Massachusetts denies motion to delay offshore wind contracts

Unitil

07/11/2022 21:45

Nov 7 (Reuters) - Massachusetts utility regulators
denied offshore wind power company Commonwealth Wind's motion to
suspend its power purchase agreement with state electric
utilities, raising questions about the future of Commonwealth's
proposed offshore wind project.
    The Massachusetts Department of Public Utilities (DPU) said
in an order on Friday that Commonwealth "is a sophisticated
market participant well capable of factoring economic
contingencies into its contract prices ... and exercising its
options under the existing (power purchase agreements)."
    Commonwealth is a unit of U.S. power company Avangrid Inc
 AGR.N , which is majority owned by Spanish energy company
Iberdrola SA  IBE.MC .
    Commonwealth said in an October filing seeking a one-month
suspension of the DPU proceedings that the project "is no longer
viable because of recent global commodity price increases" due
to "the war in Ukraine, interest rates, supply chain
constraints, and persistent inflation."
    Avangrid spokesperson Craig Gilvarg said the company "can
present a proposal that would return the project to economic
viability" and intends to present that information to the state
in coming days.
    In May, Massachusetts utility units of Eversource Energy
 ES.N , National Grid PLC  NG.L  and Unitil Corp  UTL.N  sought
DPU approval of two long-term contracts to purchase offshore
wind from Commonwealth and Mayflower Wind.
    Commonwealth, however, said it "remains committed to the
project" and still expects it could enter service in 2028.
    Mayflower, which is owned by units of Shell PLC  SHEL.L  and
Ocean Winds, said the DPU should grant Commonwealth's motion "to
address the impact of current extraordinary global economic
conditions" on the agreements.
    Ocean Winds is owned by units of Portuguese energy company
EDP Energias de Portugal SA's  EDP.LS  majority-owned EDP
Renováveis SA  EDPR.LS  and France's ENGIE SA  ENGIE.PA .
    The DPU said Commonwealth and Mayflower must decide whether
they intend to move forward with their contractual obligations
or file a request to dismiss the proceedings.
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BRIEF-Iberdrola Takes Control Of Over 2,000 MW Wind Capacity In
US     urn:newsml:reuters.com:*:nFWN2TR0TC
BRIEF-Engie Joint Venture Ocean Winds Signs 400 MW PPA In US   
 urn:newsml:reuters.com:*:nFWN2T50FG
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 (Reporting by Scott DiSavino; editing by Grant McCool)
 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters
Messaging: scott.disavino.thomsonreuters.com@reuters.net))