Massachusetts DPU Approves Offshore Wind Power Supply Contracts, Including PPAs for Avangrid’s Commonwealth Wind

January 4, 2023, by Adrijana Buljan

The Massachusetts Department of Public Utilities (DPU) wrapped up 2022 by issuing several new orders, among them also an order approving the power purchase agreements (PPAs) for Mayflower Wind and Commonwealth Wind projects, although Avangrid filed a motion to dismiss the proceedings for the latter in mid-December, with plans to re-apply at the upcoming state offshore wind solicitation.

Mayflower Wind backed Avangrid’s reasoning for wanting to back out of the PPAs, but said its Motion to Dismiss disrupted Section 83C procurement process
Electric distribution companies filed a letter urging the DPU to approve Avangrid’s PPAs

As reported over the past several months, Avangrid first asked for a one-month suspension of the proceedings at the DPU this summer, a couple of months after the state electric distribution companies (EDCs) Eversource, National Grid, and Unitil sent the signed PPAs for approval.

The contracts were signed for Avangrid’s 1.2 GW Commonwealth Wind and the second, 405 MW Mayflower Wind project, developed by a joint venture between Shell and Ocean Winds, which joined Avangrid’s request for pausing the approval proceedings to renegotiate the conditions of the PPAs amid the global economic crisis – both of which were later rejected by the DPU.

While, in response to the DPU’s order to either continue with the ongoing proceedings or request to dismiss them completely, both developers decided to resume under the current PPAs in November, Avangrid filed a Motion to Dismiss the following month.

In its motion, Avangrid stated that the PPAs do not meet the fundamental statutory threshold set forth in Section 83C(a), which requires that the PPAs “facilitate the financing of offshore wind generation”, in line with its initial remark that under these contracts its 1.2 GW project was no longer viable.

The company then announced it intended to participate in the state solicitation for offshore wind generation capacity that will be held in April. “With this step, a competitive process that accounts for the unprecedented changes will ensure that a clean energy project can be built to serve the Commonwealth’s energy needs”, Avangrid said.

Mayflower Wind, in an answer to the DPU following Avangrid’s motion to dismiss the proceedings for its PPAs, said that it agreed “with much of the factual analysis underlying Commonwealth Wind’s conclusion, especially as Mayflower is subject to these same facts, pressures and realities”.

Nevertheless, the Shell-Ocean Winds joint venture reiterated it was continuing with its project under the current PPAs and that would provide the DPU with a detailed third-party analysis on the impact of these “unforeseen events” on the financeability of its project as it committed earlier.

Mayflower Wind also noted in its response that Commonwealth Wind’s motion “materially disrupted the Section 83C procurement process” and requested time for discussion among all interested parties before the DPU makes a final decision on the Mayflower Wind PPAs.

The electric distribution companies also responded after Avangrid’s Motion to Dismiss, calling for the DPU to reject the motion and approve the existing PPAs.

“Commonwealth Wind negotiated and executed comprehensive Purchase Power Agreements with the Companies that are now before the Department for approval following a full and fair adjudicatory process. Approving the Motion to Dismiss at this very late stage would significantly undermine what to date has been a very successful process established in Massachusetts to encourage the development of offshore wind projects”, Eversource, National Grid, and Unitil said in their letter to the DPU on 23 December.

The Massachusetts DPU issued the order approving all PPAs in the proceedings, for both Commonwealth Wind and Mayflower Wind projects, on 30 December. The DPU has not (yet) issued a response to Avangrid’s Motion to Dismiss.

The DPU’s order approving the PPAs can be appealed to the Supreme Judicial Court by the filing a written petition with the Secretary of the Commission within twenty days after the date the decision.

Whether Avangrid will take this action for Commonwealth Wind or build and operate the 1.2 GW offshore wind farm under the current PPAs is yet to be seen.