This represents an extension and expansion of a previous 15-year agreement between the two companies for energy from Peñascal I. CPS Energy more than doubled its power offtake from the project – increasing from 77 MW to 161 MW – and will now receive almost 80% of the power generated there.

Peñascal I was the first wind power project on the Texas coast, reaching commercial operations in 2009. It includes 84 turbines that generate a total of 202 MW.

“This is another great example of Avangrid working closely with our partners to continue delivering clean, reliable energy to customers,” said Pedro Azagra, Avangrid CEO. “In this case, we are growing our already strong relationship with CPS Energy to support their growing customer base while managing merchant risk at one of our existing wind facilities. Partnerships like this are critical to supporting a clean energy transition in Texas and beyond.”

“Growing our portfolio of renewable energy brings us closer to realizing our Vision 2027 goals,” said Rudy D. Garza, president and CEO of CPS Energy. “This expansion is an exciting step in our renewable energy commitments and is well-aligned with our approved generation plan.”

CPS Energy said the additional 84 MW of wind power supports its Vision 2027 plan that contemplates the retirement of 2,249 MW of older generation capacity before 2030. These efforts also align with CPS Energy’s commitment to the City of San Antonio’s Climate Action & Adaptation Plan (CAAP), which includes a resolution by the CPS Energy board of trustees to support the CAAP’s goal to become carbon neutral by 2050, and the interim goals of reducing greenhouse gas emissions by 41% from 2016 levels and 71% by 2040.

Iberdrola is acquiring the additional capital for $35.75 per share, according to a company announcement. The Avangrid Board of Directors has approved the transaction.

The $35.75 per share price represents a 11.4% premium over the closing price of Avangrid common stock on March 6, 2024, the last unaffected trading day prior to Avangrid’s announcement of receipt of Iberdrola’s unsolicited offer, and a 15.2% premium over the volume-weighted average price of Avangrid common stock over the 30 trading days leading up to the unaffected trading day.

Avangrid expects to continue paying regular quarterly cash dividends not to exceed $0.440 per share through the closing of the transaction, including a pro-rated dividend for any partial quarter prior to the closing. The transaction is expected to close in the fourth quarter of 2024, subject to closing conditions.

In March, Iberdola issued a non-binding “take-private” proposal to Avangrid to buy the remainder of its stock, of which it already owned 81.6%, for $34.25 per share coming to around $2.5 billion. Iberdrola said the objective of the transaction is to “increase exposure to the networks business in the United States at a key time for Iberdrola, which wants to grow in markets with high credit ratings and in regulated businesses such as networks.”

Headquartered in Connecticut, Avangrid currently has $44 billion in assets and operations in 24 U.S. states. Through its networks business, Avangrid owns and operates eight electric and natural gas companies, serving more than 3.3 million customers in New York and New England. Through its renewable energy business, Avangrid owns and operates a portfolio of renewable energy generation facilities throughout the United States. Today, the company has 8,000 employees.

The offer came after a bumpy year for Avangrid.

In January, Avangrid terminated a merger agreement with New Mexico’s largest utility, citing delays and lack of regulatory approval. Under the proposal, first announced in 2020, Avangrid would have acquired PNM Resources and its two utilities — Public Service Co. of New Mexico and Texas New Mexico Power. The all-cash transaction was valued at more than $4.3 billion and would have opened the door for Iberdrola and Avangrid in a state where more wind and solar power could be generated and exported to larger markets.

Last fall, Maine voters shot down a referendum that would have dismantled Central Maine Power, an Avangrid subsidiary, and Versant Power to create a nonprofit utility called Pine Tree Power to govern the grid.

The vote came amid intense criticism of Central Maine Power over its slow response to storm-related power outages, a botched billing system rollout, and perceived roadblocks to connecting renewable power projects to the grid, among other things.

In October 2023, Avangrid and Connecticut utilities agreed to terminate a long-term power purchase agreement for a Massachusetts offshore wind project citing economic conditions that left the project “unfinanceable,” according to the developer. Avangrid plans to rebid the 804 MW Park City Wind project, which had previously secured 20-year PPAs with Eversource Energy and United Illuminating. United Illuminating is an Avangrid subsidiary.

In July 2023, Avangrid agreed to pay $48 million to pull out of a PPA with Eversource Energy, National Grid, and Unitil for another offshore wind project, the 1,223 MW Commonwealth Wind located 20 miles south of Martha’s Vineyard.

The Board of Directors of Avangrid unanimously approved the agreement, which is subject to a number of customary conditions.

“We are excited about Iberdrola’s continued investment in Avangrid and commitment to the United States,” said Pedro Azagra, President and Chief Executive Officer of Avangrid. “As a wholly-owned member of the Iberdrola Group, we will continue to serve our customers and build our renewable energy assets work to achieve our vision to lead the clean energy transition with a strong commitment to sustainability, community, governance, and our employees.”

This article contains reporting from the Associated Press.

Originally published in POWERGRID International.

BOSTON (AP) — Massachusetts, Rhode Island, and Connecticut received proposals Wednesday for offshore wind projects as the three East Coast states hope to boost their reliance on the renewable energy source.

The three states joined in a historic agreement that allows for potential coordinated selection of offshore wind projects.

Massachusetts received bids from Avangrid Renewables, South Coast Wind Energy, and Vineyard Offshore in response to the region’s largest solicitation to date for offshore wind, seeking up to 3,600 megawatts.

Gov. Maura Healey’s administration “will review bids over the coming months, and coordinate with Connecticut and Rhode Island to evaluate multi-state projects that would increase benefits for the region, lower costs, and enhance project viability,” Massachusetts Energy Resources Commissioner Elizabeth Mahony said in a press release.

Rhode Island announced Wednesday that it will evaluate proposals from Avangrid Renewables, Orsted, SouthCoast Wind Energy, and Vineyard Offshore. It had requested proposals for approximately 1,200 megawatts of power.

Rhode Island acting Energy Commissioner Chris Kearns said the state looks forward to “reviewing the proposals with Rhode Island Energy along with Massachusetts and Connecticut state energy offices over the next few months.”

The Connecticut Department of Energy and Environmental Protection also announced Wednesday that it received proposals from four project developers under the multistate request.

Connecticut is seeking up to 2,000 megawatts of new offshore wind, which would add to the 304 megawatts of offshore wind power it will receive from the Revolution Wind project, which was jointly selected by Connecticut and Rhode Island and is now under development.

“We look forward to evaluating the submitted proposals received under this RFP over the coming months and coordinating review of any multi-state proposals received with Massachusetts and Rhode Island,” DEEP Commissioner Katie Dykes said.

The agency expects to announce in the third quarter of 2024 whether any projects have been selected.

Vineyard Offshore submitted a proposal for a 1,200-megawatt offshore wind project to the three states in response to their solicitation for up to 6,800 megawatts of offshore wind capacity.

“Vineyard Offshore knows how to deliver offshore wind to New England, and that’s by earning the trust of the communities we work in,” Vineyard Offshore CEO Alicia Barton said.

Ørsted announced it has submitted a proposal for a 1,184-megawatt Starboard Wind project, which would power more than 600,000 homes in Rhode Island.

Avangrid, Inc. submitted multiple proposals to the Massachusetts-Connecticut-Rhode Island solicitation for offshore wind power including New England Wind, representing two projects – the 791-megawatt New England Wind 1 project and 1,080 megawatt New England Wind 2 project.

Under the proposal, first announced in 2020, Avangrid would have acquired PNM Resources and its two utilities — Public Service Co. of New Mexico and Texas New Mexico Power. The all-cash transaction was valued at more than $4.3 billion and would have opened the door for Iberdrola and Avangrid in a state where more wind and solar power could be generated and exported to larger markets.

The utilities said the merger would have brought more than $300 million in benefits to PNM customers. PNM had argued the merger would provide it greater purchasing power to help move it closer to its carbon-free goals.

But the New Mexico Public Regulation Commission rejected the proposal in 2021, citing concerns about Avangrid’s reliability and customer service track record in other states where it operates. PNM Resources then filed a notice of appeal with the New Mexico Supreme Court.

Avangrid said the group needed to receive approval for the merger from regulators by the end of 2023. The company said Dec. 31 was the date that either Avangrid or PNM could terminate the merger agreement if it had not yet been finalized.

“There is still no clear timing on the resolution of the court review of the New Mexico regulator’s denial of the merger nor any subsequent regulatory actions,” reads an Avangrid company statement in-part.

“While our merger agreement with PNM has been terminated, we remain more than ever steadfast in our commitment to New Mexico in the development of wind and solar renewables, helping explore options in the new hydrogen economy, and delivering on the partnership with the Navajo Nation to achieve its clean energy future,” the company said.

PNM Resources said its Board of Directors had approved an extension beyond Dec. 31 that was not accepted by Avangrid.

“We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers, communities and shareholders,” said Pat Vincent-Collawn, PNM Resources Chairman and CEO. “As we move forward, our strategic plans remain focused on the infrastructure investments necessary to meet the future energy needs of our customers and communities.”

The developer of Commonwealth Wind in Massachusetts asked state regulators to dismiss their review of power purchase agreements tied to the 1,223 MW offshore wind farm.

Avangrid has cited economic conditions such as supply chain disruptions, inflation, rising interest rates and cost increases for offshore wind equipment. The company said the project “cannot be financed and built under the current PPAs.”

In asking Massachusetts regulators to pull the deal, Avangrid said it planned to re-bid the project in an upcoming solicitation in April 2023, the company said in a recent filing.

In late-October the developer asked the Massachusetts Department of Public Utilities (DPU) to rework the Commonwealth Wind PPA, which was signed in April.

AVANGRID requested a one-month delay to the PPA review process, which the company said would allow all parties to potentially agree to changes to the contract that would salvage the project. But since that time the company said Eversource Energy, National Grid and Unitil refused to renegotiate the agreements.

“As building Commonwealth Wind remains our objective, AVANGRID has been disappointed in the Electric Distribution Companies’ refusal to immediately engage on this matter,” said a statement from Avangrid.

The company said while incentives for clean energy included in the Inflation Reduction Act (IRA) could also impact the project, though AVANGRID said that IRA alone could not save Commonwealth Wind.

Commonwealth Wind, to be located 20 miles south of Martha’s Vineyard, was targeted to reach commercial operation in 2028.

Along with Copenhagen Infrastructure Partners, Avangrid is also developing the 800 MW Vineyard Wind 1 wind farm near Martha’s Vineyard and Nantucket. The project is on track to be complete in 2024.