Governor Lamont Announces Host Community Agreement Signed by New London and Ørsted/Eversource Joint Venture
Agreement Ensures Growth for Host Community Alongside Emerging Connecticut Offshore Wind Industry
(HARTFORD, CT) – Governor Ned Lamont today announced that the City of New London and the Ørsted/Eversource Joint Venture have signed a Host Community Agreement (HCA) to facilitate the redevelopment of State Pier into a modern, heavy-lift facility capable of supporting offshore wind turbine staging and assembly and a broader range of cargo businesses. The agreement represents a critical milestone in the state’s quest to become a national leader in offshore wind development while providing the City of New London with significant economic opportunity as it becomes a regional epicenter of offshore wind development.
The HCA guarantees at least $5.25 million in payments to the City of New London over seven years. The agreement also provides for the city’s revenue to increase as Connecticut’s use of renewable offshore wind expands over the next decade.
“Today’s agreement makes Connecticut’s role as a leader in the offshore wind industry official, with New London now poised to become the premier commercial east coast hub for this sector and our state set to become a leader in the transition to renewable energy and the fight against climate change,” Governor Lamont said. “This project represents exactly what I have wanted to see at the local level since I came into office – local investment, job growth, development, and a focus on providing for a better environment and future for our state. I am proud to see this agreement come to fruition, and I am especially proud of our private sector partners working with us in the public sector to make this project a reality.”
The HCA provides $750,000 annually to the City of New London for seven years during the construction of the Revolution Wind, South Fork Wind, and Sunrise Wind projects. If Eversource and Ørsted win any Connecticut offshore wind procurement during those seven years and JV work continues at the port, the annual payment will extend through year ten of the host community agreement. The HCA builds on an earlier Ørsted and Eversource commitment for the first two years of operations at State Pier.
“The city is delighted to have reached an agreement with Ørsted and Eversource on a Host Community Agreement,” New London Mayor Michael Passero said. “The HCA will provide the city with $750,000 in base revenue over a seven-year period with the expectation that the payments will continue for ten years and beyond. When the agreement becomes fully implemented, with other payments by the Connecticut Port Authority and port operator Gateway Terminal, the city is expected to realize more than $1,000,000 per year for the initial seven-year period. If the joint venture receives additional awards from the state to produce more energy, the city will continue to receive $1,000,000 annually in years eight, nine, and ten. The city can also receive up to an additional $750,000 annually on top of that if the joint venture attains certain bid levels. The city has worked tirelessly to reach an agreement that benefits the taxpayers of New London as the host city for the State Pier’s use for offshore wind development. It is exciting for the city to partner with the stat on its commitment to increasing clean renewable energy for Connecticut residents, and we look forward to economic growth opportunities for New London and the region as the offshore wind industry continues to grow. I would like to thank Governor Lamont for his leadership on this important project, and for his commitment to New London and Southeast Connecticut.”
Should the Eversource and Ørsted joint venture win additional offshore wind procurement awards from Connecticut, the agreement increases payments up to $1.5 million per year retroactively to year three regardless of the year the award is received. These payments are retroactive, meaning the City of New London would receive the maximum investment regardless of when the increased activity thresholds are met.
“Today’s announcement of a new agreement between the City of New London and the wind project developers is a long-overdue restructuring of payments to New London that is much fairer to the taxpayers of the city,” Congressman Joe Courtney said. “I’ve been in frequent contact with Mayor Passero over the last six months regarding rail access, ferry navigation, and city compensation. His tenacity on fair compensation is justified because of the crucial city support to the State Pier, such as police and fire services, public works, snow plowing, and more. I believe there needed to be a compromise that brings people together, and that will foster stability and certainty, as opposed to endless litigation. New London is the beating heart of our region’s maritime economy, and this deal will ensure it sees a greater benefit from this project – one that its residents deserve. I also want to applaud the efforts of local legislators to stabilize the pilot program, which is also critical to closing the remaining revenue gap of this tax-exempt parcel.”
“Ørsted and Eversource believe that the City of New London can be an epicenter for the offshore wind industry in the northeast and are eager to build a strong partnership with the city and the region by ensuring it has the tools and resources needed to grow alongside this emerging industry,” David Hardy, CEO of Ørsted Offshore North America, said. “Since announcing the final Harbor Development Agreement with the state and other partners last year, we have worked diligently with the mayor and his team to build a strong Host Community Agreement that puts the New London in a position to grow alongside the industry in Connecticut. We are proud to be the city’s partner on this exciting journey.”
“This is a tremendous moment for the City of New London,” Joe Nolan, Eversource Executive Vice President of Strategy, Customer & Corporate Relations, said. “Eversource and Ørsted look forward to our long-term partnership with the city as we work together to launch Connecticut’s next great maritime industry right here in New London. The benefits of the redeveloped State Pier and our offshore wind project work at the port will serve as an economic catalyst for New London and the region, bringing hundreds of new jobs to the area while also delivering the benefits of clean energy to Connecticut and beyond. We are grateful to the mayor for his support for this project and offshore wind and look forward to a long, productive partnership.”
“The Connecticut Port Authority is thrilled that Ørsted and Eversource have reached a final Host City Agreement with the City of New London that guarantees significant revenue to the city while wind development is taking place at the pier,” David Kooris, chairman of the Connecticut Port Authority, said. “This is just the first tangible sign of the local economic impacts that will result from the Connecticut Port Authority having attracted this marquee user to our soon-to-be-upgraded facility. We look forward to more local benefits as the project comes to fruition.”
The HCA is in furtherance of the $157 million public-private Harbor Development Agreement (HDA) between the State of Connecticut and the Ørsted and Eversource Joint Venture to transform the State Pier into a modernized, heavy-lift facility capable of operating as a critical part of the burgeoning U.S. offshore wind supply chain. It coincides with the HDA’s ten-year lease agreement that the Ørsted and Eversource Joint Venture signed to utilize the State Pier as a wind turbine generator pre-assembly and staging hub for at least the Revolution Wind, Sunrise Wind, South Fork Wind offshore wind projects.
If the Ørsted and Eversource Joint Venture continue operations at the State Pier beyond the initial terms of the HDA, this HCA provides an option to negotiate additional payments beyond the initial ten years. In 2019, the city also signed a revenue-sharing agreement with the Connecticut Port Authority, which will benefit the city as State Pier sees increased activity.