State should pause on offshore wind

The proposed wind turbines to generate power for Long Island may be miles away and out of sight, but the current problems of getting them built are staring us right in the face.

On Thursday, the New York State Public Service Commission is expected to consider a request by offshore wind developers to open existing contracts to get more favorable financial terms. Without increased taxpayer subsidies, these giant energy firms say the current projects, expected to go online in a few years, are untenable. 

Given the many factors involved, the PSC should give pause to any action at Thursday’s meeting to see whether the accepted bids should be renegotiated or a new auction should take place. But the state regulatory board should not delay its decision by any more than a month or so.

The importance of adding renewable wind-power to New York's power generation mix must be the ultimate goal, especially given the clean-energy financial incentives provided by both the federal and state governments. Climate change is all too real and we must seek to greatly reduce our current reliance on fossil fuel. But state regulators and Gov. Kathy Hochul’s office also must protect the public’s financial interests. We were told clean energy would be cheaper, yet now international conglomerates want to maintain their high profits from our well-intentioned investment in alternative energy.

Orsted, the Danish wind-energy giant whose Sunrise Wind project would come ashore in Brookhaven, is asking for a 27% rate hike. Equinor, the Norwegian-based firm, wants even higher rate increases for three projects to be built south of Long Beach — all of them easily exceeding fixed rates spelled out in contracts decided before the pandemic. Since then, the companies say, they’ve endured escalating inflation, rising interest rates, and supply-chain delays that have compelled them to return to the PSC, hat in hand, asking for more money. Rising costs led Massachusetts, Rhode Island and Connecticut officials to walk away from similar wind projects rather than raise costs for ratepayers.

Various environmental, labor and business groups have urged the PSC to grant the rate increases, arguing that any delays or cancellations of projects would only cost the public more in future rates. Once online, they say, wind will provide electrical power at much lower costs despite current financial troubles in getting them built.

A clear-eyed analysis would recognize that the emerging wind-power industry is a struggling one. Orsted, for instance, recently lost a third of its stock value after disclosing cost troubles with its U.S. projects. Some industry problems are of its own making, the kind that the solar industry endured two decades ago until it became profitable.

For these reasons and more, a PSC pause is warranted to see whether renegotiating existing contracts for New York is possible before facing the prospect of starting the whole process anew.