October 4, 2023
Connecticut

Avangrid pulls contract for offshore Park City wind power project

Luther Turmelle | Oct. 3, 2023 | ctinsider.com

Orange-based Avangrid, which is a subsidiary of Spain’s energy giant Iberdrola, is pulling out of its contract to provide electricity to Connecticut via the Park City Wind project.

Company officials said late Monday that Avangrid has agreed, along with Eversource Energy and The United Illuminating Co., to “terminate the purchase power agreements” with the two Connecticut electric distribution utilities. Avangrid is the corporate parent of Orange-based United Illuminating.

The project called for providing 804-megawatts of power to Connecticut homes and businesses via the power purchase contracts. The project is still going through the permitting process.

This “will allow all parties an opportunity to pursue an expedient path forward,” company officials said in a written statement. “One year ago, Avangrid was the first offshore wind developer in the United States to make public the unprecedented economic head winds facing the industry including record inflation, supply chain disruptions, and sharp interest rate hikes, the aggregate impact of which rendered the Park City Wind project unfinanceable under its existing contracts. Since that time, Avangrid has been transparent and collaborative, working diligently with state and federal officials and stakeholders to find solutions to the economic challenges facing Park City Wind as we continued to advance the permitting and development of the project.”

Tricia Modifica, an Eversource spokeswoman, said Avangrid officials “asked Eversource to terminate the offshore wind contract because the developer cannot secure financing.”

“We complied with that request by entering into a Termination Agreement which is now filed for PURA approval,” Modifica said.

Avangrid’s decision to terminate the contracts must still be approved by the Connecticut Public Utilities Regulatory Authority, or PURA, according to Katie Dykes, commissioner of the state Department of Energy and Environmental Protection. If it is approved, the company’s contract with the state calls for Avangrid to pay a financial penalty of over $16 million, Dykes said, during a phone interview from Boston where she was attending a wind power conference.

Dykes called Avangrid’s decision “disappointing.”

“Over the last several months, DEEP engaged Avangrid, and industry experts, to understand concerns about the economics of Park City Wind and the significant near-term challenges facing offshore wind projects in general,” she said. “We hoped to hear proposed solutions to enable the Park City Wind project to move forward while protecting Connecticut’s ratepayers and respecting our state’s commitment, embodied in statute, to conduct competitive procurements. Unfortunately, these discussions failed to materialize in a proposal that met these goals.”

Connecticut Gov. Ned Lamont said that when state officials selected Park City Wind in 2020 through a competitive bidding process, “our expectation was to bring affordable, clean, reliable power to Connecticut ratepayers.”

“Offshore wind remains a critical resource to meet state, regional, and federal clean energy goals and help maintain reliable operations in the wintertime while creating thousands of good-paying jobs,” Lamont said in a written statement. “That is why I recently joined other Atlantic state governors in urging the Biden Administration for federal action to address concerns about rising costs for offshore wind.”

Changing economics and supply chain problems have put the future of many wind power projects offshore of the east coast of the United States in limbo.

Avangrid’s announcement came the same day as Massachusetts utility regulators approved the termination of an agreement between three electric utilities in that state and the developers of the SouthCoast Wind Project.

If Connecticut utility regulators approve Avangrid’s contract termination, company officials said they expect to rebid the project under new proposed terms.

The project is viewed as critical by many because it was going to help move Connecticut toward achieving its clean energy goals.

URL to article:  https://www.wind-watch.org/news/2023/10/04/avangrid-pulls-contract-for-offshore-park-city-wind-power-project/