Posted on September 7, 2021
New London — The Connecticut Port Authority has failed to meet an Aug. 31 deadline to obtain a federal permit for work on the $235.5 million State Pier construction project but appears confident its offshore wind partners will not decide to pull funding.
The Aug. 31 deadline is contained in an amendment added earlier this year to a Harbor Development Agreement between the port authority, state and joint venture partners Ørsted and Eversource.
The amendment allowed for the release of more than $50 million from Ørsted/ Eversource to enable the port authority to continue to approve contracts associated with the ongoing permitted work at State Pier. The partners have committed $70 million toward the project.
The new terms allow Ørsted and Eversource the opportunity to pull a significant portion of that promised funding, which in turn would force the CPA to rethink the scale of the project. There has been no indication either side is thinking about a scaled-back project.
Ørsted and Eversource, in a statement, said they plan to meet with representatives from the state and CPA to discuss plans moving forward.
“We expect that the final Army Corps permit will be issued soon and we will come together with the State to assess schedule impact — if any,” the statement reads.
The amendment to the Harbor Development Agreement states that if an Aug. 31 deadline is not met, the two sides are to meet “and use diligent commercial efforts to either revise the applicable deadline(s)” or “revise this Harbor Development Agreement and the Sublease Agreement no later than September 15, 2021 to reflect an alternate construction schedule, cost estimates and or funding plan. …”
The deadline referenced in the agreement included a state permit and release of state funding for the project, two conditions that have been met.
A spokesperson for the Army Corps of Engineers said this week a decision for a federal permit is not expected until the end of the month. The permit would allow for filling in 7.2 acres between the two existing piers, which is a crucial part of the project.
CPA Board Chairman David Kooris explained to the CPA board in June that it is a “worst case scenario” that the two sides do not agree to an extension of the deadline, but if it happens, Ørsted/Eversource is entitled to withdraw a portion of its funding. There are limitations on how much Ørsted/Eversource could pull out and would exclude the $22.5 million previously committed by Deepwater Wind — an offshore wind company purchased by Ørsted — and $2.5 million in operating funds, as well as any funding that already has been expended on the project.
Kooris has said the deadline was a way for Ørsted/Eversource to mitigate its risk of having released its funding for a project.
A meeting between the two sides is expected to occur before Sept. 15. Andrew Lavigne, the CPA’s manager of business development and special projects, said Wednesday that “we all remain committed to developing a plan to deliver the project in its full scope within a mutually agreeable budget and time frame.”
“Ultimately we and our partners want to build to full scope. That is the core of the discussions to be had between now and September 15,” he said in an email.
Meanwhile, work continues at State Pier, and a large cargo ship, BBC Eagle, this week was offloading steel pipes for use in reconstructing the northeast bulkhead and heavy-lift pad, work that is not dependent on the federal permit.