Looming Deadlines Push Costs, Possible 16-Hour Days for State Pier Redevelopment
As construction begins on the first offshore wind project
meant to be staged out of New London’s State Pier, looming deadlines are
driving up costs as officials work out the final price of the pier’s
redevelopment.
At a Connecticut Port Authority board meeting last week,
Chairman David Kooris said there has been close coordination with Eversource
and Ørsted to make sure the State Pier project is finished in time to be used
on their 132-megawatt South Fork Wind project, which had a ceremonial
groundbreaking this month in Long Island, and is supposed to go online in late
2023.
The final cost is still being negotiated between the Port
Authority, Connecticut Department of Administrative Services, the construction
manager Omaha, Nebraska-based Kiewit, and construction administrator AECOM –
and Kooris said he expects it will be brought to the board in a special meeting
in March.
The projected cost of the project has ballooned from $93
million when it was announced in 2019 to a projected total cost of $235
million last year. The project has also been pulled into an FBI
investigation of former Office of Policy and Management Deputy Secretary Kosta
Diamantis, who was the state’s point
person on procurement for the State Pier project and is being investigated by the FBI for his actions as head of the
state’s school construction grants program – as CT Mirror has
reported.
In a statement responding to questions from CT Examiner,
Port Authority spokesman Andrew Lavigne said the project team has acknowledged
costs associated with delays in the permitting process from “interventions,
objections, exceptions and appeals,” which extended the construction time of
the project. Environmental permits that the authority expected last March were
approved in December,
delaying construction on the pier.
“Schedule and budget are equally important. As a matter of
fact, they drive each other – the cost can drive the schedule and the schedule
can drive the cost,” Department of Administrative Services Deputy Commissioner
Noel Petra told the board last week.
“We’re looking at that very, very closely. If you’re looking
at a construction project correctly, you’re looking at the schedule just as
closely as you are the budget, because if the schedule goes over, it drives the
budget, and vice versa.”The offshore wind partnership between Eversource and
Ørsted has contributed $75 million to redevelop the New London State Pier into
a staging area for its three proposed wind projects off the coasts of Long
Island and Rhode Island – South Fork, the 704-MW Revolution Wind and the 880-MW
Sunrise Wind.
“It’s probably the best site for this work between Norfolk,
Virginia, and Halifax, Nova Scotia, and only 60 to 65 miles from our nearest
turbine locations,” Eversource CEO Joe Nolan said in an earnings call last
week.
Nolan said he believes the redeveloped pier would be a “key
strategic advantage” to the Eversource-Ørsted partnership given its proximity
to their 550 square mile offshore wind lease area in the Atlantic Ocean, where
he said the companies plan to build at least 4,000 megawatts worth of projects
in the coming years – about double what is already planned between South Fork,
Sunrise and Revolution.
The South Fork project – which will include twelve turbines
about 35 miles east of Montauk Point – is the first of the three projects to
gain approval. Onshore construction of a substation in East Hampton to connect
into the Long Island power grid is underway.
The companies intend to use the redeveloped State Pier as
the staging ground for assembly of the turbines themselves starting in early
2023.
Mike Ausere, vice president of business development for
Eversource, told CT Examiner in a recent interview that the turbines for all
three projects will be pre-assembled at State Pier and brought out to the project
at sea by feeder barges for South Fork Wind and using a ship Dominion Energy
built specifically for offshore wind projects for Revolution Wind and Sunrise
Wind.
At the Port Authority meeting last week, board member John
Johnson said that, considering how important timing is for this project, they
might have to consider expanding construction to 16-hour days from 8-hour
days.
Keeping a lid on the cost is important, but the project
schedule is just as important, Johnson said.
Kooris agreed, saying they were “exploring everything,” and
planned to have a final price before the board at a special meeting before its
next regular meeting in April.
Department of Administrative Services Deputy Commissioner
Noel Petra, whose department is now leading the negotiations with Kiewitt and
AECOM, told the board they were working to “wrestle” the schedule and price.
“It’s really a negotiation,” Petra said. “It hasn’t been cut
and dry like I would like it. But we’re working with them to get there.”
Eversource CEO Joe Nolan gives scandal-plagued Gov. Lamont a State Pier hug
We really haven't heard much from Eversource CEO Joe Nolan
about the gift of staggering proportions that Gov. Ned Lamont is providing the
rich utility and its Danish partner in offshore wind: a remake of State Pier in
New London that is going to cost at least a quarter-billion dollars.
Actually, incredibly, we don't know even know yet exactly
how much it's costing, with the Connecticut Port Authority not expected to
disclose the latest price until its April meeting.
Meanwhile, even as the FBI busily investigates
contracts for the project, construction
continues at breakneck speed on a pier remake that already has
spiraled in cost from $93 million to $235 million, at last reckoning, with
Lamont using borrowed public money for all of those increases, FBI
investigation be damned.
Even as runaway spending continues, with no certain price
ceiling in place, port authority board member John Johnson, who shrugged off a
ruling from the Connecticut Office of State Ethics that he not routinely vote
on State Pier matters because of a conflict — an admonishment ignored by
the scandal-plagued Lamont administration — said publicly this week that
construction should go into overtime overdrive.
Welcome to Lamont's Connecticut, where the governor, with
his administration being investigated by the FBI, tries
to underfund the state's contracting watchdog agency as it scolds him
for the pier project, and ignores a ruling from state ethics officials
regarding the very project under federal scrutiny.
I know it's because I am a grizzled old cynical journalist,
but I can't help but think that the timing of Eversource's Nolan's sudden
public praise for the State Pier construction is related to the growing
scandals surrounding the project.
Nolan told investment analysts in a recent conference call
that State Pier will be the best wind turbine assembly facility between
Virginia and Nova Scotia, a pronouncement prominently reported, with backup
statements from utility public relations executives, in the Hartford
Courant.
You could almost picture a grateful Lamont tapping the
headline, maybe one he helped conjure up, as if all that money, spent from
contracts now under investigation by the FBI, has been well spent.
Actually, the state should have performed its own analysis
of the offshore wind industry before making such an enormous investment of
public money, but I learned from some internal emails that the Lamont
administration bungled and then disbanded an offshore wind study task force
team.
The state has done no research of its own to determine
whether the quarter-billion dollars being spent on the New London pier makes
sense or whether similar facilities in New Jersey and Massachusetts could
better accommodate the industry.
We apparently have only the word of a utility CEO, delighted
that Connecticut is spending so much public money on a facility Eversource and
its partner will have exclusive use of.
CEO Nolan, who apparently decided to throw Lamont a
compliment bone, as the governor's administration is mired in scandal, was also
on hand back in early 2020 at the news conference in which Lamont unveiled the
deal in which the state takes responsibility for all cost overruns at what
they might as well rename Eversource Pier.
Also present that day was Konstantinos Diamantis, Lamont's
then-trusted deputy budget chief, who is now apparently in the FBI's sights.
The governor verbally clapped Diamantis on the back that day
and suggested his chief construction manager was going to bring the pier
project in on time and under budget.
Wow. Talk about poor character judgment and misplaced
confidence.
Today, we still don't know even how much it's all going to
cost, what the price eventually will skyrocket to, and Lamont and Nolan
are in full spin mode.
More Notes on Surviving a Scandal
Kevin Rennie
The state contracting scandal continues to engulf Governor Ned Lamont’s administration. Lamont’s strategy appears to be a series of shrugs and dismissals of each new revelation. We know that federal criminal investigators are casting a wide net to gather evidence on how and why state contracts for construction, demolition and hazardous abatement were steered to favored businesses.
A corruption scandal of this reach always touches more
than the central figures. It may ensnare the culpable and the innocent. Daily
Ructions offered advice for surviving a scandal on February 6th. Recent events
prompt more.
As day follows night, home improvements are a constant in
Connecticut corruption scandals. They are closing in on you if you see any of
the following on a subpoena: kitchen, basement, estimates, contracts, and
receipts.
If you failed to obtain building permits for home
improvements, do not slither into your local town hall now to apply for them
while explaining you forgot all about the application and the fees in the rush
of construction.
If investigators start poking around a delightful Farmington
restaurant for records and recollections of who paid for meals there with
contractors, start hunting for receipts and ethics disclosures.
As you assess your situation with the assistance of competent counsel, learn what a proffer is. Criminal defense lawyers refer to it as a Queen for a Day Letter. Learn more about it here.
Read documents. Governor Lamont continues to appear hopelessly muddled as he struggles to explain why he knew nothing and saw nothing, absolutely nothing, about the scandal that is staining his administration. The Twardy report is 42 pages of narrative.
The sorry tale flows in the telling, even with some omissions. A document compiled in the summer of 2020 by building trades unions association and given to Lamont’s office is two and a half pages.
In his befuddled explanation of why he did not see the document, Lamont said last week that the union representatives wanted most to talk about project labor agreements, PLAs.
They never got to warnings about Kostaninos Diamantis’s abuse of the school construction grants program. The Yale business school graduate seemed not to remember that the union complaints about PLAs centered solely on Diamantis. It’s right there in that concise memo.
Read the documents before commenting on them with
misplaced confidence.
If an element of your defense is that you have been mistreated by the powerful, you’d better not have berated, embarrassed or made subordinates cry.
If you required those who worked for to get your coffee or
lunch, your bid for victimhood will be undermined. A directive to deliver documents
to the boss at home is in no public employee’s job description.
Criminal investigations and the subsequent prosecutions can disrupt domestic harmony. Understand the complexities of the doctrines of spousal communications and spousal privilege in criminal prosecutions.
As an example of its complexities, the
smartest lawyer I know pointed out that it is intended to protect the sanctity
of marriage–where it has not already been shredded by the acts of one or both
spouses.
If you are sure you deserve to keep or be reinstated to your
state job, insist the state labor panel hearing your claim open your hearing to
the public. If you are confident of your case, let in the light.
It is imprudent to declare how talented and accomplished you
are while also claiming you saw nothing, you knew nothing. Prosecutors are
not persuaded by people who insist they are smart about everything but what
went on in front of them.
Dan Haar: Bridgeport demolition job went to the higher bidder by $3.3 million
Work is well underway in the demolition of three buildings
on a former part of the University of Bridgeport campus for the new Bassick
High School in the city’s South End, after a lot of back-and-forth about the
location and financing.
The demolition and hazardous materials abatement, by all
accounts, went more smoothly. AAIS Corp., a West Haven company on the state’s
preapproved list of demo and haz-mat contractors, won the bid for $8,769,000 on
Sept. 30, city records show.
AAIS has already taken down much of the 8-story former
dormitory, Bodine Hall. But it was not the lowest bidder. Bestech Inc., of
Ellington, bid $5,445,000 for the same job.
That’s a difference of $3.3 million, making the AAIS bid a
whopping 61 percent higher than its competitor’s offer.
Bestech is on that same controversial state list of four
demolition and haz-mat contractors as AAIS, which was created in 2016. Both
firms are on the list of likely subpoena recipients in an ongoing U.S.
Department of Justice investigation into school construction in Connecticut.
No one can say Bestech wasn’t a qualified bidder. The whole
point of the list is to give the state and cities and towns a choice among
contractors that are fully vetted and ready to roll, with unit prices pre-set —
X amount per square foot to remove asbestos tiles and Y amount per ton for
cement, for example.
So, why would Bridgeport pick the higher bidder? Not just
higher, but unheard-of higher, in a competitive industry where differences of 5
percent are viewed as significant.
Bridgeport officials stood by their decision Tuesday.
“The opinion is that AAIS would provide a better, completed
job even though their initial price is higher overall,” Michele Otero, a
construction project manager for the city of Bridgeport, wrote in the minutes
of the Sept. 30 special meeting of the city’s school building committee
The city’s message is that with unit prices in force, the
final price paid to AAIS might well fall below its bid and the price offered by
Bestech might have required upward adjustments. Maybe so, but $3.3 million on
top of a $5.4 million bid? Seems unlikely.
The 60-percent haircut
Bestech has demolished similar-sized
buildings in Connecticut, records show. It’s hard to see a reason for
bids at all if you’re going to allow a 60-percent haircut.
That might be a question federal investigators ask school
construction contracting under the former director of the school building program,
Konstantinos “Kosta” Diamantis, an inquiry that was made public on Feb. 2.
AAIS was by far the largest
recipient of work on state buildings between 2017 and the end of 2021
among the companies on that preapproved list, I reported Sunday — with $20.2
million of the $28.8 million in work orders. Bestech was No. 2, at $8.2 million
and the other two firms pulled in less than $400,000 combined.
Those numbers don’t include work done by cities and towns
for school and municipal projects such as the Bassick High School project.
Cities and towns are entitled to tap into the same unit prices as the state
from those contractors for work they need done.
Diamantis, the former director of the state Office of School
Construction Grants and Review, told me Tuesday he had nothing to do with the
selection of AAIS and that he neither recommended the firm nor approved the
city’s use of a higher bid. In fact, he said the office he headed did not
oversee municipal and school systems’ use of the preapproved list at all.
“The Office of school construction and grants has no role in
that process and nor does it have an opinion,” Diamantis said in an email,
adding in a conversation, “There’s a big presumption that I know more about it
than I do.”
Diamantis retired from his job heading the school
construction office on Oct. 28, rather than accept a suspension ordered by Gov.
Ned Lamont — who fired him from his in his related, appointed position as
deputy secretary of the state Office of Policy and Management amid allegations
of nepotism.
The city of Bridgeport said in a written statement to me
Tuesday that neither Diamantis nor anyone else at the state level expressed a
preference for either demolition contractor, and the city did not need to seek
approval from the state for choosing a much higher bidder.
“We did not discuss this with the State prior. We did inform
them after the fact that the School Building Committee decided to award the
contract to AAIS,” the email said.
State taxpayers on the hook
Some of the confusion over which state agencies oversee
local schools’ use of the preapproved list stems from the fact that Michael
Sanders, who managed the haz-mat and demolition work for the state for many
years, reported to Diamantis in recent years. In at least one instance, in
Bristol in 2020, Sanders suggested the city hire a specific contractor for a
school job — Bestech, as it happened — according to a letter from the
then-Bristol city attorney.
Bestech won the job despite a bid that was $200,000 higher
but the school system later reversed that decision and went with the lower
bidder.
That suggestion to Bristol was a mistake, Diamantis, a
former state Representative from Bristol, said Tuesday. He said it was made by
Sanders without understanding that the bidding process in that case required
the city to use the lowest qualified bidder because it involved companies not
on the state list.
Sanders died at age 53 on Dec. 17 in Old Lyme; his death was
ruled an overdose of cocaine, fentanyl and another substance by the state
medical examiner. “I certainly can’t say what he said and to whom he said it,”
Diamantis added Tuesday.
So no evidence of steering has emerged in Bridgeport’s
demolition job but it still raises questions. State taxpayers are on the hook
for $2.3 million of the $3.3 million bid difference, based on the 68.93 percent
state reimbursement rate on the Bassick project.
A spokeswoman for the state Department of Administrative
Services, where the school construction office is housed, said the agency did
not have an immediate comment on the Bassick High School demolition project.
Neither Bestech nor AAIS returned messages seeking comment Tuesday.
‘Less than what was required’
Bridgeport, in its written statement, said Bestech sent an
email “asking why they were not awarded the job.” The city was not able to
immediately produce that email when I requested it late Tuesday afternoon.
Diamantis said his office did not receive any emails,
letters or calls from Bestech or any other firms about the bid selection — nor
should it have, he said, since that was not the role of his office.
But in the approval minutes, and in its emails to me, the
city explained its reasoning. It was based on estimated amounts of material to
be removed.
“Quantities as laid out in the work plan provided by Bestech
were less than what was required in the documents,” the city’s statement said.
As for AAIS, in the award meeting minutes, Otero wrote, “Should they not remove
the quantities indicated in their proposal the City would receive a credit
back. Likewise, should Bestech go over quantities they would look for a change
order from the City.”
A former co-owner of AAIS, Brian T. Bannon, pleaded guilty
to a fraud charge in 2001, connected with an accused kickback of $81,000 — plus
free work at the home of a local official — to secure contracts in the first
administration of Bridgeport Mayor Joe Ganim. Ganim later served seven years in
prison in the corruption scheme and was re-elected after his release.
AAIS was barred from some state contracting in 2003, a
sanction that was upheld in state courts. In recent years the company was sold
to an out-of-state company but it still does business as AAIS. It’s unclear
whether Bannon is still affiliated with the business; his name is not mentioned
in the AAIS telephone directory.
When I asked the city officials whether they were aware of
that history, they responded with three question marks. They also said AAIS’s
status as a union company was not relevant to the bid decision. It is being
done under a project labor agreement, which would assure union labor even at an
open-shop firm such as Bestech.
Buried in all this is why the city of Bridgeport invited
only the four companies on the preapproved list to bid. What about other big
demolition firms such as Stamford Wrecking, which lodged a series of complaints
to state officials in 2020 about what it and its lawyer called improper use of
the list.
The given answer is that cities such as Bridgeport — and
there were many others — called on the list as a way to keep their projects
simpler and running smoother.
“Hazmat abatement holds up Projects the most,” Diamantis
said in his email to me Tuesday, explaining the value of the list. “The hazmat
world is inconsistent and needs attention.”
Speaking of Bridgeport, he said, “I know the town was eager
to get the project moving they were behind schedule and costs were escalating.”
Right, then. Costs were escalating, so they paid a steep
premium to a bidder. Clearly we have more questions than answers here.
GREENWICH — Neighborhood opposition is ramping up against a
plan to build a 192-unit residential building in central Greenwich that would
set aside a third of the apartments as affordable housing.
A formal application has been submitted for the seven-story
building at 35 Church St. and Sherwood Place. It calls for demolishing a number
of buildings on the block, which includes a restaurant, medical offices, a spa
and several homes.
Under the 8-30g law, which
has come under criticism by state lawmakers from Greenwich, local
land-use agencies cannot deny affordable-housing proposals except when there
are public-health or safety concerns, giving them much less latitude in the
approval process.
SJP Properties, a New York City-based real estate developer,
is working with a local developer, Eagle Ventures, on the project.
It would create a “thoughtfully designed building, which
features a contextual inspired architectural design intended to blend in with
the various historic buildings surrounding the property,” according to an
announcement from the development team.
The building would help alleviate “limited housing options
available to the town’s residents” and create housing for “Greenwich’s public
sector workers and first responders — including teachers, police officers,
hospital staff and others — who meaningfully contribute to the community on a
daily basis but are often forced to commute up to an hour and a half both ways
to do so,” the developers said.
During a preliminary and informal review of the project last
year at the Planning & Zoning Commission, neighbors and commissioners raised
concerns about traffic and overdevelopment.
An online petition was launched to oppose developing
Sherwood Place and demolishing “significant buildings.” The Greenwich
Preservation Network, founded in 2015 as an affiliate of the Greenwich
Historical Society, is calling on the community “to oppose the unreasonable
destruction of 39, 43 and 47 Church Street and 32 Sherwood Place.” Nearly
250 signatures have been digitally recorded on the petition since it
was posted to Change.org.
The neighborhood, which is known as the the Fourth Ward
Historic District, is on the National Register of Historic Places. Planning
commissioners are seeking expert advice on what the historical designation
means for the site-plan approval process.
Central Greenwich has been the focus of a building-boom in
the making.
The Planning & Zoning Commission is also set to review
plans for 110
new residential units on Benedict Court and Benedict Place, and 60
units proposed for 240 Greenwich Ave., at its next meeting March 1.
A residential complex with 30 units is under
construction on Milbank Avenue. And a number of other residential
buildings have gone up around the neighborhood in recent years.
The formal application for Sherwood Place has not yet been
placed on the agenda for the planning commission. The proposal also calls for
288 parking spaces, including an underground parking facility. The full
application was filed last week at Town Hall.
DANBURY — Hundreds of residents who participated in
workshops, focus groups and an online survey last month seemed to agree Danbury
is a “victim of its own success” and needs a new vision to guide its growth.
The outreach to 1,500 Danbury residents in January about
transportation, education, economic development and quality of life is the
latest step in a two-year process by city leaders to write a master plan for the next decade.
Overcrowded schools, traffic congestion and a downtown Main
Street that’s more thoroughfare than public square topped the list of
challenges residents shared as a result of Danbury’s steady population growth
and commercial development — especially on the booming west side.
“I expect that a lot of this will be very familiar to you
because we have been talking about it for a while now,” said Francisco Gomes, a
consultant at FHI Studio, speaking to a task force of Danbury leaders last week. “We
have a lot of input from the public and key stakeholders that are helping to
inform this process.”
The solution, Gomes said, was to come up with a master plan
that not only lays out specific recommendations to invest in the city’s future
and protect its quality of life, but also to project the vision that Danbury
wants by improving connections and communications.
“There is a need for the city and the community as a whole
to do a better job of telling Danbury’s story and the things that Danbury has
to offer (because) … I think there is some ambiguity as to the idea of what
Danbury is,” said Gomes, who has been working with the task force for the last
14 months. “There is a real opportunity for some promotional campaigning, not
limited just to arts and cultural resources but also parks and recreation and
economic development.”
The task force took the first step in outlining that vision
last week, agreeing the master plan for the next 10 years would focus on
expanding opportunities for housing, education, economic opportunity and
transportation, and “promoting all Danbury has to offer.”
With a clear vision of the city Danbury wants to be, leaders
said vitality might return to the downtown, which has languished for decades in
the shadow of its glory a generation ago.
“If there is a vision for downtown Danbury to be the
combination of a thriving community of residential, restaurants and commercial,
I think it is important that the stakeholders down there be involved and that
we recommend something that has their support,” said Richard Jannelli, a former
school board member who sits on the master plan task force.
Task force member Arnold Finaldi agreed.
“We can all have a vision of what the downtown should look
like but most of the buildings down there are privately owned, so a lot of
these downtown (landlords) have a decision to make,” said Finaldi, who is
chairman of the city’s Planning Commission. “Are they going to invest or just
let the buildings sit there the way they are now? We would hope to have
entrepreneurs with a vision for the downtown.”
The city’s vision that will guide its constituent services
and its land use decisions for the next decade is expected to take shape in the
spring and summer. The task force plans to put the findings of the last year
into a document that will be reviewed and presented for adoption at a public
hearing in November.
One of the highlights of the plan is likely to be a
recommendation for the so-called Maybrook line — a proposal that is gaining
traction with the Metropolitan Transportation Authority to run Metro-North
commuter trains from Danbury to Southeast, N.Y., creating a “one-seat ride” to
Grand Central Terminal
“The more I hear about this Maybrook line the more I like
it,” Finaldi said. “People would be able to get from Danbury to New York City
without changing trains and it would take some of the pressure off I-84. It
would change the city.”
The consultant Gomes agreed.
“It’s a very good idea to (recommend) that in the (master
plan) ... and look for opportunities surrounding that,” Gomes said. “It may
suggest some zoning work needs to be done, and we could lay some of the ground
work for that.”
Residents can add input on two bridges in New Britain slated to be rehabilitated for $7.5 million
NEW BRITAIN – The Connecticut State Department of
Transportation will host an informational session and subsequent public comment
period for two bridges that are slated to be rehabilitated in the city.
The bridges are on High Street and Washington Street in New
Britain. The virtual informational session will be aired live via the “Live
Event Links” on the Department of Transportation’s website this Thursday 7 p.m.
The rehabilitation of the bridge on High Street, listed
under Bridge No. 04247, will cost approximately $5.3 million.
The bridge is at the cross of the Boston & Maine
(B&M) Railroad, which crosses over Route 72 in New Britain. The bridge
consists of a two-span, cast-in-place concrete rigid frame structure that was
built in 1976. According to the state DOT project outline, the bridge has poor
drainage on top of the structure and water pools in several locations. Because
water leaks through cracks, maintenance routinely visits the site to remove
icicles on the underside.
Rehabilitation will consist of full depth roadway
reconstruction, addition of a waterproofing membrane, creation of positive
drainage system, reconstructing deteriorated rigid frame section joints and
other repairs. Additionally, there will be a sidewalk reconstruction along High
Street and full depth railroad reconstruction.
During construction, High Street will be closed and traffic
will be detoured approximately .25 miles long around the project site via
Columbus Boulevard, Washington Street and Myrtle Street.
The rehabilitation of the bridge on Washington Street,
listed under Bridge No. 04246, will cost approximately $2.2 million.
The bridge consists of a two-span, prestressed beam
structure with an 8-inch reinforced concrete deck supported by reinforced
concrete abutments. The project will repair the condition of the beams by
performing beam end retrofits and deck end reconstruction, which will involve
reconstructing the existing deck a portion of the deck at both abutments.
Construction will extend the deck end beyond the abutment backwall and add
approach slabs. The bridge will also get a new waterproofing membrane and the
bridge deck and approaches will be repaved.
During construction, it is anticipated that there will be
the signed detour route approximately .25 miles long that will detour traffic
via Columbus Boulevard, High Street and Myrtle Street.
Members of the public can attend the session and are open to
leave a comment, ask a question, send an email to dotprojects88-196- 7@ct.gov or leave a voicemail
at (860) 944-1111. The public comment period is open through Friday, March 11.
Residents may access proposed project plans and documents on the DOT website.
New England takes a detour on grid reform; griping ensues
It was a shocker.
Katie Dykes, Connecticut’s commissioner of the Department of
Energy and Environmental Protection, earlier this month got onboard with a
two-year delay for a key component of her pet project — reforming the New
England electric grid.
Definitely a shocker.
For nearly a decade, Dykes has railed against the operator
of the grid, ISO-New England, and the way it purchases power, saying it hinders
the build out of renewable energy, which comes from a source that is not
depleted when used, such as wind or solar power. But after building regional
momentum to change that dynamic, Dykes blinked.
Instead of ending a year from now, a key rule for acquiring
future power for the grid will end three years from now, with agreement from
Dykes.
Not that Dykes voted for the delay. But she didn’t vote
against it either. “Not opposing” was the official disposition.
“It’s a long way from not opposing to supporting,” she
explained several days after the decision.
But renewable energy advocates around the region are nothing
short of appalled and point fingers straight at ISO-NE, which they say changed
its mind at the very last minute and played an often-used trump card — that
reliability of the grid would be at stake if the rule changed next year.
“As someone who has responsibility for meeting state policy
goals and assuring that we’re doing so in an affordable, reliable way, I can’t
just outright dismiss the ISO’s rationale for this preference, i.e.,
reliability,” Dykes said. “And that’s why we didn’t oppose.”
Francis Pullaro, executive director of RENEW Northeast, a
group uniting renewable energy and environmental advocates, said the states
were put in a difficult position.
“They don’t know what the ISO needs. They’re not looking at
the system like the ISO is. I can be sympathetic to that. I have my own
perspective,” he said. “No one’s going to call me if the system collapses,
right? It’s a sensitive topic.”
Meet the MOPR
The rule in the cross-hairs is called the minimum offer
price rule, universally referred to in the energy world as the MOPR.
Once a year, the ISO runs what’s called a forward capacity
auction. It’s a low-price-wins auction to determine what generating resources
will go into its Forward
Capacity Market, the power it plans to have available three years in
advance. It gives the ISO the security that power will be there, and it
provides a commitment to potential new power sources so they can get financed
and built.
The MOPR is a key component, setting the lowest price that a
resource can offer in the forward capacity auction.
Mainly, the power projects want to recoup their construction
costs. Many, if not most, renewable and clean energy resources have
state-sponsored contracts and other sorts of subsidies, so part of those costs
are already covered. But under the MOPR, they have to factor the entire cost
into their bid, not just the uncovered portion.
Because renewable energy is still more expensive than
traditional fossil fuel power — though costs are coming down — renewables are
rarely chosen at auctions because they can’t bid low enough. Dykes
advocates a broad overhaul of how the ISO runs the grid, but the MOPR comes in
for particular criticism. She and others have argued repeatedly that the
rule advantages natural gas, preventing states from meeting their renewable
energy and greenhouse gas emissions mandates and costing ratepayers extra
money.
A little more than two years ago, after threatening to pull
out of the capacity market, Dykes
corralled all the New England states into a group to map out reforms
for the ISO. They called it the New England Energy Vision. First up was getting
rid of the MOPR.
Discussions began in May of last year. At the table: the
ISO; the states — through the New England States Committee on Electricity
(NESCOE), which represents the six New England governors’ electricity
interests; and dozens of other energy stakeholders through the advisory group
the New England Power Pool — NEPOOL.
On Jan. 11, the NEPOOL markets committee approved the only
plan on the table: ending the MOPR beginning with the capacity auction in
February 2023. That put the MOPR one vote away from termination.
About two weeks later, the
ISO released a memo in advance of the final vote. The memo supported a
plan offered by two fossil fuel power generators that would delay the end of MOPR
until 2025, effectively putting off more meaningful and cost effective
renewable energy entries to the grid until three years after that — 2028.
On Feb. 3, the NEPOOL participants committee went with that
alternative, called a “transition,” by a narrow margin. The next day, Dykes,
along with all the other NESCOE states except New Hampshire — which doesn’t
want to get rid of MOPR at all — said it would
not oppose the change.
Then all hell broke loose.
Outraged tweets, press releases and all manner of
indignation ensued. Critics called it the ISO’s “eleventh-hour change,” accused
the ISO of “turning on a dime” and labeled the move an “unnecessary lifeline to
gas generators” and “anti-competitive.”
A
letter sent by the Northeast Clean Energy Council, NECEC, to all six New
England attorneys general called it “wholly out of step with climate action
plans adopted by nearly every state in the New England region.”
“Given that this will have a chilling effect on the
integration of renewable energy into the regional capacity market until 2028,
it could have deleterious effects of reaching established 2030 climate goals,”
the letter went on.
It also noted that it would disproportionately impact
disadvantaged communities.
The letter asked that the AGs formally request the Federal
Energy Regulatory Commission, known as FERC, to reject the delay. FERC has
final say on any change to the MOPR.
Another
letter sent by dozens of advocates in the New England Offshore Wind
Coalition to NESCOE took Dykes and her counterparts to task for not showing
leadership, saying that New England “is falling behind other regions that have
already moved to eliminate discriminatory market rules like the outdated MOPR.”
Much of the ire is focused on the ISO’s claims of
reliability concerns. Clean energy advocates say the ISO didn’t specify what
reliability problems would occur if there was no delay. And they say the states
— especially Dykes, who has been leading the charge — should have pushed harder
for that information.
They continue to criticize the ISO for its often-stated
contention that fossil fuel generation, such as natural gas, is essential to
ensure the grid has enough power. That assertion has been turned on its head in
recent winters — including this one — when gas has been in short supply,
bringing the risk that electricity supplies could be strained when gas is
diverted for heating.
Reliability v. renewables
“We need to stop pitting reliability against clean energy,”
said Jeremy McDiarmid, NECEC’s vice president for policy and government
affairs. “We need to ask more of ISO than to just focus solely on reliability.
Reliability matters, to be clear. But it’s not the only thing. And we need to
find solutions to encourage the clean energy resources to come online while keeping
the lights on at the same time.”
He said reverting to fossil fuel as the first reaction to
any question about reliability on the part of the ISO has to end.
“I think that perspective misses the moment,” he said. “ISO
needs to evolve. I think we don’t want this to be a battle between reliability
and clean energy, because we firmly believe you can have both, and we need to
ask ISO to do both.”
A
recent study from Stanford University supports that belief. It finds
“that all states and regions can maintain grid stability (avoid blackouts),
despite variable and extreme weather, while providing 100% of their all-purpose
energy” from wind, water and solar power plus energy storage.
Turner Phelps, a senior attorney with the Conservation Law
Foundation pointed out that the changing technologies — energy storage and the
ability to dispatch and move power quickly around the grid as needed — mean
that renewables like solar that are considered intermittent and only suitable
for daytime use can also provide reliability.
“We don’t see reliability and climate action as mutually
exclusive,” he said. “The bigger issue is a system and a grid operator that is
not evolving with the mandates of the states in terms of energy mix. I think
that the MOPR episode is an example of that.”
Melissa Brichard, regulatory attorney for power grid reform
at Acadia Center, said the ISO has a narrow view of reliability.
“By not pursuing reliable clean options, the ISO is limiting
us to its old-fashioned and outdated perspective of reliability,” she said.
“The states need to have a real conversation about that with the ISO.”
Dykes has had plenty of conversations with the ISO. And the
MOPR situation brings up all the issues in them — unvarnished.
“You have to ask yourself: Who has confidence in the ISO-New
England’s fragile capacity market and its ability to motivate sufficient
investment in the resources that we need to keep the lights on year round
today, let alone in 2030 or 2040? I don’t,” she said. “I share the frustrations
that people have around the ISO kind of shifting its preference from an
immediate end to the MOPR to a transition proposal coming up so late in the
stakeholder process.”
But she added: “The important fundamental is that the MOPR
is ending.”
But when?
A spokesman for the ISO disputed that the eight-month
process that ended in the controversial transition had been solely focused on
ending the MOPR for the 2023 capacity auction.
“When we first announced plans to begin a stakeholder process,
we did say we would focus on the reliability of the system,” said Matt Kakley.
“We went in with an open mind.”
He pointed to delays in the last few years for major
renewable systems. New Hampshire and Maine have both turned down transmission
projects to bring in additional hydropower from Canada. Offshore wind
progressed at a snail’s pace during the Trump years, and there have been other
slowdowns due to local communities fighting transmission connection hubs and
multiple lawsuits from fishing interests.
“Resources that are retiring are on schedule, while new
resources to replace them have had delays or cancellations,” he said. “We
believe this is the best path forward.”
The transition plan does allow for a small amount of
MOPR-exempt renewables in the next two capacity auctions, but Pullaro of RENEW
said he can’t see how that or anything in the approved plan actually addresses
reliability.
“It all comes back to if you need this delay, how does the
delay keep us more reliable?” he said, pointing out that any resources coming
in at any time could be delayed. “If you could get the same outcome by just
eliminating the MOPR, how are we more reliable?”
The outcome will ultimately be up to FERC. The 60-day clock
starts ticking when the ISO files the new plan with FERC, which
it says it will do by early March. Advocates fighting the delay have
been strategizing but won’t say what their plans are. At the very least, they
will be able to file comments during the process.
FERC has a little more wiggle room than just saying yes or
no. A flat no could leave the reform advocates in worse shape than they are now
— going back to square one, while stuck with the existing system.
Ari Peskoe, director of the Electricity Law Initiative at
the Environmental and Energy Law Program at Harvard Law School, said FERC was
unlikely to just say no.
“It could find the current approach unjust and unreasonable
under federal law and tell ISO-New England what the just and reasonable
approach must be and then order ISO-New England to comply,” Peskoe said. “All
that would take more time, but there is a path for FERC to reject what is going
to be filed and effectively order ISO to file what was narrowly rejected.”
FERC could also say it needs more time to decide and/or ask
for additional hearings. Peskoe also thinks the ISO is probably prepared if
FERC comes back and orders them to submit an immediate termination of the MOPR.
That’s not out of the realm of possibility, given that FERC
has had a political makeover since the Biden administration came in. Democratic
commissioners outstrip Republicans 3-2 (no more than three from any party is
allowed). And the new chairman, Democrat Richard Glick, along with at least one
other commissioner, Allison Clements, are forcefully on-the-record for ending
the MOPR.
“The MOPR appears to act as a barrier to competition,
insulating incumbent generators from having to compete with certain new resources
that may be able to provide capacity at lower cost,” they wrote in a recent opinion.
“It is time for ISO New England to move beyond the MOPR.”
FERC is already working with two other ISOs — New York and
the 13-state PJM — to end their MOPRs.
“I’m relieved that we have leadership at FERC and a path
that ensures that, one way or the other, this practice is going to end,” Dykes
said. “It’s the ISO’s burden to make that case to FERC — that those reliability
concerns are justified.”
“It’s not the fault of renewables that we have this
reliability risk, it’s the fault of the ISO-New England’s broken market
construct,” she said. “What we’re going to be asking for is to ensure that the
MOPR ends in a clear and decisive manner. That’s what we’ve been seeking all
along.”