New York’s state government rejected requests from offshore wind energy developers, dealing a blow to the White House’s climate plans.
New York’s state government rejected requests from offshore wind energy developers who asked to re-negotiate contracts amid elevated inflation and rising costs.
The state denial could force some developers whose contracts may not cover project costs to scrap plans to sell power to customers in New York and cancel or delay projects, as happened with some offshore wind projects in Massachusetts. Developers were looking to renegotiate contracts on four offshore wind and 86 land-based renewable projects.
Construction of renewable projects is key to the climate-related agenda of President Joe Biden’s administration and several states, including New York, in their attempts to rely more on alternative sources of energy other than oil and gas. Developers sought to renegotiate the contracts to include inflation adjustments, among other cost increases, because some agreements no longer cover the rising cost of building and financing projects in the current high inflation and high interest rate environment.
The New York State Public Service Commission (NYPSC), the state’s main regulator over utilities, rendered its decision rejecting the firms last week and said that it wants to “preserve the robust competitive bidding process that provides critically needed renewable energy resources to New York.”
“The requested amendments to the contracts would have provided adjustments outside the competitive procurement process; such relief is fundamentally inconsistent with long-standing Commission policy,” Commission Chair Rory Christian said in a statement.
“The Commission has repeatedly stated that competition in the procurement process is necessary to protect ratepayers and provides the soundest approach to mobilize the industry to achieve our critical State goals dependably and cost-effectively, and we do so again through today’s action,” Mr. Christian continued.
The request would have led to a 6.7 percent increase in residential utility costs and 10.5 percent for commercial customers on their monthly bills, state officials said. The companies that filed the petition include Empire Offshore Wind LLC, Beacon Wind LLC, Sunrise Wind LLC, and the Alliance for Clean Energy New York.
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