balancing those needs,” she said.
Massachusetts has already entered into a contract for 800 megawatts of offshore wind power – through the Vineyard Wind project, which could face delays if a key federal certificate is not issued by the end of August – and has set deadlines on Aug. 9 and Aug. 16 for developers to submit their bids for a second 800 megawatt procurement.
Before the Senate voted on the budget Monday, Sen. Marc Pacheco aired his concerns with the price cap suspension, though he said he shares some of the worries that, if the price cap remains in place as written in 2016, developers could be cool to participate in the second Massachusetts procurement. Pacheco urged Baker to return the budget language with an amendment.
“The language that is being proposed is going way above what we should be doing. Way beyond what we should be doing,” Pacheco said. He added, “the language before us right now, will absolutely guarantee a significant rate increase. I know some will say you can’t say that, you don’t know that is happening. Well, I’m willing to say that is happening.”
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