Trump’s shadow looms as offshore wind price negotiation deadline missed

NEGOTIATORS WORKING on contracts for two new offshore wind farms off the coast of Massachusetts say they need more time to strike a deal, yet another sign that President Trump’s anti-wind philosophy is wreaking havoc with the state’s energy plans. 

The price negotiations between the state’s utilities and the offshore wind developers, Avangrid and Ocean Winds, were scheduled to wrap up on Monday, but they couldn’t reach a deal in the allotted time and set a new deadline of June 30. Under the updated timeline, the contracts won’t become public until August 25.  

The latest delay was the second time since Trump was elected that the two sides have failed to meet a deadline and contract negotiations had to be extended. 

Officials for all the parties declined to comment on the cause of the holdups, but a spokeswoman for the Healey administration indicated Trump’s opposition to offshore wind is making it difficult to reach a deal.  

“Federal policy is an important factor in these projects and the parties are working to gain greater certainty before finalizing the contracts,” said a statement issued by Lauren Diggin, a spokeswoman for the state Department of Energy Resources. 

Sources say the offshore wind developers want financial protections if Trump throws roadblocks in front of their projects, while the state’s utilities, acting as proxies for the Healey administration, are wary of accepting provisions that could drive up costs, particularly at a time when public anxiety about the volatility of electric rates is rising.  

The stakes are high. The Healey administration’s climate strategy hinges on electrifying the housing and transportation sectors, but that will only succeed in lowering greenhouse gas emissions if the electricity being used is generated without fossil fuels. Offshore wind was a key piece of Healey’s strategy, but the industry is facing an existential crisis with Trump, who has vowed to block the construction of any new wind farms. 

Avangrid and Ocean Winds had to terminate earlier wind farm projects in 2023 after interest rates and inflation soared in the wake of Russia’s invasion of Ukraine, driving up costs and making the projects untenable under the previously approved contract prices. Ocean Winds paid a fine of $60 million to void its SouthCoast Wind deal and Avangrid paid $42 million to terminate its project with the state’s three utilities. 

Neither wind farm developer wants to go down that road again. The companies, dealing with skittish investors, are believed to be seeking much higher prices for their power as well as assurances that prices could be adjusted if circumstances change because of Trump administration policies. The Environmental Protection Agency, for example, this month voided a previously approved permit for a wind farm off the coast of New Jersey, stopping the project in its tracks. 

Rebecca Ullman, the director of external affairs for SouthCoast Wind, said during a panel discussion hosted by State House News Service on March 26 that the uncertainty heightens the risk of offshore wind projects. “It’s hard to overstate how impactful the Trump administration has been on investor confidence in offshore wind,” she said. 

Connecticut initially planned to procure offshore wind power in partnership with Massachusetts and Rhode Island, but in December Gov. Ned Lamont said he was dropping out of the tri-state procurement process because he believed the price of the electricity was going to be too high. He said he was shifting his state’s focus to solar and energy storage projects.  

Lamont’s decision derailed one proposed offshore wind project, but Massachusetts and Rhode Island chose to proceed with two others. Now the utilities negotiating on behalf of the states are having difficulty striking a deal that works for both sides. 

Ullman called it “unprecedented times” and added: “There is no playbook for this.” 

Complicating the negotiations is rising consumer anxiety about utility bills. Healey has responded with a number of short-term initiatives to bring down utility bills, including lowering assessments for energy efficiency measures and using solar subsidy money to fund a $50 discount on April bills. She has also promised to introduce a discount for moderate-income customers similar to one that exists for low-income customers. Such discounts are funded by higher assessments on other customers. 

Healey is preparing to file energy affordability and independence legislation in the coming weeks. Details of the bill haven’t been released yet, but it appears her goal is to lower the coat of utility bills while increasing home-grown energy production from solar and wind.  

The governor has insisted that offshore wind will lower electricity costs, but the difficulty in negotiating pricing deals with offshore wind developers indicates that is proving more difficult than expected. 

At the March 26 panel discussion, Rebecca Tepper, Healey’s secretary of energy and environmental affairs, said the state going forward will focus on energy projects under its control, including solar and energy storage, while not giving up on offshore wind.  

“We’re going to produce energy here that is going to power our economy, not someone else’s,” she said. 

Tepper didn’t sugarcoat the challenges ahead with offshore wind under the Trump administration. “There is no denying we have a rough couple of years ahead of us,” she said. 

Sen. Michael Barrett of Lexington, the Senate chair of the Legislature’s joint energy committee, said he is also adjusting his mindset. Offshore wind is dormant but not dead, he said, noting that he’s shifting his focus to solar, particularly ground-mounted solar. 

“I do not think Plan A – offshore wind – is dead, and I think we should double-down on Plan B – solar,” he said.