As waters off the Vineyard begin to attract strong interest among wind energy developers, legislation now before Massachusetts lawmakers would spur significant changes in the way local consumers buy power from renewable energy sources.
H.2881, an Act to Promote Energy Diversity, would give cities and towns more control over contracting and pricing, and reduce the region’s dependence on fossil fuels, backers say. It also could determine whether offshore wind development projects planned in federal waters about 12 miles south of the Island will ever be built.
The bill would require public utilities such as Eversource Energy (formerly NStar) and National Grid to increase the amount of renewable energy they distribute to Massachusetts energy consumers. Now before the Joint Committee on Telecommunications, Utilities and Energy, the bill covers several energy sectors, including solar energy, hydro power, natural gas and wind power.
The wind component of the bill would require utilities to purchase 2,000 megawatts of power generated from wind, with a deadline of 2030 to reach that level.
Richard Andre, president of Vineyard Power, the Island energy cooperative, called the legislation a “make or break” factor in the development of up to four tracts of ocean auctioned off by the federal Bureau of Ocean Energy Management in the past two years.
Vineyard Power, in partnership with the New Jersey developer Offshore MW, bid successfully for one of the tracts in January, paying $166,000 for the right to lease just over 166,886 acres. Mr. Andre said the pending legislation would create a market for wind energy.
“You need a customer,” he said. “You might have the money to build a [wind] power plant, but you’re not going to spend the money unless you have a customer.”
He said without the backing of the state, the Offshore MW project is not likely to move forward.
“Offshore MW is probably not going to hold onto its federal lease, because there would be no customers,” he said. “They have to pay $500,000 a year for that lease. We wouldn’t have an offshore wind partner for several years, at least. It’s fair to say it’s make or break.”
Another tract of federal water, abutting the one leased by Offshore MW and Vineyard Power, went to RES America Developments in the January auction. In July, Dong Energy, a European-based company, acquired the lease from RES and announced plans to enter the U.S. energy market.
The Dong project made headlines this week in regional newspapers as it offered more details of its plans.
“Massachusetts is a really exciting opportunity for offshore wind,” said Thomas Brostrøm, general manager of Dong’s newly-created North American subsidiary, based in Boston. The company said it plans to develop a wind turbine facility that would produce up to 1,000 megawatts of power, enough to supply electricity to 500,000 homes.
The offshore area designated for wind development, following a federal regulatory process of public hearings on Martha’s Vineyard and elsewhere, has generated little of the opposition that stalled Cape Wind, the wind farm planned for Horseshoe Shoal, about nine miles northwest of the Vineyard. That project has faltered.
Earlier this year National Grid and Eversource Energy cancelled long-term contracts to buy power produced by Cape Wind. The company missed a planned May 1 deadline to begin construction.
By contrast, developers that have come onto the scene recently say wind turbines in the offshore tracts will be barely visible from the Vineyard.
“The technology has changed so much,” said Cape and Islands Rep. Tim Madden. “The size of the turbines, they are more efficient. I’ve heard very little opposition. It’s largely about vistas.”
State officials are working with some urgency to lock in new sources of energy in the near future due to an anticipated reduction in generation capacity in New England.
The owners of the Brayton Point power plant in Somerset, which has a capacity of more than 1,500 megawatts, recently announced plans to shut down that plant in 2017. The owners of the Pilgrim Nuclear Power Station in Plymouth, with a capacity of nearly 700 megawatts, plan to close that facility in 2019, or possibly sooner.
Meanwhile, another bill now under consideration on Beacon Hill could give local communities greater control over buying energy.
H.2895 is an act to promote long-term renewable contracts for municipal aggregators and municipalities. Known informally as the community empowerment bill, it is also before the Joint Telecommunications,Utilities and Energy Committee. Mr. Andre and Vineyard Power Cooperative general manager Erik Peckar testified in support of the bill before the committee earlier this month.
Mr. Madden submitted the legislation on behalf of the cooperative. The bill would amend current law to allow local governments to make their own long-term agreements with renewable power producers, for the benefit of local consumers.
Mr. Andre said the bill would give local governments a way to vote, through an open process of public hearings and a town meeting article, to buy power on their own. The legislation would require public utilities to bill for the cost of the power through their current billing system.
“We would be on our way to having a ratepayer-owned utility,” Mr. Andre said.
He said the bill has gained support because it does not mandate any program, does not rely on subsidies and requires no specific technology.
He cited examples of how the arrangement might work.
“The residents of Oak Bluffs or Tisbury would maybe own a portion of a solar array located in West Tisbury, or located somewhere else, and they would get all the benefits,” he said. “When you look at Offshore MW, they build a 500-megawatt wind farm, maybe through community empowerment, we would own 10 megawatts.”
Mr. Andre said one key advantage is the ability to lock in a fixed price for power.
“Renewable energy developers can enter into long-term contracts, where other generators can’t do that, they’re too volatile,” he said. “The price of raw materials doesn’t change. It’s the sun. What renewable energy developers can do is offer a fixed price for a long period of time.”
The legislation would allow a community to contract for a mix of renewable and conventional sources of power.
Mr. Madden said other legislators at the statehouse are receptive to the bill.
“It provides a local option,” he said. “It will allow an organization with financing [like Vineyard Power] . . . . to go to a lending institution with someone behind them . . . . There’s a provision for people to opt out. That kind of latitude made it something I was comfortable with.”
State Sen. Dan Wolf also supports the community empowerment bill. He said though the bill has not yet attracted wide attention among lawmakers, he has not yet encountered any opposition.
“It’s really about giving local control to folks on the Vineyard, and allowing them to benefit rather than investors that are not nearby,” he said.
Lawmakers on Beacon Hill are still working out strategy for bringing the legislation to a vote. Most expect a bill dealing only with solar energy to be reported out of committee for floor action this year. An omnibus energy bill dealing with all other renewable technologies will not see action until early in 2016. The community empowerment bill sponsored by Mr. Madden is also expected to see action early next year.
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