National Grid, meanwhile, gave a big thumbs up to Tepper’s letter. And Ørsted announced a $366 million write-down for the value of one of those ventures in New York, citing several of the issues Avangrid faces. Analysts peppered Eversource boss Joe Nolan with questions on an earnings call last month about why the sale process has dragged on. But Eversource has similar headaches: The company has been trying to sell its stake in offshore wind partnerships with Danish energy company Ørsted, and it’s taking much longer than expected. (Connecticut-based Avangrid is a public company and the Mayflower/SouthCoast venture is not.)Įversource also declined to comment about the Commonwealth Wind situation, citing negotiations with Avangrid. But it has not been anywhere near as vocal with concerns, and it declined to comment about Tepper’s letter. The fate of the state’s third offshore wind farm remains an open question: Mayflower/SouthCoast faces many of the same financial hardships as Avangrid. In response, Avangrid issued a comment saying the company remains committed to reaching the state’s climate goals, but because of price increases outside of its control, the best option for Commonwealth Wind is to terminate the contracts and try again in round four.Ĭonstruction has started on Vineyard Wind, Avangrid’s joint venture with Copenhagen Infrastructure Partners, and most of its costs were set a while ago. The Healey administration just accepted comments for how to proceed with round four, but Tepper assured Azagra that the “experience of the bidder will be evaluated in the selection process.” She reminded Azagra that bidders for these long-term contracts must assume some risk, and that electric ratepayers should not be the ones who absorb higher costs if economic conditions change. It was that update that prompted Tepper to fire off her letter, accusing Azagra and his company of misrepresenting “the status of those contracts in a matter that is material.” That’s about as blunt as legalese can get. The new administration tried to bring Avangrid and the utilities together to discuss their options, apparently to no avail. Tepper’s boss, newly elected Governor Maura Healey, inherited this mess when she took office in January both Tepper and Healey had followed the saga closely in their previous roles in the attorney general’s office. The company would resubmit, at higher prices, in round four. So Avangrid eventually chose to terminate the contracts. A deal is a deal, after all, and opening up these long-term contracts could establish a bad precedent, or even legal liability if a rival decided to sue. (It’s now well over $5 billion.) Lining up financing suddenly seemed next to impossible - unless the utilities agreed to pay more. The price tag had skyrocketed from a previous $4 billion. Projects that once penciled out no longer came close to doing so.Īzagra broke the bad news in September, announcing he would try to renegotiate Commonwealth Wind’s contracts with the state’s big utilities - namely National Grid and Eversource. The war in Ukraine and rapidly rising interest rates upended those plans, driving up costs for construction and materials. A happy day all around.īut the good times didn’t last. agreed to set up shop in Salem to do wind-farm staging and storage. Avangrid’s contracts prompted an Italian cable manufacturer, Prysmian Group, to promise a factory where an old coal-fired plant once stood in Somerset, and Crowley Maritime Corp. Round three would bring Massachusetts’ nascent offshore wind industry to critical mass. The two names were already familiar to state officials: Avangrid’s Vineyard Wind joint venture won rights to build the first wind farm in 2018 for 800 megawatts, and Mayflower secured 800 megawatts of its own in a second round. Also in that round, the venture known as Mayflower Wind (now SouthCoast Wind) won rights to provide 400 megawatts with its nearby project. Avangrid won utility contracts to build a wind farm that could generate 1,200 megawatts of electricity, or enough power for roughly 700,000 homes. It wasn’t supposed to go down like this when the Baker administration announced the winners of the third auction in December 2021.
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