Local officials confident state still on board with offshore wind

Gov. Ned Lamont may have balked at the most recent opportunity to sign a deal to supply more offshore wind power to the state, but local officials remain optimistic that a $310 million investment in State Pier was a sound one.

Leaders from New London and the Connecticut Port Authority, which owns State Pier in New London, agree that offshore wind farms are an important part of the state’s goal of providing a carbon-free electricity supply by 2040. Both the city and port authority stood to benefit financially if the state had opted in on the most recent renewable energy solicitation.

Instead, Massachusetts and Rhode Island signed on to newly pitched offshore wind projects. Connecticut, despite having a tri-state agreement with the two states that allows them to collectively accept bids, announced it was still considering its options.

Lamont has since said publicly that high electricity rates in the state were a major consideration in delaying a deal.

“I think everybody would like us to triple down on as much new power, in particular carbon-free power, as we possibly can,” he said in public comments last month. “I do as well, but I also have a close eye with the ratepayers because they know how expensive it is.”

More recently, Lamont said a drop in interest rates may impact the cost of offshore wind and he is considering waiting until the next round of solicitations to accept new bids.

“You’ve got to make a long-term investment, but I am very conscious about affordability,” he said.

New London Mayor Michael Passero has watched the controversial redevelopment of State Pier on the city’s waterfront with anticipation of a long-term economic boost to the city ― a catalyst for new development along the city’s coastline.

In 2021, Passero inked a host community agreement with Ørsted and Eversource ― Eversource has since sold its share in State Pier to Ørsted ― that provides a minimum of $750,000 per year over seven years. The city received additional revenue of $145,000 in fiscal year 2024 through impact fees and a revenue-sharing agreement based on activity at State Pier.

Revenues to the city would be boosted by between $250,000 and $1.5 million per year if Ørsted is chosen by the state to supply more offshore wind power, according to terms of the host agreement. The city will earn more money even if Ørsted opts to sublease to another wind developer.

In an interview this week, Passero rejected criticism of the state’s delay in procuring more offshore wind power. Instead, he credited Lamont for “setting the stage” for more wind power by not only investing in State Pier but by supporting things like the creation of the Connecticut Wind Collaborative.

Passero, fresh off a visit to England, said Europe has a mature offshore wind industry and that the U.S. should take note.

“You can’t build a supply chain if you don’t have the commitment to buy power,” he said. “Connecticut will be buying its share of offshore wind sometime in the the near future. I’m confident of that. Right now we’re just fixated on the cost.”

Paul Whitescarver, chairman of the Connecticut Port Authority’s board of directors, agreed there is an expectation that the state will buy more power in the near future.

“I think everybody involved was kind of surprised the state didn’t come out at the same time Rhode Island and Massachusetts did,” he said. “But there is an expectation, in the near future, that will occur. We made this investment at State Pier.”

Whitescarver said he believes the cost in the bid for power was higher than the state expected or wanted to commit to. The costs involved with the power purchase agreements in the bids from offshore wind projects have not been made public.

“It’s probably smart for (Lamont) to hold off until there is a competitive bid that makes sense to people,“ Whitescarver said.

Even if the state opts not to choose Ørsted, which maintains a 10-year lease at the pier with options for 10 more, Whitescarver said the improvements at State Pier make it ideal “for any developer to use.” Ørsted has an option to sublease the pier to another wind developer.

Whitescarver said that if Ørsted doesn’t use State Pier, it could be used for development of one of the recently chosen offshore projects in Massachusetts or Rhode Island.

Ørsted is using State Pier to stage and assemble components for three offshore wind projects, the recently completed South Fork Wind, Revolution Wind and Sunrise Wind. Whitescarver said he expects there will be activity at the pier through at least 2026, which leaves three years on Ørsted ’s lease when Ørsted and port operator Gateway could pursue other developers or uses for the pier.

“I would say there is a high probability it could be used for wind,” Whitescarver said.

If not wind, Whitescarver said there is also the possibility of traditional break bulk coming in to State Pier. Either way, he said, the state stands to benefit from an increase in revenue. The Connecticut Port Authority is being paid $2 million per year from the lease alone.

The state legislature has authorized the purchase of up to 2,000 megawatts of offshore wind power, but the only power purchase agreement at the moment is with Ørsted for 300 megawatts from the Revolution Wind project. The wind farm is supplying power to both Connecticut and Rhode Island.

Ørsted, in the latest round of bids, pitched Starboard Wind, a 1,184-megawatt project that appeared to be aimed at Connecticut and Rhode Island and would use State Pier as a staging area.

One of the projects chosen by Massachusetts was Vineyard Offshore’s Vineyard Wind 2 project, a proposed 1,200-megawatt. Massachusetts, however, signed on for 800 megawatts.

Vineyard Offshore CEO Alicia Barton, in a statement, said, “We look forward to Connecticut’s forthcoming decision on the remainder of the procurement so that we can begin to deliver important economic and climate benefits to the region.”

Sierra Club Connecticut Chapter Director Samantha Dynowski said she thinks it would be a mistake for the state to delay in procuring offshore wind power.

“I think the biggest and most important thing to consider when making this bid in our current environment of high electrical rates is that economists have come in with reports that offshore wind will decrease bills,” Dynowski said. “There is interest across the political spectrum in providing some relief to electrical bills.”

g.smith@theday.com