Massachusetts utilities are planning to seek bids for up to 1,600 MW of offshore wind energy in May.
Eversource Energy, National Grid, Unitil and the Massachusetts Department of Energy Resources (DOER) on Wednesday jointly filed a draft request for proposals with the Massachusetts Department of Public Utilities (DPU).
The RFP would be issued May 7, with contracts submitted for DPU approval by April 27, 2022.
In a letter to DPU Secretary Mark Marini on Thursday, DOER said the draft RFP reflects changes from previous offshore wind RFPs based on public comments, consultation with state agencies and lessons learned from prior solicitations.
“The draft RFP allows for larger project bids and places a greater emphasis on economic development, diversity, inclusion and environmental justice,” DOER said Thursday on Twitter.
Among the changes is the removal of preferred bid sizes. The draft RFP seeks between 400 and 1,600 MW of total generation capacity, and bids can range from 200 to 1,600 MW.
“By allowing larger bid sizes than prior rounds, a bidder should have more flexibility to design bids to efficiently and cost-effectively use available lease areas, interconnection points, transmission cabling and other infrastructure,” DOER said.
Bid Quality
This solicitation also will be the first-time bidders must address equity in their submissions.
A quantitative and qualitative analysis, weighted 75 and 25 points, respectively, set in previous RFPs would be adjusted to 70-30 to put more emphasis on diversity, equity and inclusion, as well as economic benefits and socioeconomic impacts from siting, according to the draft RFP.
“DOER worked with state agency partners on an RFP provision to direct bidders to submit a workforce diversity plan and supplier diversity program plan that outlines their commitments to actively recruit and promote opportunity for a diverse set of workers and businesses,” DOER said.
The draft RFP also requires bidders to demonstrate commitments to economic development through, among other things, investments in offshore wind-related supply chains, port facilities, research, science and data collection, and environmental justice communities. Project plans will need to mitigate environmental burdens on environmental justice populations, engage with these communities, and track and report on how they are impacted. In addition, plans must show how the project will deliver benefits to low-income ratepayers without adding cost through, for example, energy efficiency and renewable energy upgrades, or rate relief.
Price Cap
As proposed, the RFP would require bidders to submit a price below $77.76/MWh, the price of the previous solicitation’s winning bid by Mayflower Wind. National Grid, however, proposed in the filing that the final RFP include a provision that would reduce the price cap in the event Mayflower goes into service and qualifies for the 30% offshore wind investment tax credit (ITC). The credit was part of renewable energy tax credits included in the COVID-19 stimulus bill signed into law in December.
Mayflower said in January that converting the value of the ITC into a price reduction for electricity generated by the offshore wind farm would reduce its bid price to $70.26/MWh.
Since bids for the latest solicitation would be prepared before an ITC determination is made for Mayflower, National Grid proposed an alternate bid structure. Any bidder would need to provide an alternative price that is lower than $70.26/MWh, if its first bid is between $70.26 and $77.76. DPU will issue a finding on National Grid’s proposal in its final order on the draft RFP.
