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'Cannot be financed and built': Company behind big offshore wind energy appeals DPU approval

Two turbines of the Block Island Wind Farm off the coast of Rhode Island. (Jesse Costa/WBUR)
Two turbines of the Block Island Wind Farm off the coast of Rhode Island. (Jesse Costa/WBUR)

The developer behind the largest single offshore wind farm in the state's pipeline on Thursday filed a formal notice of appeal to contest the Department of Public Utilities' approval of contracts that the developer agreed to but says will no longer allow its project to be financed or built.

The DPU last month determined that the contracts, which the wind developers and utility companies agreed to in May, "are in the public interest" and approved them over the developer's objections. Commonwealth Wind parent company Avangrid has said for months that increases in commodity prices, rising interest rates and supply shortages mean that its 1,200 megawatt renewable energy project "cannot be financed and built" under the terms of those power purchase agreements (PPAs).

On Thursday, the developer filed its appeal with DPU and asked that the regulators' orders related to the contracts "be set aside in their entirety because they are based upon errors of law, are unsupported by substantial evidence, are arbitrary, capricious, constitute an abuse of discretion, and are otherwise not in accordance with law." An Avangrid spokesman said the company made the filing "in order to preserve its rights."

"AVANGRID has been clear, in evidence submitted to the Department of Public Utilities, that because of the aggregate impact of unprecedented global economic headwinds, including historic inflation, sharp increases in interest rates, and supply chain bottlenecks, the current Power Purchase Agreements (PPAs) do not allow the company to secure the significant financing needed to construct this critical project," the spokesman, Craig Gilvarg, said.

Gilvarg said that Avangrid "is committed to working in partnership with the Healey-Driscoll Administration, Attorney General Campbell and the Massachusetts utilities to secure a speedy resolution to ensure Commonwealth Wind continues to move forward."

The second offshore wind project selected in the state's most recent procurement round, Mayflower Wind, has similarly said that economic conditions have made it much harder to finance its project than a year ago when it was selected. But Mayflower has said it remains committed to its project.

In its own filing with DPU on Thursday, Mayflower Wind asked that the DPU to extend the time in which it could file an appeal of its own for five more business days because DPU's contract approvals and Commonwealth Wind's appeal "directly and materially impact Mayflower Wind."

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