October 16, 2023 — New York State has put its ambitious plans for offshore wind energy in jeopardy after it declined requests from larger developers to renegotiate their power purchase agreements increasing rates to reflect current market conditions. The decision follows similar situations that have emerged in both Massachusetts and more recently Connecticut which are also threatening projects, while New York and New Jersey officials also continue to seek to push forward with the plans for offshore wind energy.
The decision of the New York State Public Service Commission on Thursday has set off a new round of industry fears. The price of the stocks of developers Ørsted and Equinor both were driven sharply lower on the news while the companies only said they would be forced to re-examine several projects. Ørsted’s stock price is now down by more than half from its 52-week high, falling nearly an additional nine percent for its U.S.-based depository receipts on Friday. While many other stocks in the sector were down today, Equinor rebounded closing the day up more than two percent.
The NYSPSC set off the concerns by announcing it had denied petitions from Empire Offshore Wind and Beacon Wind, being developed by Equinor and BP, and Sunrise Wind, being developed by Ørsted. Each of the petitions had requested an order from the commission that would have directed the New York power regulator New York State Energy Research and Development Authority (NYSERDA) to incorporate an adjustment mechanism into existing Renewable Energy Credit and the offshore wind power purchase agreements. The companies cited the impact of inflation and cost increases due to supply chain and other issues, which they say have combined to change the financial viability of the projects.