New London's State Pier to Be Hub for Offshore Wind Industry

Note: this article was originally published by WFSB - Channel 3 on May 2, 2019.

New London, CT – What was billed as a "major announcement" in New London on Thursday involved a deal to turn the State Pier into a hub for the offshore wind industry.

State officials and their partners said they reached an agreement on a harbor development plan for the pier that will enable its revitalization that will hopefully make it a central hub for the offshore wind industry.

Gov. Ned Lamont joined state and local officials, as well as representatives from the Connecticut Port Authority, Gateway, the Ørsted green energy power company from Denmark and Eversource, for the announcement.

A public-private investment of $93 million will upgrade the pier's infrastructure to accommodate heavy-lift cargo.

The plan calls for upgrading the pier's infrastructure for Ørsted and Eversource's wind components and having the two companies enter into a 10 year lease agreement. The companies will use the State Pier for wind turbine and generator assembly and staging.

“Connecticut’s maritime economy has significant potential to drive economic growth and create jobs across the state, and redeveloping State Pier is a central component to that growth,” Lamont said. “This new public-private partnership reaffirms the unwavering commitment of the state to increase procurement of offshore wind and make the economic expansion of our maritime economy a reality. We look forward to working with our new partners to position Connecticut as a leader in the offshore wind industry and expand economic opportunity throughout the region.”

Connecticut Port Authority Chairman Scott Bates said the plan was exactly why the state's port authority was established.

“For over a year, we have been working towards a vision where increased port activity drives economic growth and creates jobs throughout the state," Bates said. "This Harbor Development Plan brings that vision to life. In the short-term, our local workforce will upgrade State Pier into a world-class port facility, and our regional manufacturing workforce will build components for our new partners in the offshore wind industry. Longer-term, the increased capacity of State Pier will continue to expand the flow of cargo into New London, which will extend our state’s economic reach even farther, benefiting workers throughout Connecticut.”

State officials broke down the highlights of the plan as follows:

  • The Connecticut Port Authority is responsible for oversight and execution of the development project. Construction is tentatively scheduled to begin in January 2020 following bid solicitation and permitting. It is expected to be finished in March 2022.
  • Upon project completion, Ørsted/Eversource will enter into a ten-year lease agreement with an option to extend for seven years.
  • A total of $93 million in capital expenditure commitments from multiple sources will go towards the development of State Pier:
    • Ørsted/Eversource commits $35 million in new capital expenditures for State Pier infrastructure improvements, including $2.5 million to the CPA to offset operational costs during the three-year development project.
    • The State of Connecticut will commit to $35.5 million for State Pier infrastructure improvements, including $25.5 million from the Connecticut Port Authority, as previously announced, and $10 million in new funding from the Department of Economic and Community Development through the Manufacturing Assistance Act.
    • $22.5 million was previously committed for State Pier infrastructure improvements, and Ørsted/Eversource will honor that commitment.
  • The Connecticut Port Authority will receive annual fixed fee payments of $3 million and will be eligible for a one-time completion bonus for on-time completion of the development project in March 2022.
  • Gateway will serve as the terminal operator and will still be responsible for the following fees as outlined in the original operator agreement with the Connecticut Port Authority:
    • A variable fee of 7 percent of its annual revenue (the minimum annual guarantee is not in effect during the terms of this agreement).
    • 50 percent of dockage and wharfage fees.
  • This agreement is contingent upon receipt of all federal and state permits to support the facility development project.

A previous "major announcement" about the pier from Lamont's office revealed a partnership between the City of New London and the Connecticut Port Authority. It was made on Jan. 30.

The partnership involved the city receiving 10 percent of the Port Authority's share of the revenue from the State Pier, among other perks.