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Avangrid pushes back Vineyard Wind operational date, seeks tax credit extension from SNL Energy Finance Daily Avangrid pushes back Vineyard Wind operational date, seeks tax credit extensionByline: Jared Anderson Avangrid Inc. has pushed back by a year the operational date for its 800-MW Vineyard Offshore Wind Project offshore Massachusetts due to government-imposed permitting delays, company officials said Oct. 30, telling investors they are seeking a tax credit eligibility extension from the Internal Revenue Service. "Since the business case is being impacted by external delays, we are requesting an extension from the IRS for the originally planned [investment tax credits, or ITCs] of the project," Avangrid CEO James Torgerson said during the company's third-quarter 2019 earnings call. The U.S. Bureau of Ocean Energy Management, or BOEM, delayed the wind farm's final environmental impact statement because it determined it needed to file a supplemental environmental impact study to complete a revised cumulative impacts analysis of all regional offshore wind development activity, according to the investor presentation. The company initially expected to have the first 400 MW come online in 2021, which would have given the project a 24% ITC, and the second 400 MW come on in 2022, which would have provided an 18% ITC, Torgerson said. "So we are meeting with the IRS to talk to them about getting an extension since the basis for us not being able to get it done in 2021 is really because of the delays at the federal government," he said, adding that the company would like the 24% ITC to be available in 2022. Avangrid expects BOEM to complete the supplemental impact study by the end of this year or early 2020, and while there is no formal schedule, the company expects a final Record of Decision for Vineyard Wind by early in the second quarter of 2020, according to the presentation. Once the supplemental study goes out for public comment, it should take BOEM "a couple of months" to issue the final impact statement, Avangrid Renewables President and CEO Alejandro de Hoz said, adding, "This is the most critical part of the process and the one that is less clear in terms of timing." The target operational date is currently year-end 2022, subject to BOEM permitting clearance by early in the second quarter of 2020, the company said. "The IRS could potentially issue new guidance to extend the four-year window that projects have to enter operation after starting construction or meeting safe harbor requirements," said Jeff Berman, director of clean energy analysis with S&P Global Platts Analytics. "This would not require congressional approval, but would require the IRS under the Trump Administration to offer additional support for renewables development," Berman said. Vineyard Wind is a 50/50 joint venture between Denmark-based Copenhagen Infrastructure Partners K/S and Avangrid's Avangrid Renewables LLC subsidiary. Avangrid's majority stakeholder is Spain-based Iberdrola SA. Separately on Oct. 30, the Massachusetts Department of Energy Resources and the state's electric distribution companies selected the 804-MW Mayflower Wind Offshore Project in a competitive solicitation. Vineyard submitted a bid, but it was not selected. Mayflower is a Shell New Energies US LLC/EDPR Offshore North America LLC joint venture. New England Clean Energy Connect Avangrid also confirmed its $950 million, 1,200-MW New England Clean Energy Connect transmission project that would deliver hydropower from Quebec through Maine and into the Boston area remains on schedule. A permit approval from the Maine Department of Environmental Protection is expected in the first quarter of 2020, with a US Army Corps of Engineers approval 60 to 90 days after that. Approval from ISO New England is also expected in the first quarter of 2020. Approximately 60 days after those signoffs, the final step is a presidential permit for international border crossing, but that is not required to start construction, the company said. Construction is expected to begin in the second quarter of 2020, with commercial delivery by year-end 2022. Avangrid added 427 MW of wind and solar output executed under power purchase agreements year to date, has 562 MW under construction and expects to bring on an incremental 1,234 MW under contract expected to come into service in the 2020-to-2022 timeframe. Jared Anderson is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc. |
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