State PSC rejects offshore wind farm developers’ requests for more subsidies
The PSC, in a unanimous 7-0 vote, rejected the request, citing the cost to consumers and the impact of possibly “corrupting” the integrity of the state’s bidding process.
Credit: By Yancey Roy | October 12, 2023 | newsday.com ~~
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Continuing a trend among Northeast states, New York said “no” Thursday to requests from offshore wind farm developers to rewrite contracts to allow them to charge more money for supplying power to the state’s grid.
In doing so, the state followed Connecticut and Massachusetts in rebuffing attempts by wind power companies to renegotiate in the wake of inflation, supply-chain bottlenecks and other economic turbulence hitting the industry.
Equinor and Orsted, two Scandinavian wind giants, had asked the state Public Service Commission to increase how much they could charge utilities for power generated by several projects in development but not yet built off Long Island’s shores.
The companies argued that rates were set in contracts awarded before the COVID-19 pandemic and now should be adjusted to account for inflation, rising interest rates and other related costs.
The requests varied for each would-be wind farm but ranged from 27% to 66% for the per-megawatt-hour wind companies could charge.
The PSC, in a unanimous 7-0 vote, rejected the request, citing the cost to consumers and the impact of possibly “corrupting” the integrity of the state’s bidding process.
The commission said the companies combined were asking for a $12 billion economic boost, an amount Commissioner Diane Burman called “jaw dropping” and Commissioner Tracey Edwards termed “just not doable.”
In Connecticut, a similar rejection led to the cancellation – for now – of what was to be the state’s largest offshore wind development. On Thursday, New York commissioners, apparently girding against possible blame, made repeated efforts to stress they weren’t canceling any contracts and any such decision would be up to developers.
A spokeswoman for Equinor, which has three wind projects in the works, said the company was disappointed and still is assessing the impact of the PSC decision.
An Orsted spokeswoman said the viability of “Sunrise Wind,” the company’s project planned off Brookhaven, would be “extremely challenged” without the rate hike adjustment.
“We will evaluate our next steps and communicate the status of the project as soon as possible,” Meaghan Wims said.
Update, February 29, 2024: The Sunrise Wind and Empire Wind 1 projects were awarded new contracts by New York, at $150.15 per MWh, an increase from their original contracts for, respectively $110.37 and $118.38.
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