Mayflower wind “low cost energy” price anticipated to go even lower due to unique commitment to pass cost savings of federal tax credits to customers

This price reduction likely means that the customers of three Massachusetts electric utilities can expect to save over $25 million each year, resulting in a half a billion dollars in lower electric bills over the life of the 20-year contracts due to recent changes in federal law.

The savings would come from the newly increased and extended federal Offshore Wind Energy Investment Tax Credit in the recently enacted federal legislation that brought together an omnibus spending bill and comprehensive taxation and energy bill. These credits are eligible to offshore wind project developers. However, in anticipation of potential regulatory changes at the time of the original bid, Mayflower Wind committed to convert the value of those credits into a price reduction for the electricity customers of Massachusetts. Mayflower Wind’s contracts to provide low cost wind energy have been approved by the Massachusetts Department of Public Utilities, however that approval is currently on hold pending consideration of a motion filed by the Attorney General’s Office to reconsider the compensation of the utilities.

“The Baker-Polito Administration is pleased that due to commitments included in the contract negotiated with Mayflower Wind, their project is now on course to provide Massachusetts residents with significant clean offshore wind energy at an even lower rate, continuing to prove that climate action can be cost-effective,” said Energy and Environmental Affairs Secretary Kathleen Theoharides. “Offshore wind is critical to meet our net zero emissions commitment by 2050 and is an incredible opportunity for economic development in the Commonwealth, so we are grateful to the Massachusetts congressional delegation for their work to expand the federal Offshore Wind Energy Investment Tax Credit.”

Mayflower Wind CEO Michael Brown said, “Mayflower Wind creates environmental and economic value. We are proud of this consumer savings provision of our bid. The work we have done to embrace the federal tax credit program is putting us on a trajectory to lower our price and increase our value to customers.” Brown added, “We look forward to speedy resolution of the Attorney General’s pending motion and concluding the process of locking in this benefit to the customers.”

In October 2019, Mayflower Wind was selected by the Commonwealth’s electric distribution companies to provide 804 MW of offshore wind energy. According the Baker-Polito administration, during the bid process, Mayflower Wind proposed wind energy at a more competitive price with greater economic development opportunities for the Commonwealth and the South Coast than any other bidder.

Mayflower Wind’s record low price of $77.76 per megawatt hour, which was selected in that procurement process, should drop to $70.26 due to this change in federal law and Mayflower’s promise to rebate this value of federal tax credits written into the contracts with National Grid, Eversource, and Unitil, which were approved by the Massachusetts Department of Public Utilities on November 5, 2020 and are the subject of the pending motion by the Attorney General. Mayflower Wind expects to start generating power in the mid-2020s.