Three New England utilities will be sharing the energy produced by a new wind farm, which is expected to bring 185 megawatts (MW) to various areas around the region. The utilities involved have entered into agreements with SunEdison, who said they has finally received full financing for the Bingham Wind project.
"The Bingham wind farm is our largest wind project in Maine, and once completed should bring our total wind-generation capacity in the state to 552 megawatts," said Paul Gaynor, SunEdison executive vice president of the Americas and EMEA, in a statement. "SunEdison has made a major commitment in Maine's renewable energy future, and that commitment creates new local jobs and incremental tax revenues for the state, as well as long term stable and competitive electricity prices for rate payers. Bingham is a fantastic example of how good policies can create great economic and environmental results."
SunEdison has entered into three separate power purchase agreements (PPA) with utilities in the area: Eversource, National Grid, and Unitil. Each PPA was entered into under a 15-year term, and were awarded after a bidding process. The total output from the farm is expected to power more than 65,000 homes. During construction, the farm is expected to provide more than 400 local construction jobs.
Unitil's Massachusetts subsidiary, Fitchburg Gas and Electric (FGE), entered into two contracts with SunEdison's FirstWind in 2013. The power from the wind farm will be used by Unitil customers in Massachusetts as well as those around the wind farm.
"The flow of power is not specifically monitored and the power produced may be purchased by customers near the unit," Unitil spokesperson Carol Valianti told FierceEnergy. "Massachusetts customers pay for the power, but local customers may consume the power. When power prices are higher than the contract price, those customers will see a credit, and when prices are lower than the contract price, those customers will see a charge."
Valianti added, "The contracts were part of FGE's compliance with Massachusetts' Green Communities Act of 2008, as revised in 2012. The contracts were jointly negotiated by all of the investor owned utilities in Massachusetts as part of a solicitation process approved by the Massachusetts DPU. The contracts themselves were also approved by MDPU. FGE's contracts reflect a 1.0 percent pro-rata share of the projects (the larger Massachusetts utilities collectively contracted for the other 99 percent)."
Valianti explained that Unitil's renewable standards are, at this point, based on whatever public policy dictates. She explained that contracts were entered into for regulatory compliance purposes, which is required by legislation in Massachusetts.
She told FierceEnergy that, "under the legislation, the Investor Owned Utilities (IOU) receive 2.75 percent remuneration for payments under the contracts, however this amount is expected to be less than the amount of legal expense incurred to obtain approval of the solicitation process, approval of the contracts and compliance with ongoing reporting and rate setting requirements."
While that sounds like Unitil may be losing money, Unitil spokesperson Alec O'Meara further explained that Unitil is not quite sure yet to expect. The legislation was first passed in 2008, and updated in 2012, but Unitil's contract is new. The fees associated are upfront costs of securing the contract.
"Ultimately, the contract could also generate revenue over its lifetime, so... it is still too early to speculate on the final impact," O'Meara explained to FierceEnergy.
"Closely following the regulations as outlined in each of the states we serve is at the core of what we do," O'Meara said. "We work with the regulators to assure laws passed meet the needs of customers. I see this as an ongoing process, and we would continue to work with regulators as each component of a passed law takes effect."
The wind farm is on the Call Right Project List for TerraForm Power, SunEdison explained. Once the plant is in operation in late 2016, TerraForm Power plans to purchase it. SunEdison Services will be operating and maintaining the plant.
SunEdison has received $360 million in financing for the wind farm and generator lead, out of $420 million in a total construction cost.