Avangrid (NYSE: AGR) CEO Dennis Arriola said during an earnings call Wednesday that the company expects the Park City offshore wind project to begin commercial operations in 2026 instead of the 2025 date it previously announced.
Arriola said Park City will begin generating electricity in 2025 and that the shift in the operating date, though pushed to the following year, is “by months, not a year.”
“I think that we’re being conservative here based upon the notice of intent that came out,” Arriola said.
Arriola said he hopes that completing construction of Vineyard Wind I, the 800-MW joint venture between Avangrid and Copenhagen Infrastructure Partners off the coast of Martha’s Vineyard in Massachusetts, for which the U.S. Bureau of Ocean Energy Management approved its final permit in May, will provide “additional synergies and learnings that will adapt to Park City.” Vineyard Wind I will feature 84 turbines and produce electricity starting in 2023 ahead of full commercial operation in 2024.
“I think one of the things that give us confidence that we’re going to get through this again is because we’re the first ones with Vineyard Wind,” Arriola said. “We know how the process works; they’re comfortable with how we provide information, and we’ve learned a lot, and they have as well.”
Avangrid Senior Vice President and CFO Doug Stuver added that 2026 was “always assumed” to be the first full year of operation for Park City despite previous assertions.
BOEM also granted an extension of the operations term for Vineyard Wind I from 25 years to 33 years that also applies to Park City and Vineyard Wind South.
Development of the Kitty Hawk Offshore project off the coast of North Carolina, which has the potential to deliver 2,500 MW of clean energy into Virginia and North Carolina, is progressing, and Arriola said Avangrid expects to receive the notice of intent “soon.” He added that Avangrid has access to lease areas with as much as 7.5 GW of OSW capacity. In terms of future opportunities, Massachusetts has released its third request for proposals for up to 1.6 GW with bids due in September, which is expected to be followed by more than 3 GW in Rhode Island, New York and Connecticut starting next year.
NECEC, PNM Merger Talk
Construction of the $1 billion New England Clean Energy Connect (NECEC) transmission line with Central Maine Power is “ongoing in all parts” after an injunction to halt work on the northern portion of the project was lifted in mid-May. NECEC would span 145 miles with the capacity to carry 1,200 MW of Canadian hydropower from the Maine-Québec border to Lewiston, Maine, where it will connect to the New England Control Area. The HVDC project includes upgrading 50 miles of existing AC transmission and a new converter station and substation. It has an in-service date of 2023, which Arriola said remains “on track.”
Avangrid’s acquisition of PNM Resources also continues to churn along. The New Mexico Public Regulation Commission is the only remaining approval necessary to close the merger. Evidentiary hearings are set for mid-August on the stipulated agreement among PNM, Avangrid and 13 other parties. New Mexico Gov. Michelle Lujan Grisham has also expressed support for the merger.
Arriola said that conversations continue with other stakeholders to have them join the stipulation agreement. He ultimately expects the New Mexico PRC to approve it and for the transaction to close by year-end.
Earnings
Avangrid reported earnings of $122 million ($0.35/share), up $24 million from the same period in 2020 ($98 million; $0.32/share). Avangrid Networks earned $108 million during the quarter, up from $82 million in June 2020. Avangrid Renewables posted earnings of $41 million during the quarter, compared with $30 million in June 2020.
Call transcript courtesy of Seeking Alpha.
