The Middletown Press (Middletown, CT)
Pier project could exceed $300 million
Cost increases from estimated $93 million
The state Port Authority is planning to request an additional $30 million in bonding to complete the state pier project, pushing the total cost to $300 million.
The goal of the state pier project is to upgrade the facility to accommodate a wind power hub servicing offshore wind farms that would bring power to Connecticut and the region.
The project was originally supposed to cost $93 million, but costs had already ballooned to $255.5 million before the state Port Authority voted Tuesday to ask the state for an additional $30 million.
Of that $255.5 million, $77.5 million has been borne by Eversource and Ørsted, the power companies that will run the windfarms and pier once they are built. That $77.5 million contribution will increase by $23.75 million, a bit more than half of the additional $47 million cost of the project.
The Port Authority will request the other half, $23.5 million, plus a $6 million contingency from the state.
“Of the additional $47 million, Ørsted and Eversource have agreed to contribute $23.75 million and we will be seeking the other half of $23.5 million from the state plus an additional 6.5 million for an owner’s contingency,” Port Authority Executive Director Ulysses Hammond told the Port Authority Board Tuesday.
That would bring the total cost of the state pier north of $300 million.
“No one has been able to explain to my satisfaction or the rest of the delegation’s satisfaction, how a $93 million project became almost a $300 million contract, nearly tripling in cost,” Rep. Holly Cheeseman, R-East Lyme, said Tuesday.
There is hope of recouping some of that cost, as Port Authority Executive Director David Kooris explained during an interview. NEO, which owns the offshore areas in which the wind farms will be built, will pay the state $2 million a year, and Gateway, which manages the state pier on behalf of the Port Authority, will pay back a portion of its revenue once the operation is up and running.
“In addition to that, it is our expectation that there will be times when Ørsted does not have an active wind project utilizing the facility,” Kooris said. “In those situations, they will seek out other wind developers to use the facility. If that does happen, we expect that there would
be significant revenue from that and so there’s a mechanism whereby we share that revenue with NEO.”
The first wind project, which had been expected to be operational this year, will consist of 12 turbines supplying energy to 70,000 homes on Long Island’s south fork. Two years later, another 65 turbines are expected to provide energy to 350,000 homes in Connecticut and Rhode Island. Another 84 turbines should go operational that year, providing energy to 600,000 homes in New York state. The state pier would act as a staging ground for all those projects during both construction and operation.
Cheeseman said that during a Tuesday morning call between the Port Authority and a bipartisan group of lawmakers
that “there were some general comments about difficulties, things that were unanticipated.”
Hammond said Tuesday that the cost increases were intended to cover work on a foundation wall, the pier’s heavy-lift platform, “and all of this work is scheduled to be completed by October, leaving only dredging in late fall.”
Eversource announced last week its intention to sell its share of the three offshore wind farms to Ørsted, but Kooris said “it has no bearing on us or our partnership.”
“We certainly view it as positive given Ørsted’s history in the industry and see no downsides associated with it whatsoever,” he told the board.
Seabury Maritime, a contractor on the project, was recently fined $10,000 by the Office of
State Ethics for undisclosed lobbying before the Connecticut Port Authority. It’s the second such fine imposed on Seabury in two years.
Seabury and the Port Authority are also reportedly the subject of a federal investigation into its 2018 selection of Gateway as manager of the pier on behalf of the Port Authority.
Seabury Capital, which owns Seabury Maritime, was paid $700,000, including a $523,000 “success” fee for choosing Gateway, three months after Henry Juan III of Greenwich, a managing director at Seabury, had resigned from the Port Authority board.
When asked earlier this year if he was concerned about the investigation, Hammond said, “We’re concerned but not constrained.”