Governor Charlie Baker and secretary of energy and environmental affairs Kathleen Theoharides on Tuesday urged the Legislature to pass a plan to make the state more competitive in the offshore wind industry.
The hourslong hearing before the Joint Committee on Telecommunications, Utilities, and Energy was contentious: 90 witnesses, including many supporters and some naysayers, signed on.
Baker, who will leave office later this year, is under pressure to boost clean energy. Last year, he signed a landmark binding agreement to reduce Massachusetts’ carbon emissions by 50 percent by 2030.
Offshore wind is the linchpin of Massachusetts’s climate goals. It is the largest source of clean energy for the Commonwealth. Last month, officials selected two offshore wind projects, Vineyard Wind and Mayflower Wind, to cumulatively generate 1,600 megawatts of clean power by the end of this decade. But Baker’s administration has said the state will have to bring online thousands more megawatts of offshore wind power by 2050 to keep pace with its goals. Through the 2030s, it said it must procure 1,000 megawatts per year.
“Offshore wind is obviously a centerpiece of the Commonwealth’s strategy to meet the demand associated with a largely electrified economy,” Baker said.
The legislation, which Baker first filed in October, would amend the Commonwealth’s process for procuring offshore wind. It proposes using $750 million in federal stimulus funds to support offshore wind projects and other clean energy developments. It would also hand the power to decide who wins offshore wind contracts to state officials with the Department of Energy Resources. Currently, executives from electric utilities National Grid and Eversource have this authority, which Baker said can create conflicts of interest.
The act’s most controversial provision would remove a requirement that each approved offshore wind project bear a lower price than the one that preceded it. Supporters of the measure argue that this price cap, codified in a 2016 clean-energy law, has deterred companies from bidding on new projects, causing Massachusetts to fall behind rival East Coast states in the sector.
“As the industry scales up and technologies improve, we should expect costs to continue to come down. However, this may not happen in a strictly linear fashion, because each project has unique factors — such as the topography of the ocean floor, or the ease of interconnecting to the regional grid — that may affect its cost,” Ben Hellerstein, state director of Environment Massachusetts, said. “Removing the price cap would provide necessary flexibility in future rounds of offshore wind procurements.”
House chair of the Legislature’s energy committee, Representative Jeff Roy, supports removing the price cap. But his cochair, Senator Mike Barrett, pleaded against it, arguing it could cause electricity prices to jump and thereby put ratepayers at risk.
He noted New York, Connecticut, and New Jersey, none of which have caps on the price of offshore wind projects, have each paid much more for offshore wind than Massachusetts has so far. For instance, while power from the Commonwealth’s Mayflower Wind project will come with a cost of $58 per megawatt hour, New Jersey is paying twice that much for energy from its Ocean Wind project.
“I want to ask the two of you whether you want to run the risk of these kinds of figures if we simply jettison the cap altogether,” Barrett said, addressing Baker and Theoharides.
In response, Theoharides noted that the bill does include language requiring officials to weigh the cost effectiveness of each offshore wind proposal. Yet she said the price cap might lead to officials accepting proposals for less energy overall simply to save money.
“It’s sort of like, if you’re building a bridge and you get a bunch of bids and one of them has four lanes and one of them has three lanes, and the bridge with four lanes will cost a little bit more but you get a lot more value out of it for ratepayers,” she said. Baker promised to provide a written response to Barrett’s concerns in the coming weeks.
Though he supports Baker’s proposal “we should do everything we can to tap into our offshore wind resources,” Hellerstein said. He called for the Legislature to pass the 100% Clean Act, which would commit Massachusetts to a faster timeline to zero out emissions.
Still, the Environmental League of Massachusetts said Baker’s proposed $750 million would be a “game changer.”
Two key aspects of Massachusetts’ plan to cut carbon emissions — a cap-and-invest pact known as the Transportation Climate Initiative and a plan to build a hydropower transmission line called the New England Clean Energy Connect project — both fell apart late last year.
“On the whole, Governor Baker’s record on climate change remains lukewarm,” Hellerstein said.
Elizabeth Turnbull Henry, president of the Environmental League of Massachusetts, said if it passes, the new measure could help Baker revive his climate legacy.
“Governor Baker will be remembered for championing offshore wind and for passing a first-in-the-nation bill to bring this crucial renewable energy resource to our shores,” she said.
An earlier version of this story incorrectly stated that the Baker administration committed to reduce Massachusetts’ carbon emissions by 45 percent, rather than 50 percent, by 2030.