“Higher interest rates, increased costs of capital and supply chain expenses, as well as the uncertainty of federal tax credits, all likely contributed to higher proposed contract costs,” said the utility, Rhode Island Energy, in a press release. “Those costs were ultimately deemed too expensive for customers to bear and did not align with existing offshore wind power purchase agreements.”
Those same cost factors are wreaking havoc in Massachusetts. Two major offshore wind developers in Massachusetts are terminating their power purchase agreements with the state’s utilities because the developers say the agreements, hammered by inflation, interest rate hikes, supply chain disruptions, and the war in Ukraine, are no longer sufficient to secure financing for their projects.
The developers hope to rebid the contracts in the state’s next procurement in 2024, presumably at much higher prices. The decision by Rhode Island Energy could foreshadow the pricing Massachusetts might see next year.
