New York's residential ratepayers will pay an average 73 cents more per month over the next 25 years for energy from two offshore wind farms that are expected to be operational by 2024, according to recently finalized contracts.
New York released on Wednesday the final costs for the Orsted Sunrise Wind project off Rhode Island and the Empire Wind project by Equinor planned for the waters 15 miles from Jones Beach and eastward. Harris said the state expects to issue another bidding request for offshore wind next year.
But a top state official said the cost of those projects will be lower for Long Islanders, largely because the Long Island Power Authority has contracted for a separate wind farm for the South Fork that will help offset the state bill. But all Long Islanders will have to pay $1.54 a month for the 130-megawatt South Fork wind farm when it becomes operational by the end of 2022.
That number doesn't include the cost of an ongoing grid upgrade on the South Fork to help accommodate the new power and effectively solve the Hamptons' energy shortage, which would cost another $2.48 cents a month, LIPA has said.
For the state projects, Long Islander's obligation could be "significantly less than the 73 cents," said Doreen Harris, vice president for large-scale renewables for the New York State Energy Research and Development Authority, which administered the process.
Harris said with the relatively low price for energy from the wind farms, "you can see why it made so much sense for us to go big" in contracting nearly 1,700 megawatts of energy, enough to power more than 1 million homes.
Harris stressed the state will pay only for power via special offshore wind credits delivered from the projects, and not foot the bill for construction or transmission costs. Equinor has said the cost to build its project is around $3 billion. An Orsted spokeswoman said, "We haven't disclosed that info."
The two state projects will offer energy at $83.36 per megawatt hour, a cost that is only slightly higher than what utilities pay for conventional power such as a natural-gas fired plant. The Orsted and Equinor projects have a power rating of 880 megawatts and 816 megawatts, respectively. "These prices would literally have been unthinkable a couple of years ago," Harris said.
The unredacted contracts and specific energy costs for the South Fork project haven't yet been released but are the subject of a ratepayer lawsuit.
Assemb. Fred Thiele (I-Sag Harbor) commended the state for releasing cost and other details of the Orsted and Equinor contracts, and suggested LIPA take a lesson from that release.
“It’s in stark contrast to LIPA and their refusal to make the South Fork contracts available to the public,” he said.
LIPA is expected to release those costs in coming days.
In a report detailing the costs and the finalized contracts of the Orsted and Equinor projects — considered the largest offshore wind awards in the U.S. — the state said it would establish New York as a "center of gravity" for the burgeoning offshore wind industry.
Gov. Andrew M. Cuomo announced the two offshore wind contracts this summer, part of a plan to infuse some 9,000 megawatts of offshore wind into the state power grid by 2035. State law now mandates a carbon-free grid by that time.
Harris said that while the wind-energy companies are responsible for preparing the grid for the new energy, the state's larger paradigm will mandate broader changes as wind becomes a larger component of the state's energy production. She said the agency is working with the Public Service Commission at a "number of new assessments of what the grid will look like" in the future.