Ørsted, US Wind skirmish over US Wind’s Maryland bids

Maryland Public Service Commission (PSC) has denied a Motion to Disqualify filed by Skipjack Offshore Energy, owned by Ørsted, against some of the proposals US Wind submitted in the state’s latest offshore wind application round. However, the process itself has not yet ended, as the Commission said it had not had the opportunity to hear from witnesses who were not scheduled to begin testifying until the evidentiary hearings commenced on 27 October.

In its latest offshore wind allocation round, the PSC received five proposals from the two developers, who already have projects in development in the state, with Skipjack Offshore Energy placing two new bids and three coming from US Wind.

Ørsted then filed the Motion to Disqualify against two of the three US Wind’s mutually exclusive bids that have two phases with the first wind farm proposed to produce electricity in 2026 and the second one in 2027 or 2028, arguing that US Wind’s Bids 2 and 3 do not meet the statutory requirement that offshore wind project proposals submitted during the Round 2, Year 1 application period begin creating offshore wind renewable energy credits (ORECs) no later than 2026.

Namely, back in 2019, Maryland passed a Clean Energy Jobs Act, which increased the state’s offshore wind energy requirements, calling for an additional offshore wind capacity of 1.2 GW to be procured from developers with projects near the state’s coast.

New offshore wind capacity is required beginning with at least 400 MW in 2026, increasing to at least 800 MW in 2028 and 1,200 MW in 2030.

Under the Act, the PSC must provide Round 2 application periods for Year 1 for projects coming online no later than 2026; for Year 2 for projects to enter operation no later than 2028; and for Year 3 for projects to come online no later than 2030.

Ørsted, which plans to add 760 MW to Maryland’s offshore wind capacity, now argues that there would not have been separate application periods if the Act intended to allow the consideration of a project proposed in the Round 2, Year 1 application period to also include projects that were to be considered in the Round 2, Year 2 application period.

In its response to this argument, US Wind contends that its application fits within the plain meaning of the statutory text, asserting that its Bids 1, 2 and 3 each propose projects that would begin creating ORECs no later than 2026 and that nothing in the statute requires that an applicant should create the entirety of its ORECs no later than 2026.

Furthermore, Ørsted claims that the price schedules included in US Wind’s Bids 2 and 3 that involve a project creating ORECs from 2027 or later fall outside the scope of applications the Commission is permitted to consider during the Round 2, Year 1 application period.

In the three applications submitted to the PSC, US Wind’s projects would begin creating 411.6 MW of ORECs by 2026, the company argues, with the second phase of the Bid 2 creating an additional 396.9 MW by 2027 and the second phase proposed in the Bid 3 creating an additional 793.8 MW by 2028.

The developer added that the legislative intent of the statute supported its application, since it outlined the requirement to ensure that “at least” 400 MW were put in operation by 2026, and that there would be additional capacity in operation by 2028 and 2030.

In its response, US Wind also argued that Skipjack’s motion required the PSC to consider factors outside the pleadings, such as legislative intent, and claimed a motion to dismiss that required the deciding body to consider matters outside the pleadings was converted into a motion for summary judgment. Such a motion cannot be granted at this stage of the proceeding, where there are disputes as to material issues of fact, US Wind said.

“Both Skipjack and US Wind made arguments based on legislative intent in their respective briefs and during oral argument, raising issues that go beyond the pleadings. Therefore, the Motion to Disqualify is better considered as a motion for summary judgment”, the PSC states in its decision to deny the motion, adding that it still has to hold the evidentiary hearings where witnesses are scheduled to testify.

“The Commission finds that it would be inappropriate to grant Skipjack’s Motion to Disqualify at this time. Skipjack’s Motion to Disqualify is therefore denied without prejudice. The parties may further address the factual and legal arguments raised in the Motion to Disqualify and responses during the October evidentiary hearings, and on brief, as appropriate”, the PSC concluded.