EVERSOURCE, New England’s largest utility, said on Thursday that it plans to exit the offshore wind business and write down the value of its holdings by $220 million to $280 million.
The utility said it is selling its 50 percent stake in an undeveloped 175,000-acrea lease area 25 miles off the coast of Massachusetts for $625 million in cash to its original partner on the deal, Orsted. The company also said it plans to sell its 50 percent stake in three other wind farms — South Fork Wind, Revolution Wind, and Sunrise Wind – by the end of June. Orsted is Eversource’s 50-50 partner on all three of those projects as well.
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Eversource said it believes an “other-than-temporary impairment exists” on the company’s offshore wind business, which will result in a reduction in earnings of
$220 million to $280 million.. The company said its estimate of the fair value of the offshore wind business is based on the anticipated potential sales price of Eversource’s 50 percent interest of the three contracted projects, as well as the $625 million sale of the uncommitted lease area.
“While we are pursuing an exit of the unregulated offshore wind business, Eversource is fully committed to being a catalyst to the region’s clean energy transition, with our regulated companies building many of the facilities that will enable more than 9,000 megawatts of offshore wind generation to reach the homes and businesses of Southern New England,” said Joe Nolan, Eversource’s president, CEO, and board chair.
The impairment suggests just how tough financially the offshore wind business is right now. Avangrid and South Coast Wind have both indicated they need to get out of contracts they signed last year with ratepayers in Massachusetts because of changing economic conditions. Eversource’s regulated utility in Massachusetts, which helped negotiate the contracts, has refused to budge on the terms.
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