Here’s a webinar on FERC market pull incentives for marine hydrokinetics and other small renewables. It’s 50 minutes in length and you can access it at this link. If you have any questions about the webinar or you’d like to contact me about a live workshop for your company or a copy of the slide deck, please email me at email@example.com
The latest injection of financial support for offshore renewables is coming from an unlikely and overlooked source: electric utility mergers. In February 2012, the offshore wind industry reaped substantial benefits from two utility mergers. In Maryland, the state’s offshore wind development fund will pick up $32 million courtesy of Maryland Public Service Commission order issued in February 2012 approving a merger between Exelon and Constellation Energy that includes a commitment to fund offshore wind. Meanwhile, just up the East Coast, Massachusetts extracted an agreement from NStar Utilities to sign a 15-year contract with Cape Wind to purchase27.5 percent of the project’s output as a condition of state approval for its acquisition of Northeast Utilities. NStar’s purchase along with a previous purchase by National Grid means that 77 percent of Cape Wind’s capacity is spoken for, which should lay the groundwork for Cape Wind’s financing.
So how do offshore renewables come into play in merger proceedings? Actually, on the federal level, offshore renewables aren’t all that relevant in merger approval proceedings at the SEC or FERC. Both of those agencies focus on largely financial issues such as anti-competitive impacts, economies and efficiencies and rates.
But the situation is different at the state level. For starters, state utility commissions have more at stake when a local utility like BGE or Northeast Utilities is gobbled up by a behemoth company halfway across the country or even overseas. These types of acquisitions can result in the departure of jobs and tax revenues, and diminish states’ regulatory control over the newly merged company. For that reason, states will often play hardball in merger proceedings to extract the best possible benefits from companies to offset potential losses and to mitigate adverse impacts. [click to continue…]