Connecticut, reeling from electric rate complaints, a no-show in tri-state, offshore energy auction

Connecticut was conspicuously absent Friday when winners were announced in a groundbreaking, tri-state auction to select offshore wind developers who will provide energy to more than a million homes across southern New England.

The auction was run jointly by Connecticut, Rhode Island and Massachusetts in an effort to enable offshore wind farm developers, who have suffered from rising costs and supply chain constrictions, to save money by bidding larger projects across three states and reaching a broader market.

All three states solicited proposals from project developers after the joint effort was conceived a year ago. But only Massachusetts and Rhode Island announced Friday that they have chosen project developers based on those bids.

Connecticut officials, still experiencing political blowback from a surge this summer in the public benefit portion of customer electric bills , would not explain the state’s absence Friday. A brief statement by the state Department of Energy and Environmental Protection , which ran the state’s end of the bid solicitation, said Connecticut will act at some point.

“The Connecticut Department of Energy and Environmental Protection congratulates our sister New England states of Massachusetts and Rhode Island on the announcement today of their selection decision in response to our states’ coordinated requests for proposals for new offshore wind,” a department spokesman said. “The evaluation of project bids remains underway in Connecticut and we will announce a final decision in our solicitation at a future date.”

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A spokeswoman for Gov. Ned Lamont, who met in private with legislators and utility executives to discuss electric bills and policy Wednesday, said the administration is “still evaluating offshore wind bids.”

The project developers chosen by Massachusetts to produce, collectively, 2,678 megawatts of electricity for that state, were SouthCoast Wind, Vineyard Wind 2 and New England Wind 1, a venture of , parent company of Orange-based United Illuminating. Rhode Island chose to take an additional 200 Megawatts from SouthCoast Wind.

There were four bidders and the only one not chose was Danish multinational Orsted’s Starboard Wind. Orsted, which helped finance and operates locally from the rebuilt State Pier in New London, has already begun construction on additional wind projects in the wind lease area south of Rhode Island.

What was to have been simultaneous, three-state bid awards came at what turned out to be a politically unfortunate time for the Lamont administration, as state utility regulators continue to get thousands of complaints about a July increase in bills from customers and scores of political figures, most of them Democrats like the Governor.

The increase came in the public benefit portion of the bills that reimburses Eversource and United Illuminating for hundred of millions of dollars the state requires them to pay on social welfare, decarbonization and other so-called public benefit programs.

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Most of the July increase, or 78 percent, is the result of a power purchase agreement the state has with Dominion Energy that requires the utilities to buy electricity from the Millstone nuclear power station in Waterford. Under current state policy, if the state were to negotiate power purchase agreements with offshore wind energy providers, those costs, once operations begin in two to three years, would be included under public benefit billing, a utility executive said.

How much the energy contracts might cost remains confidential. The prices accepted by Massachusetts and Rhode Island were kept private and will remain so for months longer as contract parties negotiate and work out details. Connecticut officials would not disclose bid prices they received.

Several offshore wind projects were withdrawn after an earlier round of bidding when unexpected increases in construction costs made them unprofitable at the bid prices.

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Eversource customers currently are paying an average of about 8.9 cents per kilowatt hour. Before the bid announcements were made in Boston and Providence Friday, industry experts were speculating that wind prices could come in at double that rate or greater.

One of the topics discussed at the meeting Wednesday with Lamont, according to two participants, was a plan by the administration that would have the state commit to more offshore wind while, at the same time, Massachusetts “buys into” Connecticut’s contract with Millstone. Lamont’s office said details on the plan were not available.

Lamont announced he had signed the tri-state memorandum of understanding on offshore development during a visit a year ago to the State Pier in New London, where his administration spent about $300 million to convert the pier to an onshore support hub for outer continental shelf wind energy development.

He appeared against a backdrop of wind turbine components being prepared for installation south of Block Island by Orsted, which at the time was partnered with Eversource. The partnership picked up a third of the pier renovation cost and committed to a $20 million, 10-year lease. Eversource has since sold much of its interest in offshore development and expects to close soon on the remainder.

“We can go further when we work together, and I’m excited to be collaborating with our neighbors in Massachusetts and Rhode Island on this MOU, which opens up the potential for us to procure clean energy from offshore wind together at more competitive and affordable rates, for the benefit of the residents and businesses in our respective states,” Lamont said.

Under their agreement, governors of the three states said they want offshore wind developers to submit multi-state project proposals.

Any two or three states may agree to select a multi-state proposal up to each states’ procurement authority and split the anticipated megawatts and renewable energy certificates from a single project, according to the agreement.