The New York State Public Service Fee has denied petitions filed by a bunch of offshore wind builders and a state renewable vitality commerce affiliation looking for monetary reduction for 4 proposed offshore wind tasks and 86 land-based renewable tasks.
The petitions denied had been submitted by Empire Offshore Wind LLC and Beacon Wind LLC, Dawn Wind LLC, and the Alliance for Clear Power New York, Inc. (ACENY).
In denying monetary reduction, the Fee stated it opted to protect the sturdy aggressive bidding course of that gives critically wanted renewable vitality assets to New York within the fairest and most cost-effective method that protects shoppers.
”The requested amendments to the contracts would have supplied changes outdoors of the aggressive procurement course of; such reduction is basically inconsistent with long-standing Fee coverage,” stated Fee Chair Rory M. Christian.
”The Fee has repeatedly acknowledged that competitors within the procurement course of is critical to guard ratepayers and offers the soundest method to mobilize the trade to realize our crucial State targets dependably and cost-effectively, and we achieve this once more by means of at present’s motion.”
The petitions had been looking for changes to Renewable Power Credit score (REC) and Offshore Wind REC (OREC) buy and gross sales agreements entered with NYSERDA to handle current inflationary pressures which can be impacting undertaking economics.
The Fee discovered that the contract amendments sought by the Empire/Beacon, Dawn, and ACENY petitions weren’t in one of the best curiosity of the State’s ratepayers.
On a month-to-month invoice foundation, granting the request to amend the executed contracts outdoors the aggressive procurement course of would have resulted in as excessive as 6.7 per cent will increase for residential clients and as excessive as 10.5 per cent for industrial or industrial clients on month-to-month payments relying on service territory and the extent of reduction supplied — above what was already dedicated, the Fee stated.
In its choice, the Fee stated that it stays absolutely supportive of the Local weather Management and Group Safety Act, which codifies decarbonization necessities for varied sectors of the financial system and adopts formidable renewable vitality deployment targets, and can proceed to stick to Local weather Act necessities in a way that preserves aggressive procurement processes and ensures utility charges are simply and cheap.
The Fee stated that the choice reaffirms that aggressive procurement is one of the best, best approach to assist New York attain its objective of getting at the very least 70 per cent of electrical load served by renewable vitality by 2030, improvement of 9,000 MW of offshore wind vitality by 2035 and assembly statewide demand with zero emissions assets by 2040.
All three petitions requested an order from the Fee that will have directed NYSERDA to include an adjustment mechanism into current REC and OREC buy and gross sales agreements to account for inflation and different financial impacts cited by the builders.
The petitions drew vital feedback from stakeholders each supporting and opposing granting monetary reduction. Supporters pointed to the State’s clear vitality targets and argued that reduction is required to remain on observe towards reaching these targets. Opponents usually expressed concern with the rise in costs that can be borne by ratepayers and the disruption of the aggressive course of that was used to award these tasks.
The petitions usually acknowledged that the results of the COVID-19 pandemic have uncovered the tasks to unprecedented world and regional provide chain bottlenecks, excessive inflation, and will increase in the price of capital, pushed by rising rates of interest. Additional, the petitions recognized impacts related to the struggle in Ukraine, together with elevated demand for renewable vitality and ensuing shortages and value will increase for key elements and tools.
The offshore builders requested enhanced phrases of their offshore renewable vitality credit score (OREC) contracts that will modify for inflation, and in addition embrace interconnection price adjustment, with the three way partnership between Equinor and BP additionally requesting an extension of the contract by 5 years for the 810 MW Empire Wind 1 offshore wind farm (from 25 to 30 years).
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Of their petitions, the builders stated that with out value changes their offshore wind tasks may not be capable to transfer ahead, with Ørsted and Eversource saying that with out this intervention “it might not be capable to acquire a closing funding choice (FID) permitting it to totally assemble the Mission” and the Equinor-BP three way partnership noting that value changes would “restore the Tasks’ means to draw the capital required for them to maneuver ahead”.
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