SouthCoast Wind Asks R.I. Court to Overturn Pause of Contract Consideration
August 21, 2023
PROVIDENCE — An offshore wind developer has asked the Rhode Island Supreme Court to overturn a decision by state energy regulators to pause consideration of its application for an offshore wind project with an export cable that is expected to run underneath the Sakonnet River.
On July 15, the Energy Facility Siting Board (EFSB), which oversees energy infrastructure in Rhode Island, voted unanimously to place a hold on an application for a 2,400-megawatt (MW) offshore wind project from SouthCoast Wind LLC, after the company stated it would terminate its existing contracts with Massachusetts utility companies.
EFSB board members, including chair Ron Gerwatowski, questioned the economic viability of the project without the contracts, known as power-purchase agreements (PPA), in place, and as far as the board was concerned, the project proposal from SouthCoast Wind was hypothetical.
In its decision, the EFSB gave SouthCoast Wind until Oct. 1, 2024 to secure new PPAs, after which the offshore wind application would be terminated and the company would have to start the process again.
But SouthCoast Wind is calling foul. In its appeal to the state Supreme Court, the company argued that state law does not require a developer to secure PPAs before consideration of a project. PPAs can demonstrate need, according to the filing, but they are not the only requirement under state law. Instead, the need for a project should be demonstrated by the project’s progress and commitment, the public policy driving renewable energy in the state, and the impact of renewable energy facilities on public health, safety, the environment, and economy.
The filing goes on to argue that state law does not actually define “project viability” in terms of offshore wind projects, and instead the EFSB should consider a wide range of factors beyond its “overly narrow” interpretation of the statute.
In its filing, SouthCoast Wind pointed to the EFSB’s approval of the Revolution Wind project last year, which cited testimony from the Public Utilities Commission’s advisory opinion that said the project met the need requirement of state law by providing substantial amounts of energy to meet ratepayers’ demands and achieve state renewable energy goals. (As part of his appointment, Gerwatowski also chairs the PUC.)
It has been a turbulent year for the SouthCoast Wind project. Originally called Mayflower Wind, the company announced its plans last year to run a 1,200-MW export cable under the Sakonnet River across Portsmouth and exiting into Mount Hope Bay, where it would transmit the electricity generated to a substation at Brayton Point in Somerset, Mass. The turbines were slated to occupy a 199-square-mile lease area 20 miles south of Nantucket, Mass.
The company, which is a joint venture between the renewable energy arm of Royal Dutch Shell and renewable energy developer Ocean Winds — itself a joint venture between a pair of European utility companies — has pledged to hire locally in Rhode Island and compensate Portsmouth as a host community for the cable, but no agreement has been announced.
The Sakonnet River cable would only make up half the project; another 1,200-MW cable bundle is planned to make landfall in Falmouth, Mass. The total energy generated from the offshore wind facility would be enough to power 800,000 homes in Massachusetts and Rhode Island, according to SouthCoast Wind.
Trouble began last fall when company officials began expressing doubts about the economic viability of the project in filings to Massachusetts regulators, citing inflation and supply chain issues impacting the offshore wind industry. The company expressed concerns that the PPA contracts would not provide adequate payment as previously expected.
But it seems they neglected to tell Rhode Island regulators. EFSB chair Gerwatowski, after reading stories regarding their filing in the press, ordered a show-cause hearing for company officials to explain their doubts.
In a two-and-a-half-hour-long hearing, held after several lengthy delays, the company affirmed its project viability concerns and said that nearly every other offshore wind developer was dealing with insufficient PPAs and project economics that were underwater. The company also confirmed that, in May, it chose to terminate its existing contracts with Massachusetts utilities.
Gerwatowski expressed deep ambivalence over the latitude offshore wind developers were afforded to walk away from their existing contracts and negotiate more favorable deals, saying policymakers faced an impossible choice when it came to procurement.
“It leaves state regulators in a place where they must blindly approve contracts at least than competitive prices,” Gerwatowski said at the show-cause hearing. “Or risk falling short of important policy goals.”
SouthCoast Wind’s appeal has yet to be granted by the state Supreme Court. As of this writing, the EFSB is still writing its legal response.
Join the DiscussionView Comments
Your support keeps our reporters on the environmental beat.
Reader support is at the core of our nonprofit news model. Together, we can keep the environment in the headlines.