Eversource Energy and Ørsted’s joint offshore wind development venture signed a long-term agreement Friday with the city of New London, Conn., to facilitate the modernization efforts at State Pier to support turbine staging and assembly.
The Host Community Agreement between the city and developers guarantees at least $5.25 million for New London in payments over seven years during the construction of the Revolution Wind, South Fork Wind and Sunrise Wind projects, according to a press release from Connecticut Gov. Ned Lamont. If Eversource/Ørsted wins OSW procurement bids from Connecticut, the city could receive up to an additional $1.5 million per year, retroactive to year three of the deal.
The agreement was more than a year in the making and built on a $157 million public-private Harbor Development Agreement announced in February 2020 between Connecticut and Eversource/Ørsted, which is expected to pay about half of the project’s price tag plus millions in rent during its 10-year lease. The three OSW projects represent more than 1,700 MW, including 304 MW procured by Connecticut through Revolution Wind. Connecticut has called for its electricity supply to be 100% decarbonized by 2040. (See IRP Details Conn.’s Paths to Carbon-free Future.)
The State Pier site actually consists of two piers that will be conjoined under the HDA. According to the Connecticut Port Authority’s website, “the facility will accommodate a broad range of cargo types” after the OSW developers’ lease agreement is up. The infrastructure upgrades will increase the pier’s capacity to accommodate heavy-lift cargo and maintain its freight rail link. Construction is expected to be completed by August 2022. The wind developers and operator Gateway Terminal will also help the state market the port’s use during times when turbine construction is not occurring.
If Eversource/Ørsted continues operations at State Pier beyond the initial 10 years under the HDA, the HCA provides an option to negotiate additional payments. As for the completion of the wind projects, Eversource said during its year-end earnings call on Feb. 17 that South Fork Wind has an in-service date of 2023. All the review process steps for the project have either been met on or ahead of schedule since the U.S. Bureau of Ocean Energy Management established its revised plan last summer. Both Revolution and Sunrise are “unlikely to achieve” the end of 2023 in-service dates. (See Eversource Reports Profit Increase, Carbon Decrease.)
New London Mayor Michael Passero said in a statement that under full implementation of the agreement, with additional payments from the port authority and Gateway, the city is expected to take in more than $1 million yearly for the initial seven-year time frame.
“The city has worked tirelessly to reach an agreement that benefits the taxpayers of New London as the host city for the State Pier’s use for offshore wind development,” Passero said. “It is exciting for the city to partner with the state on its commitment to increasing clean, renewable energy for Connecticut residents, and we look forward to economic growth opportunities for New London and the region as the offshore wind industry continues to grow.”
Previously, the city received payments in lieu of taxes from the Department of Transportation when it owned State Pier. U.S. Rep. Joe Courtney (D-Conn.), whose district includes the city, said the agreement between it and the developers “is a long overdue restructuring of payments to New London that is much fairer to the taxpayers of the city.”
“Today’s agreement makes Connecticut’s role as a leader in the offshore wind industry official, with New London now poised to become the premier commercial East Coast hub for this sector and our state set to become a leader in the transition to renewable energy and the fight against climate change,” Lamont said. “This project represents exactly what I have wanted to see at the local level since I came into office: local investment, job growth, development, and a focus on providing for a better environment and future for our state.”