In most U.S. states, laws require utilities to include a specified amount of renewable power in the energy mix they sell customers. These renewable portfolio standard (or RPS ) laws vary from state to state in their details, but vertically-integrated can often satisfy the RPS by entering into contracts to buy power from specific renewable projects. For example, Massachusetts' largest utility National Grid plans to buy half of the Cape Wind offshore wind project's output to comply with the RPS.
On Friday, Massachusetts regulators approved an array of wind energy contracts proposed by the Commonwealth's second-largest utility, NStar. The state Department of Public Utilities has been considering contracts between NStar and three wind projects:
- Iberdrola's 29 megawatt Hoosac Wind project, in the Berkshires of Massachusetts, should be running July 2012, a ten-year deal
- Iberdrola's 48 megwatt Groton Wind project near Plymouth, New Hampshire, should be running December 2012, a ten-year deal
- First Wind's 32 megawatt Blue Sky East project in Eastbrook, Maine, should be running by May 2012, a fifteen-year deal
While the agreements' pricing remains confidential, some aspects of the pricing are known. NStar conducted a competitive bidding process to select the projects for contracting; NStar's process is said to have emphasized getting the lowest price. It is also public that the three contracts approved on Friday are for fixed prices, meaning that unlike escalating price contracts, the price the utility pays the wind developers per kilowatt-hour will remain flat over the contracts' terms.