Could deal with Mass. return Conn. to latest offshore wind energy auction?
A week after Connecticut was a no-show at an offshore wind auction it helped organize, a proposed energy swap with Massachusetts could lead to its return to the multi-state collaboration that was created to reduce the costs of wind power for southern New England.
Massachusetts has signaled it is receptive to an agreement, proposed by Connecticut Gov. Ned Lamont, that could put Connecticut back into offshore wind procurement.
Under the plan, according to industry and government officials, Massachusetts would join Connecticut in a long term agreement to buy energy from the Millstone nuclear power station in Waterford. Connecticut, in return, would partner with Massachusetts on buying power from the offshore wind project Vineyard Wind 2, planned for a tract of ocean about 25 miles south of Martha’s Vineyard.
Lamont discussed the plan with Massachusetts Gov. Maura Healey during a regional energy conference in Boston this week.
“Governor Lamont believes that Millstone is a regional asset and is grateful that Governor Healey included the procurement language in a recent legislative proposal,” a Lamont spokesperson said Friday. “As was discussed at the meeting on Tuesday, making our grid more reliable, green, and affordable is a multi-state effort.”
Healey’s office did not respond immediately Thursday to specific questions about the Millstone deal. But earlier in the week, a spokesperson described the benefits of regional cooperation on energy issues.
“Offshore wind is key to unlocking jobs and economic development in our region,” the Healey spokesperson said. “We believe in the Vineyard Wind 2 project. Selecting projects now will ensure New England stays in the lead as the industry takes off nationwide. Massachusetts appreciates Connecticut’s partnership and we look forward to other entities joining in this procurement.”
Recent developments in offshore energy arrived at a politically unfortunate time for the Lamont administration. Consumer outrage over a summertime spike in consumer electric bills continues as a legislative election approaches and questions about conversion to an all electric economy pile up.
The price increase for consumers arrived in the public benefit portion of bills, which reimburses Eversource and United Illuminating for hundred of millions of dollars the state requires them to spend on social welfare, decarbonization and other so-called public benefit programs
Most of the July increase, 78%, is the result of a contract the state has with Dominion Energy that requires Eversource and United Illuminating to buy electricity from its Millstone station. The contract is intended to be a hedge against fluctuations in energy costs but over the past year it has committed the utilities to purchasing power at above market rates.
A week ago, Connecticut, Rhode Island and Massachusetts were expected to simultaneously announce the winning bidders in the first tri-state wind energy auction. Connecticut’s absence was attributed by industry observers to political reluctance to commit to buying expensive wind energy while consumers complained about bills arriving now.
Connecticut’s failure to commit to an offshore power purchase raised doubts about both the future of a three state initiative and the Vineyard Wind 2 project, which would connect to the New England power grid through an undersea transmission line ending at a yet-to-be-built power substation in Montville, creating hundreds of local jobs and millions in local investment.
At a news conference earlier this week, before Healey proposed legislation to authorize a Millstone deal, Lamont sounded uncertain about whether Connecticut would return to the wind auction.
“Look, I think everybody would like us to triple down on as much new power, particularly carbon free power, as we possibly can,” Lamont said during a mid week press conference. “And I do as well, but I also have a close eye for the rate payer because I know how expensive it is.”
Connecticut already has an agreement to buy offshore power, with Rhode Island, from the Revolution Wind project under construction south of Block Island by Danish multinational Orsted. The project will provide 304 megawatts of energy to Connecticut and 400 megawatts to Rhode Island, enough energy to power more than 350,000 homes in both states.
Asked when he would make a decision on rejoining the latest offshore auction, Lamont said, “We’ll see.” Asked whether it would be before the election, he said, “I’m cautious on this, as you know, so not for a while.”
When the winning bids were announced a week ago, the project developers chosen by Massachusetts to produce, collectively, 2,678 megawatts of electricity for that state, were SouthCoast Wind, Vineyard Wind 2 and New England Wind 1, a venture of Avangrid, parent company of Orange-based United Illuminating. Rhode Island took an additional 200 Megawatts from SouthCoast Wind.
The announcements, and Connecticut’s absence, raised doubts about the future of Vineyard Wind 2, which is designed to produce 1,200 megawatts of electricity, but sold only 800 to Massachusetts. Because of the project’s design, it is not clear whether it can proceed with less than full production, according to a company official.
“We look forward to Connecticut’s forthcoming decision on the remainder of the procurement so that we can begin to deliver important economic and climate benefits to the region,” Vineyard Offshore CEO Alicia Barton, the project developer, said in a statement this week.
While a Millstone/wind energy agreement appears to be under discussion, few details, including how it would affect consumer bills, are known. A Connecticut legislator present at a meeting when Lamont raised the subject, said Massachusetts would not buy into Millstone power until after the state’s existing contract runs out in 2029 and a new contract is negotiated.
Political and industry observers in Hartford and Boston said there is no certainty that such an agreement would win political approval in either capital. Because Healey needs legislative authorization to enter a power purchase agreement with Dominion’s Millstone, and the Massachusetts legislature is not in session. she has attached a Millstone provision to a supplemental budget bill.
“Now, just because she added it doesn’t mean it is going to survive in the legislature,” a Massachusetts power industry official said. “There are broader politics around it. But it is a very live deal.”
In Connecticut, moderate Democrats and Republicans appear reluctant to agree to anything that would raise rates.
State Sen. Ryan Fazio, a Republican and ranking member of the Legislature’s Energy and Technology Committee has questioned why the either state would consider buying into wind energy at current prices, which are at least two to three times the $04.99 cents per kilowatt hour Connecticut is paying under the existing Millstone contract.
Comment threads are monitored for 48 hours after publication and then closed.