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Avangrid pulls plug on Park City Wind contracts; to pay $16.07M in termination fees
Hartford Business Journal|Andrew Larson|October 3, 2023
“After exploring all potential solutions to the financial challenges facing the project, and engaging in good-faith and productive discussions with Connecticut state officials regarding these challenges, it is clear the best path forward for Park City Wind is in the termination of the Power Purchase Agreements and a rebid of the project,” says the statement, issued at 7:41 p.m. ...According to filings with the Public Utilities Regulatory Authority, Avangrid will pay termination fees of $3.15 million to United Illuminating and $12.92 million to Eversource. Avangrid has asked for PURA's approval to terminate the PPAs.
“After exploring all potential solutions to the financial challenges facing the project, and engaging in good-faith and productive discussions with Connecticut state officials regarding these challenges, it is clear the best path forward for Park City Wind is in the termination of the Power Purchase Agreements and a rebid of the project,” says the statement, issued at 7:41 p.m. ...According to filings with the Public Utilities Regulatory Authority, Avangrid will pay termination fees of $3.15 million to United Illuminating and $12.92 million to Eversource. Avangrid has asked for PURA's approval to terminate the PPAs.
Avangrid announced late Monday that it will terminate its power-purchase agreements for Park City Wind, an 804-megawatt offshore wind project in Bridgeport.
The Orange-based company, which owns United Illuminating, said it had entered into agreements to terminate its contracts with electric distribution companies, according to the announcement.
“After exploring all potential solutions to the financial challenges facing the project, and engaging in good-faith and productive discussions with Connecticut state officials regarding these challenges, it is clear the best path forward for Park City Wind is in the termination of the Power Purchase Agreements and a rebid of the project,” says the statement, issued at 7:41 p.m.
The offshore …
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Avangrid announced late Monday that it will terminate its power-purchase agreements for Park City Wind, an 804-megawatt offshore wind project in Bridgeport.
The Orange-based company, which owns United Illuminating, said it had entered into agreements to terminate its contracts with electric distribution companies, according to the announcement.
“After exploring all potential solutions to the financial challenges facing the project, and engaging in good-faith and productive discussions with Connecticut state officials regarding these challenges, it is clear the best path forward for Park City Wind is in the termination of the Power Purchase Agreements and a rebid of the project,” says the statement, issued at 7:41 p.m.
The offshore wind farm, expected to supply about 14% of Connecticut’s electricity, is seen as pivotal to the state reaching its zero-carbon grid mandate by 2040. It was at one time expected to begin operations between 2025 to 2027.
According to filings with the Public Utilities Regulatory Authority, Avangrid will pay termination fees of $3.15 million to United Illuminating and $12.92 million to Eversource. Avangrid has asked for PURA's approval to terminate the PPAs.
Avangrid still owns the development rights for the project, a spokesman said Tuesday morning.
Earlier this year, Avangrid said inflation and high interest rates, on top of COVID, supply chain issues and the Russian invasion of Ukraine meant the project would require more financing than initially planned.
On Monday, it was reported that Avangrid took similar action in Massachusetts, terminating its contracts for Commonwealth Wind, a 1,232-megawatt offshore wind project. It will pay a $48 million penalty.
Also on Monday, the Massachusetts Department of Public Utilities gave SouthCoast Wind – a joint venture between Shell New Energies and Ocean Winds – approval to terminate its contracts with three local utilities. The agreement requires SouthCoast to pay $60 million in termination fees.
Avangrid, parent company of United Illuminating, is a subsidiary of Spanish energy giant Iberdrola Group.
Eversource Energy also recently stepped away from an offshore wind farm investment. In May, the Hartford and Boston-based electric company said it would sell its 50% interest in a wind farm 25 miles off the south coast of Massachusetts to Danish wind farm developer Ørsted for $625 million.