Massachusetts Legislation Spurs Offshore Wind Power Development

By on August 24, 2016

On August 8, 2016, Massachusetts Governor Charlie Baker signed into law a major energy bill aimed at putting Massachusetts at the forefront of states developing offshore wind power. The law, An Act Relative to Energy Diversity (H. 4568), requires Massachusetts electricity distribution companies to procure 1,600 megawatts (MW) of offshore wind energy by June 30, 2027. The United States currently has no offshore wind generation, but Rhode Island wind developer Deepwater Wind is nearing completion of a 30 MW offshore wind farm, which will be the first of its kind in the country. In a statement, Governor Baker’s office said the bill “spurs the development of an emerging offshore wind industry…and represent[s] the largest commitment by any state in the nation to offshore wind.”

The new law requires Massachusetts distribution companies and the Department of Energy Resources (DOER) to jointly develop a competitive bidding process for offshore wind energy generation resources by June 30, 2017. The bidding process will be subject to review by the Massachusetts Department of Public Utilities (DPU). The law permits one solicitation or multiple staggered rounds of solicitation that must result in at least 1,600 MW of aggregate nameplate capacity of offshore wind energy. If the solicitation is staggered, each round must seek proposals for at least 400 MW of capacity, and the costs in each subsequent round must decrease or the proposal will be rejected by the DPU. All proposals received during the solicitation process are subject to review by DOER.

Each distribution company will enter into a contract with the solicitation’s winning bidders for the distribution company’s apportioned market share, calculated based on the total energy demand for all distribution companies, compared to demand in an individual distribution company’s service territory. Distribution companies may use the long-term contracts to purchase renewable energy certificates, energy, or a combination. All proposed long-term contracts executed with distribution companies will be filed with the DPU and subject to DPU approval. Specifics on the solicitation, contracting, and approval processes will come when the DPU and DOER promulgate regulations carrying out the new legislative mandate for offshore wind.

The legislation represents a new chapter in offshore wind for Massachusetts. The infamous Cape Wind project—a proposed 468 MW wind farm—has been held up in the planning stages for years and its current status is uncertain. The new law is a definite step towards Massachusetts’ development of offshore wind energy generation resources. Several wind development companies already hold leases in Massachusetts waters.

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