Massachusetts Long-Term Contract For The Purchase Of Renewable Energy And Recs

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Tuesday, September 24, 2013

Massachusetts Utilities Submit Long-Term Contracts for the Purchase of Renewable Energy and RECs from Five Maine Wind Projects and One New Hampshire Wind Project to the Massachusetts Department of Public Utilities for Approval

Tuesday, September 24, 2013

On Friday, September 20, 2013, Massachusetts’ four electric utilities filed long-term contracts for the purchase of electricity and renewable energy credits (RECs) from six land-based wind projects for review and approval by the Massachusetts Department of Public Utilities (DPU).  These long-term contracts were selected by the utilities as part of a collaborative request for proposals (RFP) that was approved by the Massachusetts DPU pursuant to Section 83A of the Massachusetts Green Communities Act and issued on April 1, 2013.  Each of the utilities, Fitchburg Gas and Electric Light Company d/b/a Unitil, National Grid, and Northeast Utilities subsidiaries NStar Electric Company and Western Massachusetts Electric Co., entered into long-term contracts for their pro rata share of each of the six wind projects, resulting in twenty-four separate power purchase agreements for a combined total of 565 megawatts (MW) of output.  The long-term contracts submitted to the DPU for approval include:

A 15-year long-term contract for the energy and RECs from the 75.9 MW Wild Meadows project in Alexandria and Grafton, New Hampshire being developed by Iberdrola Renewables (proposed project commercial operation date: December 31, 2016);

  • A 15-year long-term contract for the energy and RECs from the 97.1 MW Fletcher Mountain project in Somerset County, Maine being developed by Iberdrola Renewables (proposed project commercial operation date: December 31, 2016);
  • A 15-year long-term contract for the energy and RECs from the 147.6 MW Oakfield Wind project in Oakfield, Maine being developed by First Wind (proposed project commercial operation date: December 31, 2015);
  • A 15-year long-term contract for the energy and RECs from the 186 MW Bingham Wind project in Bingham, Maine being developed by First Wind (proposed project commercial operation date: December 31, 2016);
  • A 15-year long-term contract for the energy and RECs from the 38.2 MW Passamaquoddy Wind project on the Passamaquoddy Reservation in Washington County, Maine being developed by the Exergy Development Group (proposed project commercial operation date: November 30, 2015); and
  • A 20-year long-term contract for the energy and RECs from the 20 MW Peskotmuhkati project on the Passamaquoddy Reservation in Washington County, Maine being developed by the Exergy Development Group (proposed project commercial operation date: November 30, 2014).

The pricing for energy and RECs contained in the long-term contracts are confidential, but they were publicly reported to be less than 8 cents per kilowatt hour on average.

The Massachusetts DPU will review the long-term contracts to determine whether the contracts are consistent with the requirements of Section 83A of the Green Communities Act and the DPU’s implementing regulations (220 C.M.R. 21.00 et seq.).  Among other things, the Act and the regulations require that the selected renewable energy projects: 1) have a commercial operation date on or after January 1, 2013; 2) are eligible to participate in the Massachusetts Class I renewable portfolio standard program and to sell RECs under that program; 3) are determined by the Massachusetts DPU to provide enhanced electricity reliability within the Commonwealth; 4) are determined by the Massachusetts DPU to be a cost-effective mechanism for procuring low-cost renewable energy on a long-term basis; and 5) facilitate the financing of renewable energy generation.

In response to a request by one of the developers, the utilities have requested that the Massachusetts DPU expedite its review of the long-term contracts so the developer can make certain financing arrangements before the end of calendar year 2013.