February 8, 2021
Request for Public Comment on DRAFT Request for Proposals for Long-Term Contracts for Offshore Wind Energy Projects by the Massachusetts Distribution Companies & the Massachusetts Department of Energy Resources
Fitchburg Gas & Electric Light Company d/b/a Unitil (“Unitil”), Massachusetts Electric Company and Nantucket Electric Company d/b/a National Grid (“National Grid”), NSTAR Electric Company d/b/a Eversource Energy (“Eversource”), as investor-owned electric distribution companies (collectively, “Distribution Companies” and each as “Distribution Company”) serving ratepayers in the Commonwealth of Massachusetts (“Commonwealth”), in coordination with the Massachusetts Department of Energy Resources (“DOER”), plan to collectively seek reasonable proposals to enter into cost-effective Long-Term Contracts for Offshore Wind Energy Generation and associated RECs , which may include associated transmission costs, pursuant to Section 83C of Chapter 169 of the Acts of 2008 (“Section 83C”), as amended by the Energy Diversity Act.
This planned solicitation would be the third offshore wind energy solicitation and is part of a procurement schedule developed by the Distribution Companies and DOER in accordance with the authority granted to DOER under Section 21(a) of Chapter 227 of the Acts of 2018, and pursuant to the provisions of Section 83C, and regulations at 220 C.M.R. 23.00, to require the Distribution Companies to jointly and competitively conduct additional offshore wind generation solicitations and procurements, subject to the required solicitation and procurement process of said Section 83C, to ensure that the Distribution Companies enter into cost-effective contracts for Offshore Wind Energy Generation equal to an additional approximately 1600 MW of aggregate nameplate capacity not later than December 31, 2035. [Footnote: This is based on current statutes as of posting on February 8, 2021.] The solicitation method and timetable are subject to the approval of the Massachusetts Department of Public Utilities (DPU), and the Distribution Companies will make the appropriate filing with the DPU following submittal and evaluation of the comments requested here.
Request for Comment
The drafting team, consisting of the Distribution Companies and DOER in consultation with the Attorney General’s Office and overseen by an Independent Evaluator, is seeking public comment on this draft Request For Proposal (referred to as “draft RFP” or “RFP”). This draft RFP for which public comment is sought includes the main RFP text and selected appendices; all other appendices, including the Bidder Response Form, are still being developed. The draft RFP is presented in both a “clean” version and a “redline” version that shows changes against the prior solicitation issued in the 83C Round 2 solicitation on May 23, 2019. A summary of the proposed substantive changes is included below.
Stakeholders are invited to submit written comments via email to MARFP83C@gmail.com by Thursday, February 25, 2021 at 5pm. Stakeholders are welcome to comment on any aspect of the draft RFP regardless of whether they have been modified since Round 2.
The RFP drafting team will publish all stakeholder comments received in response to this request at the website MACleanEnergy.com. The RFP drafting team will review all stakeholder comments received and may make responsive changes prior to submitting the RFP to the Department of Public Utilities for approval pursuant to Section 83C.
Please note that the draft RFP in its entirety, including any appendices, are still under review by the RFP drafting team and subject to change, and this request for comments does not commit the RFP drafting team to either respond to or implement any comments received.
Summary of Proposed Changes (subject to MA DPU Approval)
1. Solicitation Target and Allowable Bid Size: The Distribution Companies are seeking to procure at least 400 MW and up to 1600 MW of offshore wind energy generation. The solicitation will allow bidders to offer proposals from 200 MW up to approximately 1600 MW. There is no preferred bid size, and the size of the project that a bidder proposes should be optimally sized to efficiently use available lease area, maximize use of the interconnection point, and minimize the footprint of transmission cabling and other infrastructure.
2. Proposed Solicitation Schedule:
|Issue RFP||May 7, 2021|
|Bidders Conference||May 18, 2021|
|Deadline for Submission of Questions||May 25, 2021|
|Due Date for Submission of Confidential Proposals||Sep 16, 2021|
|Due Date for Submission of Public Proposals||Sep 23, 2021|
|Selection of Projects for Negotiation||Dec 17, 2021|
|Negotiate and Execute Long Term Contracts||Mar 28, 2022|
|Submit Long Term Contracts for DPU Approval||Apr 27, 2022|
3. Price to Beat: The price cap for the Round 3 solicitation is found in section 184.108.40.206.i.a.. National Grid has included in the attached RFP an alternative proposal that would apply to all proposals only if approved by the DPU. The timetable and method of solicitation is subject to review and approval by the DPU.
Regardless of the price to beat approved by the DPU, the RFP drafting team expects that proposals will reflect the benefit, in the form of lower prices for Massachusetts customers, of the recent increase in the federal Offshore Wind Energy Investment Tax Credit.
4. Other Pricing Requirements & Phasing: For phased projects under multiple contracts, the nominal levelized price per MWh must be the same across all phases. Also, the minimum pricing for RECs as a percentage of total price is being reevaluated and will be specified in the RFP filed with the DPU. Provisions regarding allowable phasing have been modified to be consistent with allowable bids being increased to 1,600 MW.
5. Deliverability: All bidders must perform additional technical analysis to identify potential deliverability constraints. This additional analysis is defined in draft Appendix I to the RFP and will not require bidders to identify solutions or additional network upgrades.
6. Commitment Agreement: All bids submitted must include a commitment to enter into a Voluntary Agreement (see the Commitment Agreement as provided as draft Appendix G).
7. Economic Benefits to the Commonwealth: The draft RFP includes additional detail on economic development factors to be considered in the Qualitative Evaluation section, including criteria regarding employment benefits, diversity, workforce development, supply chain, port investments, and research and innovation. The draft RFP also clarifies that the relative merits of proposals with additional benefits, including economic benefits, will be considered in Stage Three of the evaluation.
8. Site Control: The provisions applicable to site control in the draft RFP have been clarified relative to the Round 2 RFP.
9. Clean Peak Standard: Bids will be evaluated on their ability to produce and supply Clean Peak Energy Certificates (CPECs) to meet customer needs, as defined in the Clean Peak Standard regulations (225 CMR 21.00).
10. Environmental & Socioeconomic Impacts: The draft RFP includes a new Appendix J that details criteria to be considered for Environmental and Socioeconomic Impacts from Siting in the qualitative evaluation. These criteria pertain to impacts on the environment, wildlife, commercial and recreational fishing, and environmental justice populations.
In addition to these proposed changes from Round 2, National Grid plans to propose a provision in its Form PPA for negotiation in good faith of a separate agreement after the term of the PPA under which the Seller gives National Grid, at its option, first rights to procure Environmental Attributes at market value. A draft of this provision is included in the 83C III Documents section of the MACleanEnergy.com website as “National Grid Proposed PPA Provision”.
July 28, 2020
In a letter to the Joint Committee on Telecommunication, Utilities and Energy, the Department of Energy Resources (DOER) recommends that for the next offshore wind solicitation, Massachusetts distribution companies jointly and competitively solicit and procure proposals for offshore wind energy generation and transmission up to 1,600 MW.