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By Stephen Cunningham and Christopher Martin (Bloomberg) — If Vineyard Wind LLC can’t participate in New England’s annual power-capacity auction, it wants to stop the event until it can.
The developer of the first large-scale U.S. offshore wind project has asked the federal government to step in to halt the auction which started Monday or else nullify the results. That’s because the Federal Energy Regulatory Commission — the same agency it wants to intervene — has failed to rule on a December petition that would enable the company’s participation.
At issue is ISO New England’s annual auction which determines how much power generators will get paid for providing capacity in three years to 7.2 million retail electricity customers in six states. The closely watched event — held to ensure the grid has enough resources to meet estimates for future demand — can move share prices and provide a glimpse of long-term market direction.
“Asking FERC to halt an auction at this point in time would seem to me to be an unusual request, to say the least,” said Paul Patterson, a utility analyst for Glenrock Associates. “I don’t think such an action would likely have been taken lightly.”
Vineyard was one of three companies that bid a record $405.1 million to scoop up rights to build offshore wind farms near Massachusetts late last year. It says it needs to participate in the auction to obtain the most value for its renewable-energy supplies in the New England.
The grid operator and an association of market participants known by the acronym NEPOOL asked FERC in November to authorize a measure that would allow companies with offshore wind resources to participate in the auction. It also told Vineyard it would have to apply on its own for a waiver from some regulations, which it did on Dec. 14.
FERC approved the ISO New England and NEPOOL request on Jan. 29, according to the Vineyard filing, but it hasn’t yet acted on the company’s. A FERC spokesman declined to comment on Monday.
“FERC’s inaction” is “deeply concerning not only for Vineyard Wind but for the emerging U.S. offshore wind industry,” said Scott Farmelant, a spokesman for Vineyard.
Vineyard, a venture of Copenhagen Infrastructure Partners K/S and Avangrid Inc.’s renewables unit, wants to be able to capture the value of providing 800 megawatts of renewable energy through the auction, which can pay a premium over supplies from fossil fuels. And Massachusetts Governor Charles Baker wrote FERC in support of the company last week.
ISO New England is opposing Vineyard’s request and advised the company to wait until next year, when the renewable technology exemption it’s seeking will be available.
“The auction is already underway,” said Matthew Kakley, an ISO New England spokesman. “A delay would be unfair to the hundreds of other market participants.”
© 2019 Bloomberg L.P
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