Time is now for major upgrade at State Pier, wind deal officials say
The parties proposing a remaking of State Pier made a case Tuesday night for a major public-private investment in the state-owned facility spurred in large part by the emerging offshore wind industry but maintained that they also envision a broad range of cargo coming in to the pier.
For months, the Connecticut Port Authority, pier operator Gateway and Danish wind giant Ørsted and Eversource have privately negotiated how they would like to invest $93 million in both private and public money into State Pier. The first public unveiling of what they are proposing drew hundreds of people to the Holiday Inn in New London.
"We're coming to you today not with a deal ready to sign, but rather with a deal that has been negotiated to a great degree, but is still ready and willing and able for your meaningful feedback," said David Kooris, acting chair of the port authority's board and deputy commissioner of the state Department of Economic and Community Development.
Before the deal is signed, Gov. Ned Lamont's administration will review it, and the port authority's full board must approve it, Kooris said, but emphasized in an interview earlier in the day that time is of the essence.
"We're in a 45-day window at best," Kooris said. "We need to decide if this is going to work."
The major aspects of the proposal include filling in the area between the two existing piers at State Pier to provide additional laydown area, add heavy lift capability, which would allow for heavier cargos to be brought in, and maintain rail access.
Kooris said years of studies on State Pier, including one done in 2011 for the state Department of Transportation, back up what is being proposed. The studies, he said, also have underscored the necessity of private partners to share in the costs of upgrades and to ensure the pier's maximum use once those upgrades are completed.
"We've had a blueprint for what the state should do, but we didn't yet have the partnership identified to share cost and increase utilization and then along comes offshore wind," he said.
In June 2018, state regulators selected Block Island Wind Farm developer Deepwater Wind to bring offshore wind power to Connecticut. Several months later, Deepwater was acquired by Ørsted, which is now in a partnership with Eversource to develop a wind farm in federal waters about 65 miles off the coast of New London.
The original plan was for New London to be a staging area for the assembly of the offshore substation, the electricity hub for the turbines, and secondary steel fabrication, such as welding ladders and rails. Now the vision is for New London to become an assembly and installation hub for offshore wind projects in Connecticut and other Northeast states, Kooris said.
Across the Northeast there's the potential marketplace for 20 gigawatts of offshore wind generation in the "near to midterm," Kooris said, the equivalent of 40 natural gas power plants.
New London is well positioned to take advantage of these projects due to its geographic location, direct access to open ocean, the lack of height constraints from bridges, and the manufacturing base that already exists in the area, officials have said.
Kooris said the expectation is the offshore wind industry will greatly increase the number of vessels coming into New London, which currently averages about 23 port calls annually. That could increase to up to 80 vessels when offshore wind campaigns are in full swing. During those times, State Pier will be solely used by the offshore wind industry, Kooris said, but the parties are all committed to bringing in cargo in between and during lulls in that activity.
The increased activity would result in more revenue for the port authority, and for New London, which gets a share of the port authority's revenue from the pier.
New London Mayor Michael Passero said the city welcomes the $93 million investment being proposed for the pier but said he is continuing to negotiate to ensure the city gets an equitable share of the revenue generated from the port.
In addition to the revenue from the port authority, the city also receives about $125,000 annually in payment in lieu of taxes, or PILOT, funds. Deepwater had committed $750,000 annually over at least a two-year period, a commitment Ørsted is upholding, which, combined with the other revenue, amounts to about $1 million, roughly the equivalent to the tax value of the property.
The upgrades to State Pier would need to be completed by April 2022 based on the timeline Ørsted and Eversource have committed to for their offshore wind project, Kooris said.
Of the $93 million project, $57 million would come from private money, with the opportunity for more funding with each milestone achieved, including an additional $10 million for timely completion of the project. The remainder of the money would come from the port authority, which in addition to State Pier revenue also receives about $400,000 in state appropriations annually.
Timeline: State Pier and wind power
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