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Connecticut Port Authority approves revised wind energy plan for State Pier in New London

HARTFORD – The Connecticut Port Authority unanimously approved a $157 million plan to reconfigure State Pier for use by offshore wind companies following discussions during two closed executive sessions at a special meeting Tuesday morning.

David Kooris, chair of the authority, said the plan was “fundamentally different” from the $93 million memorandum of understanding announced by the State of Connecticut, Gateway Terminal, Ørsted and Eversource on May 2, 2019.

Like the original project, the new facility will have heavy-lift capacity needed for offshore wind components, but will also include three berths designed not to conflict with Crosstown Ferry’s routes along the southern side of the pier, including one on the eastern side of the pier that will accommodate larger vessels.

Under the new agreement, Ørsted and Eversource will pay $77.5 million in construction costs, which includes $22.5 million previously committed in the Revolution Wind project. The State of Connecticut and the Connecticut Port Authority will fund the remaining $79.5 million with $25.5 million that the state bonded for the authority previously and additional bond funding. As with the first agreement, Ørsted and Eversource will sign a 10-year lease, but will pay $2 million annually over ten years.

Under the original $93 million agreement, Ørsted and Eversource would have funded $57.5 million of construction costs and and the port authority was to fund the remaining $35.5 million, according to the port authority’s presentation on Sept. 17. If the State Pier improvements were completed by early 2022, Ørsted and Eversource would have paid an additional $10 million and the port authority would have paid $25.5 million. After the completion of construction, Ørsted and Eversource would have entered into a 10-year lease agreement with the port authority, and paid $3 million each year over ten years as an annual lease. Under the agreement, the state would have continued to own State Pier and would have marketed it to other customers during periods when it was not in use by Ørsted and Eversource.

Kooris said that Ørsted and Eversource have committed $2.5 million to the port authority to cover operating costs during construction when the authority is unable to generate revenue. He said Ørsted and Eversource will also pay $10 million up front as a capital contribution, rather than spreading the payments over ten years as rent.

“The facility needs to be delivered to our private partners by August 2022,” Kooris said. “[They] have commitments for delivery of offshore commitments and this enables them to meet their obligations.”

He said the authority was also working with freight railroad “partners” to secure additional land necessary for upland storage and to create an alternative spur to provide intermodal connectivity to waterfront properties northeast of State Pier.

The agreement will transfer ownership of State Pier property from the Department of Transportation to the Connecticut Port Authority for two reasons, Kooris said.

“The original agreements between the DOT and the port authority did not contemplate the operational scenario we’ve been in for the last several years and didn’t contemplate a capital project of this magnitude,” he said. “But also because of the way the agreement has evolved and the need to ensure that that both Gateway and Eversource-Ørsted have ample rights throughout the process, we are engaging in a direct sublease … and in order to do that the ownership has to be at the port authority.”

Kooris said though it was not part of the agreement, Ørsted and Eversource have also been working with the City of New London for the last several months.

“[They] continue to develop the Host Community Agreement that meets the mayor’s objectives for his community so that benefits accrue not only to the state at large, to the region and to the port authority directly but also to that host community, which is of such great importance and significance to the future of State Pier,” he said.

Public comment

When the meeting began, board chair David Kooris began the roll call. At the same time, Kevin Blacker, of Noank, stood and addressed the board, stating that he wouldn’t leave until forcibly removed.

“I am protesting the Connecticut Port Authority, their repeated breaking of the law, exclusion of the public, secretive dealing and I’m not leaving the floor until I’m arrested and in handcuffs,” Blacker said. “I’ll just continue to stand here and disrupt this meeting until that time, as you have repeatedly broken the law, over and over and over and this is what it has come to.”

Kooris asked whether Blacker would speak during the public participation period on the agenda, but Blacker continued to speak, alleging that the port authority had lied repeatedly. Kooris requested that Blacker be removed from the room. Blacker was handcuffed and escorted out, and subsequently issued a summons and released.

During the public comment period, Linda Blais, of Bozrah, said she wanted to see a financial breakdown showing how much the public will pay for the project and the benefit to the taxpayers in dollars.

“I don’t remember seeing anything public about who’s responsible for what dollar value,” she said. “It seems to be a moving target … This could be the best project ever, but the general public doesn’t have enough information to be able to judge for themselves whether this is the appropriate use of our tax dollars.”

Kooris said the costs and the breakdown have been publicly updated at the monthly port authority meetings. He also said this project was unusual because normally public facilities are funded 100 percent with public dollars, but this project was a “rare situation” because it was a public facility funded both privately and publicly.

Legislative opposition

In a Feb. 11 letter to Gov. Ned Lamont, State Sen. Heather Somers (R-Groton) said the costs of the project continue to rise, leaving taxpayers to pick up the tab, which could have an adverse economic impact on southeastern Connecticut.

“With so much at stake, it is abundantly clear that greater transparency and oversight must be injected into this process before such an agreement can continue,” she wrote. “For your administration and the Port Authority to rush this agreement through, without giving policymakers and the public adequate transparency into the details and an opportunity to weigh in would be an unacceptable outcome.”

In a Feb.10 letter received by email, State Sen. Paul Formica (R-East Lyme) said the port authority should wait until legislation is passed to regulate quasi-public agencies.

“The indiscretions of the Connecticut Port Authority are still too fresh in all of our minds to simply turn ownership of the pier over to them without assurances that new members, extensive oversight and process controls are firmly in place,” he wrote. “Senate Republicans are introducing a legislative proposal tomorrow that we believe is long overdue and reins in the actions of all Connecticut quasi-publics including the Port Authority with more transparency and oversight.”

Formica said while the economic benefits of offshore wind could be significant, it was important to execute the State Pier project in a transparent process that increases public trust in the port authority.

“Offshore wind has the potential to be the economic driver Connecticut needs to develop to support our growing manufacturing sector and move our state into the next generation of energy independence,” he said. “We want to see a plan that benefits all state residents and this may be the plan to do that, but we cannot rush into this without a thorough review and a strong plan to make sure the indiscretions of the Port Authority are addressed and public confidence is rebuilt.”

Moving forward

In a press release on Tuesday afternoon, Gov. Ned Lamont announced that “the State of Connecticut and its partners Gateway Terminal, Ørsted, and Eversource have reached a final agreement on a harbor development plan for State Pier in New London that will transform the pier into a world-class offshore wind center and bring hundreds of well-paying jobs to the area.”

According to Lamont, the selection of a contractor will begin in late 2020 and the first phase of construction will start in early 2021. The joint venture will also use State Pier for wind turbine generator pre-assembly and staging for Sunrise Wind and South Fork Wind projects.

After the meeting, Kooris said that the port authority has built a foundation to be the “steward of the public interest that everyone hopes us to be.”

“I think the public should have confidence that since things were brought to light, we have worked really hard over the last six to nine months to put all the measures in place to ensure that issues that occured in the past do not occur again. Anyone who has been following our actions over the last several months will note that we have put multiple policies and procedures in place in response to the three audits that we have had completed that explicitly address any issues that have been brought to our attention by others or by members of the public,” he said.

Kooris said the entire agreement will be made available online and to the public. “The agreement and every attachment is going to be on the governor’s web page,” he said.