With East Hampton Town officials holding a hearing on Thursday, May 17, on Deepwater Wind’s request to land a power cable from its proposed 90-megawatt South Fork Wind Farm to Beach Lane in Wainscott, a top company official this week sought to clear the air about what exactly is on the line.
In an interview on Thursday, Clint Plummer, Deepwater’s vice president for development, stressed the fate of the project is not at stake when the town board and trustees hold a joint hearing at LTV Studios on Industrial Road in Wainscott at 6:30 p.m. – but that a $8.75 million community benefits package is.
“The decision before the town is not whether our project goes forward,” he said. “Our project is going forward. We are either going to bring the cable in at the town-owned location or at the state-owned location.” In the event the town denies the request to come ashore at Beach Lane, Deepwater has proposed to land the cable in Hither Woods State Park in Montauk.
The cable will be run to a diesel substation on Cove Hollow Road in East Hampton. Electricity from the wind farm will first be distributed in East Hampton with excess production sent to the rest of Long Island.
Mr. Plummer stressed that Deepwater’s contract is with the Long Island Power Authority, not with the town. It is required to deliver a reliable source of alternative energy to head off anticipated future power shortfalls in East Hampton during the peak summer months, he said.
The company must submit its permit applications by the end of June in order to have enough time to complete the state and federal review process and have the wind farm up and running by the end of 2022 as required by its contract with LIPA, he said.
He also attempted to answer critics who have complained that the company has been unwilling to disclose the terms of its contract with the Long Island Power Authority, saying it is LIPA that prohibits that disclosure.
Mr. Plummer added that consumers expecting to see a financial windfall when the project goes online are going to be disappointed and should instead expect to see a modest increase in their monthly bills.
As part of its effort to win approval to land its cable at Beach Lane, Deepwater has offered a number of incentives including $2 million for an ocean industries sustainability fund; $1 million for an inshore fisheries support fund; $1 million for a Wainscott water fund; $200,000 for an energy sustainability and resiliency fund; and $75,000 annual payments totaling $1.875 million for the 25-year life of the project for a marine infrastructure and management fund. Deepwater also estimates it will pay $2.5 million to bury electric lines, including residential connections, in Wainscott along the cable’s route.
That offer will be withdrawn, Mr. Plummer said, if the company is forced to bring the cable ashore on state land at Hither Hills in part because of the increased costs the company would face in running the cable 10 to 12 miles instead of the 2-mile distance from Beach Lane.
“The community benefits package is part of a broader agreement between us and the town that includes real estate rights,” Mr. Plummer said. “We think it is a great example of how these types of projects should be done.”
Governor Andrew Cuomo has called for the development of 2,400 megawatts of wind power off of New York’s shores, and Mr. Plummer said the community benefits package Deepwater has offered East Hampton could serve as a valuable precedent to other communities that will soon be asked to consider similar projects.
Deepwater has already developed a wind farm off Block Island and is working on one off the coast of Maryland. Mr. Plummer said the rate it will be paid in those states has been made public, but that LIPA had required a nondisclosure agreement as part of his company’s contract.
Sid Nathan, a LIPA spokesman, said LIPA does, in fact, required that its contractors keep the rates they are paid secret. He insisted that LIPA paid Deepwater a rate that is similar to that paid for other renewable energy providers.
New York State Assemblyman Fred W. Thiele Jr. said he disagreed with that policy. “It’s one thing if they are withholding information during the middle of a bidding process,” he said. “Once the bids have been awarded, I can’t think of any legitimate reason why the public shouldn’t have a right to see this. The ratepayers are paying for this.”
Mr. Thiele said LIPA has long been close-lipped over matters that should be public, including executive compensation, and said he is considering sponsoring a bill that would attempt to end the process.
Mr. Plummer said how rates are set is a complicated process and that the amount paid for electricity produced by the South Fork Wind Farm cannot be compared to the rate that would be paid for a wind farm that would deliver power to the state in general. “This is a project that was proposed in response to a very particular need for one substation in East Hampton, New York,” he said. “It would be less if it didn’t have to go to a single substation.”
The state has estimated the wind farm will cost the average PSEG – Long Island customer an additional $1.19 each month.
Mr. Plummer said electric rates vary with the price of the fuels needed to produce it. As natural gas and oil prices rise, consumers will see their electric bills go up, he said.
“Your rates are going to go up with or without our project,” he said. “With our project your rates are going to go up less.”
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