Massachusetts Department of Public Utilities approves long-term contracts for Vineyard Wind
On April 12, 2019, the Massachusetts Department of Public Utilities (DPU) approved the long-term power purchase agreements (PPAs) between Vineyard Wind and the state’s electric distribution companies (EDCs). The PPAs provide for the sale of power and renewable energy credits over a 20-year term for two phases of the Vineyard Wind project, totaling 800 MW of offshore wind power. The price for the first 400 MW phase is 7.4 cents per kilowatt hour and the second 400 MW phase is 6.5 cents per kilowatt hour. Both prices escalate by 2.5% each year.
The PPAs resulted from a request for proposals issued on June 29, 2017 by the EDCs and the Department of Energy Resources (DOER). More recently, on March 27, 2019, the EDCs and DOER submitted to the DPU for approval the terms of the second offshore wind solicitation. As we look ahead to this second 800 MW procurement, the DOER is also in the process of determining when and how to undertake for the next 1,600 MW as part of a study required under the 2018 Act to Advance Clean Energy. With this, we are finally starting to see the full policy cycle for offshore wind play out.
The approval of the Vineyard Wind PPAs provides a template for future long-term contracts for offshore wind using the RFP process. In approving the PPAs, the DPU needed to determine, among other factors, that they were “a cost-effective mechanism for procuring reliable renewable energy on a long-term basis,” and that the contracts are “in the public interest.” With the DPU’s favorable ruling in hand, a critical milestone for the industry is met, keeping Massachusetts at the forefront of offshore wind in the United States, while delivering real value to the citizens of the Commonwealth.