It was supposed to be New England’s biggest and most innovative offshore wind initiative ever — a three-state solicitation by Connecticut, Massachusetts and Rhode Island designed to get the best prices and efficiencies for a lot of new offshore wind that would be key in creating carbon-free energy to help curb climate change.
It was the first such effort in the U.S., and it would also reset the offshore wind process in the region, which has suffered setbacks in the last year or so due to balky national and international economies, inflation and more than a few geopolitical problems.
But when an announcement of the projects selected from the March solicitation finally came a few days after Labor Day, Connecticut was MIA. A brief statement from the state Department of Energy and Environmental Protection congratulated the other states and then said simply: “The evaluation of project bids remains underway in Connecticut and we will announce a final decision in our solicitation at a future date.”
To be fair, there had been hints for several weeks that the state would not follow the same schedule as its neighbors. But Connecticut’s absence has prompted more than a little private speculation that politics — specifically around the high electricity rates that are providing Republican campaign fodder in this election season — is at work.
“We don’t know, but we do know that that’s been a challenging issue in the state,” said Kate Sinding Daly, senior vice president of law and policy at Conservation Law Foundation, or CLF. “We hold out hope that Connecticut, as it said it was, is continuing to evaluate the opportunities and may yet come forward with one or more projects.”
Gov. Ned Lamont told The Connecticut Mirror this week that his reason for caution with a new offshore wind commitment is its high cost that would compound existing high electric rates, coupled with the reality that the state already is essentially subsidizing the Millstone Nuclear Power Station. At 2,100 megawatts, Millstone is the region’s largest source of power, all of it carbon-free.
“We’re the ones who are subsidizing nuclear, the biggest source of carbon-free power. I care deeply about affordability, especially now,” Lamont said. “I had some background discussions on that and am still thinking about it.”
But some privately worry that Lamont might pull the plug as he did in 2021 when the transportation and climate initiative, TCI, faced massive opposition from Republicans and others.
“This feels eerily similar,” said one advocate, who declined to be named.
But most were taking Lamont at his word that his calculation was money, not politics and the upcoming election.
“I certainly, in my heart of hearts, hope that’s not a consideration. If this is announced after the first week of November, I would be very angry,” said Sen. Ryan Fazio, R-Greenwich, and the ranking member on the Energy and Technology Committee. “I think the governor is very reticent to sign a contract to buy electricity at three or four times the wholesale market rate for electricity. He’s a businessman; he understands that’s a bad deal for consumers in Connecticut, and I think the hope from him, me, others, is that these projects, these megawatts, become a lot cheaper and more competitive in the future. We should not be a buyer at any price.”
Rep. Jonathan Steinberg, D- Westport, and the committee’s co-chair, agreed that money was the core issue for the governor, who had met with the committee’s leadership to discuss the situation. “He is extremely focused on ratepayer pain right now and does not want to have his fingerprints on something that is going to raise rates,” Steinberg said, adding that an agreement reached now wouldn’t impact ratepayer rates for years.
At the same time, he held out hope the political and price landscapes would change quickly.
“Does he pivot right after the election? I would hope so, certainly. I urged him to do that,” Steinberg said. “I would have thought perhaps he would have hedged his bets and made a rather small procurement. … I would have expected something.”
Steinberg and climate advocates repeatedly pointed to the need for offshore wind to help meet the state’s mandate for a zero-carbon grid by 2040, lower greenhouse gas and other climate-warming emissions that plague the region, and help meet an increased need for power supplies as motor vehicles, heat and other heavy power users, such as data centers, turn to electricity for their fuel source.
“Developing our offshore wind resources is absolutely critical to reaching our energy and climate goals, that much is clear,” said Charles Rothenberger, climate and energy attorney at Save the Sound. “These projects need to start being built.”
“We’re still hoping that there may be an announcement from Connecticut, or perhaps continued negotiations, even among the three states, that will result in the announcement of more,” Daly of CLF said. “The fact that this still represents forward progress is a net positive.”
Both pointed out that the power from offshore wind really goes into the New England grid, where all the states benefit from the power as well as the job creation associated with it and, eventually, lower energy prices.
But the current situation was not how regional offshore wind development was originally conceived. And it is putting some pressure on Connecticut to live up to its commitment, especially because the state was a key player in developing this particular coalition as well as others aimed at modernizing and decarbonizing energy and transmission in the New England grid.
What happened
Several projects were already in progress in the region when inflation spiked, supply chains fractured and worldwide economies sputtered as a result of COVID and the Russian invasion of Ukraine.
Some offshore wind developers on the East Coast tried to renegotiate their deals to accommodate their now higher costs. Others pulled out of their deals.
Among them was Avangrid. It pulled out of an 804-megawatt contract for Connecticut called Park City Wind, which included jobs and port development in Bridgeport. It also pulled out of a 1,200-megawatt contract in Massachusetts called Commonwealth Wind.
In 2019, the Connecticut legislature authorized the state to purchase up to 2,000 megawatts of offshore wind. Park City had been the first purchase towards that goal. Its cancellation put the state back to zero, where it remains.
An earlier offshore wind project, Revolution Wind, pre-dated that authorization and is under construction. It will supply 300 megawatts for Connecticut and 400 for Rhode Island.
Avangrid put its projects back up to bid, presumably at higher prices, in the multistate solicitation in March of this year. Park City was renamed New England Wind 1. Commonwealth is now New England Wind 2. Avangrid continued working on them all along, and New England Wind 1, the old Park City, is fully permitted and much farther along than any other project in the bid group.
Somewhat surprisingly, Massachusetts — not Connecticut — chose that project, now 791 mw. It’s unclear whether the Bridgeport development component remains. It also chose 800 mw of a 1,200 mw project called Vineyard Wind 2 and 1087 mw of a project called South Coast Wind, also a rebid project. Rhode Island opted for the remaining 200 mw of South Coast.
What remains, aside from New England Wind 2 (likely to be rebid in a future solicitation) and the rest of Vineyard Wind 2, is the entirety of a project called Starboard Wind. It’s an Ørsted project, proposed at 1,184 mw specifically for Connecticut or Rhode Island, or a joint project. The project would use the State Pier in New London for staging and construction.
Ørsted, along with Eversource, helped re-develop the pier and it is already handling assembly and delivery operations for three offshore wind projects: Revolution, Sunrise Wind in New York and the already completed and operational South Fork Wind 35 miles off the eastern tip of Montauk Point on Long Island.
But it is the remaining 400 mw of Vineyard Wind 2 that stands to threaten the heretofore synchronized and amicable energy relationship among the New England states, especially the two largest power users: Massachusetts and Connecticut.
A somewhat ominous statement on Vineyard Offshore’s website is casting doubt on the viability of the project if no state picks up the rest of the power. That could eliminate about 30% of the Massachusetts commitment, and the finger is pointed directly at Connecticut.
It reads: “’Vineyard Offshore congratulates Gov. Healey and the Commonwealth of Massachusetts for their commitment to procure up to 800 megawatts from our 1,200-megawatt Vineyard Wind 2 project, which provides the opportunity to deliver New England’s next-generation offshore wind project,” said Vineyard Offshore CEO Alicia Barton. “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 did not respond to a request for further comment. But those with knowledge of the project say it is not an idle threat.
“I think Gov. Healey is looking for a partner. I think she had a reason to be expecting she’d have a partner,” Steinberg said. “Everything that the New England states have been talking about incorporates offshore wind as a significant component. I’m just disappointed in the governor’s position at this point. I don’t think it’s constructive.”
But he and others believe the governor has time to make up his mind, given that these projects are years away, the developers keep working on them even without buyers for the power and given the financial landscape may be about to change with the Federal Reserve widely expected to lower interest rates at its next meeting this month.
On the flip side, Donald Trump famously hates offshore wind, and his first administration slow-walked its development for four years. If he returns to office, a similar scenario may well play out.
“I don’t know what the plan is, but we could pick up those 400 megawatts, and there’s no particular urgency for us to make that decision yesterday,” Rothenberger said. “If Connecticut chose no projects from this latest round, that would be very disappointing. … It would seem to indicate a real lack of awareness of the benefits of these projects for Connecticut residents, which I know the administration possesses.”
As for the governor himself, when asked when he might decide on whether to opt in on offshore wind: “I’m cautious on this, as you know,” he said. “Not for a while.”
Mark Pazniokas contributed reporting.
This was originally published by The Connecticut Mirror September 15, 2024.
