Power companies in Massachusetts have filed with the MA Public Utilities Commission for approval of power purchase agreements with major wind farms in Maine and New Hampshire at an average wholesale price of 8¢ per kilowatt hour.
The state’s biggest utilities, in a milestone for New England’s wind power industry, have signed long-term contracts to buy wind-generated electricity at prices below the costs of most conventional sources, such as coal and nuclear plants.
The contracts, filed jointly Friday with the Department of Public Utilities, represent the largest renewable energy purchase to be considered by state regulators at one time. If approved, the contracts would eventually save customers between 75 cents and $1 a month, utilities estimated.
“This proves that competitively priced renewable power exists and we can get it, and Massachusetts can benefit from it,” said Robert Rio, a spokesman for Associated Industries of Massachusetts, a trade group that represents some of the state’s biggest electricity users.
The utilities — National Grid, Northeast Utilities, and Unitil Corp. — would buy 565 megawatts of electricity from six wind farms in Maine and New Hampshire, enough to power an estimated 170,000 homes.
These contracts illustrate the fact that we are now moving into the post-fossil fuel phase of electricity generation in the US. Note first that this a purchase of power from New England wind farms by New England power companies. Transmission costs are minimal for this power, because it is produced within the region where it will be used.
The important feature of the transactions, however, is that these power companies are able to lock in long term low prices because wind power has no fuel costs. We are entering a period in which natural gas prices have begun to rise. Here is WV, the starry-eyed coal idealists are predicting a resurgence of coal-fired electricity. Ain’t gonna happen.
What we will see is wind power and solar power steadily expanding in power company generation portfolios at an increasing rate. This trend has been growing over the last few years, but it will accelerate as coal exports to Asia grow and gas prices rise. Power companies won’t go back to coal, they will move forward to lower cost, and highly predictable, wind and solar power. Coal and gas will remain in the mix, but their percentages will continue to fall as their role becomes one of filling in during off peak renewable generation.