Court Fight Begins Over Revolution Wind Project as Lamont Awaits Federal Deal
OLD SAYBROOK — The legal battle to restart construction of the Revolution Wind farm began this week, as political negotiations stalled despite Gov. Ned Lamont’s openness to a federal deal to unblock the project.
The project developers — Danish energy giant Ørsted and
Skyborn Renewables, owned by a BlackRock subsidiary — sued the
Trump administration on Thursday for halting construction of the wind farm,
arguing that the decision was invalid because it had been issued without
statutory authority and violated due process. They request a preliminary
injunction to prevent the stop order enforcement.
On the same day, the attorneys general of Connecticut and
Rhode Island sued the
federal government, arguing that the decision violated the Administrative
Procedure Act and the government’s authority under the Outer Continental Shelf
Lands Act. Both laws “require reasoned decision-making, fidelity to legal
boundaries, and respect for the established expectations of sovereign states
and regulated parties,” the lawsuit states.
Lamont criticized the federal government’s lack of response
in a statement released by the Connecticut Attorney General’s Office, but left
the door open to negotiations.
“It’s been nearly two weeks, and the Trump Administration
still has not explained or justified its decision to halt construction of
Revolution Wind,” Lamont said in the statement. “While this is unacceptable,
there is still a path forward if Washington is willing to be a partner.”
On Aug. 22, the Bureau of Ocean Energy Management issued
a stop-work
order for Revolution Wind based on unspecified national security
concerns. The order follows the policy established by a presidential memorandum
earlier this year and Trump’s view of the industry, which he has described as
ugly, expensive and unreliable.
Revolution Wind was just one target of Trump’s crackdown on
the wind energy industry, which included not
approving any new projects, suspending others under construction and
eliminating industry-related subsidies.
On Friday, the Department of Transportation announced it
would terminate
or withdraw $679 million in federal funding for 12 projects aimed at
supporting offshore wind energy. One of them was a $10 million grant for
operations and maintenance of the Bridgeport Port Authority in Connecticut.
In the last few days, the federal government also announced
its intention to suspend two projects in Massachusetts — New
England Wind, owned by Avangrid, and SouthCoast
Wind — and another in Maryland.
The three projects had approved permits, but construction had not begun.
In April, the federal government also halted construction of
Empire Wind, developed by Norwegian Equinor, in New York. A month later, work
resumed following negotiations between the federal government and Gov. Kathy
Hochul. Part of the agreement included allowing the Constitution gas
pipeline to be built to bring gas from Pennsylvania to New York, a
project that had been cancelled in 2020.
The Empire Wind precedent was cited in the early days after
Revolution Wind’s pause as a possible path forward, but so far, it has not
worked.
Cancellation risk
According to the Revolution Wind developers’ complaint,
the length of the suspension increases the cancellation risk.
They argued that the project required specialized vessels
with limited availability, and if those ships left for other commitments, the
delay could last more than a year or force cancellation of the project.
The developers said they had already invested nearly $5
billion in the project and anticipated $1 billion in breakaway costs in the
event of cancellation.
Revolution Wind was at an advanced stage of construction
when it was paused, with all underwater foundations and 45 of the 65 turbines
installed. Built about 15 nautical miles off the coast of Point Judith, Rhode
Island, it would have a capacity of 704 megawatts, enough to power about
350,000 homes in Connecticut and Rhode Island.
According to a fact sheet released by the Connecticut
Department of Energy and Environmental Protection, Revolution Wind created more
than 1,200 local jobs, including more than 100 directly at the State Pier in
New London, which was redeveloped into a platform specifically for the offshore
wind energy industry. Those jobs would be lost if the project were canceled.
DEEP also stated that Revolution Wind had been vetted
through a nine-year process involving the U.S. Department of Defense. It
obtained all necessary federal and state permits in 2023 under former President
Joe Biden and is expected to become commercially operational in 2026.
DEEP warned that suspending the project could jeopardize
grid reliability, since it was set to provide 2.5% of New England’s electricity
next year. Without it, power shortages during heat waves or cold snaps could
raise the risk of rolling blackouts.
Trump’s anti-wind energy policy adds further pressure to an
industry already struggling.
In 2023, Avangrid canceled the
Park City Wind contract in Connecticut, and Ørsted also canceled its contracts
in New York, New Jersey and Maryland. The sector as a whole suffered setbacks
in 2023, with projects canceled or delayed despite federal support and
incentives under the Inflation Reduction Act.
In 2024, Eversource sold its stake in Revolution Wind to
Global Infrastructure Partners, a company owned by BlackRock, the world’s
largest asset manager. Late last year, Connecticut pulled
out of the tri-state auction it had announced with much fanfare a year
earlier.
‘We just don’t know’
The Connecticut Port Authority held its first meeting on
Thursday since the Revolution Wind project stalled. Michael O’Connor, the Port
Authority’s executive director, said he was not aware of any negotiations
regarding the project.
“There are no rumors or discussions that have been made that
would tell us that, ‘Hey, here’s the sticking point and these are the people
working on it and we’ll find out in two days, 10 days, seven weeks.’ We just
don’t know,” he said. “We could wake up tomorrow morning and find out that they
rescinded the halt order.”
O’Connor said the project had received federal approval to
install the 47th turbine and that ships from Europe would continue delivering
generators, tower sections and turbine blades, but that further cargo delivery
was on hold.
“There’s no real impact on what we were expecting to see
from the State Pier, if this is just a short-term interruption,“ O’Connor said.
”We have a revenue stream from the state here for the lease arrangement from
Ørsted.”
Felix Reyes, New London’s director of development and
planning, said questions had lingered during the State Pier redevelopment about
what would happen if the wind industry stalled. He said he considered future
subleases for the property.
Kevin Blacker, a vocal critic of the State Pier
redevelopment project, criticized the Port Authority’s “narrative” that the
State Pier could have uses other than wind energy and said Trump’s decision to
halt the project was “totally foreseeable.”
“There has to be a discussion of the reckless and cavalier
risk and gamble that you took with taxpayers’ money on offshore wind and you
filled in 7.4 acres of the only deep water port between here and Providence,”
Blacker said. “You ripped up the railroad tracks. Sure, you can put them down,
but at what expense and in how much time? You tore down the warehouse which was
used to which was such an asset to the port.”
The State Pier redevelopment project has been controversial
throughout the years, from its inception in 2019 with a $93 million budget to
the present day, with a $311 million cost and pending disputes with the builder
that could further increase the final cost.
O’Connor said
it was unclear if Revolution Wind would continue and whether Sunrise Wind would
begin next year. Asked about the risk of Ørsted terminating the contract, which
would affect the Port Authority’s revenue stream, O’Connor said he did not
recall any termination clause, although there was “some force majeure wording
in the contract.”
“I would expect that as long as they made the lease payments
and there was space taken up at the State Pier, we’re in business with them up
to and including. If they had to make use of the pier to undo anything that
they constructed, they would certainly need this as a resource to go backward,
too,“ O’Connor said. ”Nobody’s looking to do that, but I’ll make sure that we
understand what the trigger points are for terminating our agreement with
Ørsted.”
Port Authority seeks $11M grant to continue Buckeye operations in Groton
Greg Smith
Groton — The Connecticut Port Authority is working with the
owners of Buckeye terminal — a major diesel and home heating oil distribution
site — to secure a federal grant that would ensure its continued operations.
The port authority's board on Thursday voted to approve a
memorandum of understanding with Buckeye to apply for more than $11 million in
federal funds to improve the infrastructure at the terminal's 17-acre site off
Eastern Point Road. Buckeye notified its customers in April that it was
evaluating the long term viability of its operations, news that was met with
dismay by local suppliers worried about the implications of a closure.
Connecticut Port Authority Executive Director Michael
O'Connor said Buckeye's marine terminal is an important coastal resource and
regional asset that distributes millions of gallons of home heating fuel and
diesel for marine vessels. The facility supplies 100,000 gallons of diesel a
week to local ferries during the busy season, O'Connor said. Fuel now comes
into Groton by water but would have to come by truck if the facility closes.
"That's a lot of trucks on the highway. The minute
(Buckeye) isn't in service we'll see a big change around here and we don't want
to see that change," O'Connor said.
The port authority plans to apply for the grant through a
program of the federal Department of Transportation's U.S. Maritime
Administration Port Infrastructure Development Program. The competitive grants
are awarded "to projects that improve the safety, efficiency, or
reliability of the movement of goods into, out of, around, or within a
port."
O'Connor said the grant is not available to private
businesses, which is the reason for the involvement of the port authority. He
said as much as $11.25 million is available for Buckeye's facility. If the
grant is approved, Buckeye would be responsible for 20% of the project cost. As
much as $14 million could be invested in Buckeye's facility, O'Connor said.
Buckeye has previously announced it would continue home
heating oil supplies at least through the 2026 winter season. Groton City Mayor
Keith Hedrick said he has already written a letter supporting the port
authority's plan to apply for a federal grant.
"This is a regional issue," Hedrick said.
"They play a crucial role in providing home heating oil in this region and
beyond. If it goes away, we would have a crisis, particularly coming into
winter and trying to determine where to get oil from."
If suppliers were to have to travel to facilities in
Providence or New Haven, Hedrick said he would expect prices to go up.
Additionally, Hedrick said no one wants to see tankers clogging an already
congested Interstate 95. Should Buckeye close, decommissioning of the site is
another worry, Hedrick said.
He added heating oil stored at the site is part of the U.S.
Department of Energy’s Northeast Home Heating Oil Reserve, designed to provide
protection in the event of disruptions to the supply.
The deadline for the federal grant application is Sept. 10
and because of an accelerated timeline, O'Connor said he hopes to have an
answer by December.
"The federal government wants to invest in
infrastructure. This money would be invested in important infrastructure. I'm
very optimistic this will get approved," O'Connor said.
In a statement released last week, Buckeye said it
"continues to work closely with our customers and local officials in the
Groton area to understand and address their concerns regarding heating oil
supply for the approaching winter season."
"The facility will remain open and operational through
at least this winter season, which Buckeye has communicated directly to
concerned parties. As always, we will work hand in hand with our customers and
other stakeholders to ensure we meet the critical energy needs of the
communities we serve," it said.
Buckeye's facility was purchased from Hess Corp. in 2013 for
$5.68 million, records show.
Connecticut has no problem attracting companies looking for
warehouse space, but the state has significant challenges when it comes to
building more of it, according to developers.
“This is a great regional distribution hub,” said Brian Ker,
president of Snowball Development, during Hartford Business Journal’s third
annual Cranes & Scaffolds commercial real estate conference held Wednesday
at the Aqua Turf Club in the Plantsville section of
Southington.
Ker spoke on a panel that discussed the state’s industrial
real estate market. Other speakers included moderator Mark Duclos, president
of Sentry Commercial; David A. DeMaio, president of Pat Munger
Construction Company; Brian Ker, president of Snowball Developments; Daniel
Madrigal, director of development of Scannell Properties; and Nicholas Morizio,
president of Connecticut and western Mass., of Colliers.
Ker said a lot of smart companies have already established
large distribution footprints in the state, including Uline, a Wisconsin-based
distributor of shipping, industrial and packaging materials that is
building a 1.25 million-square-foot warehouse in Plainfield, and retail giant
Amazon, which plans to open its 17th distribution center in the town
of Plainfield this October.
“… Other tenants are going to come a little late to the game
and realize they probably should have showed up three years earlier,” Ker said.
He pointed to New York’s much higher industrial lease rates
as a major reason why so many companies flock to Connecticut for space. He said
leases in Westchester County, for example, are as high as $26 per square foot
and require the tenant to also pay for property taxes, property insurance and
maintenance.
By comparison, Snowball, which
has been one of the most prominent buyers of industrial buildings in the state,
is charging as low as $7 per foot for some industrial properties it owns in
Connecticut, he said.
Ker said lower lease rates and Connecticut’s excellent
location — with access to major highways and 23 million consumers within a
200-mile radius — should boost industrial real estate markets in Southington,
Waterbury, Hartford and other towns and cities across the state.
“How is Danbury not going to be a $15 market as tenants flee
$25 rents?” he said.
Lots of hurdles
Still, there are many challenges impacting the industrial
market, including a lack of available space.
“It’s just there’s nothing out there,” said Morizio, of
Colliers. “Unless you’re willing to go into an older building that has a lot of
problems, which none of them want to do, you’re going to have to pay more
rent.”
Ker said the Hartford region’s industrial property vacancy
rate has fallen to around 4.5%, while developers are hesitant to build — and
banks are reluctant to finance — construction of new facilities due to rising
construction costs and other factors.
There are little options currently available for tenants
seeking over 100,000 square feet, Ker said, leading to higher rents.
The state’s high energy costs and cost of living pose
additional challenges to the market, said Demao, of Pat Munger Construction.
“That drives the cost of getting that widget out the door,
and driving people either away from Connecticut or not coming in,” he said.
“That’s a big deal.”
DeMaio agreed with Ker on the state’s optimal location and
lower lease rates, but he also pointed out that Connecticut has one of the most
difficult permitting processes in the country, which acts as a major roadblock
to new development.
“New England, in general, is very, very difficult. It’s
actually getting worse,” he said of the local permitting approval process.
“We’ve spoken a lot at some of our association meetings about trying to get
legislative bodies to look at zoning regulations on a regional basis, versus a
town-by-town basis.”
He said a developer can spend 18 months getting all the
necessary municipal approvals before putting a shovel in the ground.
“That costs people a lot of money,” he said.
Daniel Madrigal, director of development with Scannell
Properties, said it never hurts to foster a positive rapport with planning and
zoning officials when trying to get projects approved.
“When we’re working with the tenant and we first meet with
the town, some of them have literally rolled out the red carpet,” said
Madrigal, whose firm is eyeing
construction of two new warehouses in Windsor Locks. “They wanted the
deal.”
The arrival of national commercial real-estate developers
like Scannell into Connecticut’s market is helping to add more inventory, said
Duclos, the panel’s moderator.
“When I first got into this business 40 years ago, it was
100% a local market. Everything was smaller space,” Duclos said. “There were no
national investors or developers in the marketplace.”
Gov signals new gas supply support
Gov. Maura Healey signaled support for Eversource’s proposal
to lock in more natural gas for Massachusetts, offering an indication she sees
the fossil fuel as an important part of the state’s energy mix even as her
administration presses forward with longer-term climate goals.
“We appreciate this 10-year proposal. Massachusetts and the
Northeast need more energy supply for reliability and to lower energy bills.
That’s why we are committed to an all-of-the above approach to energy
resources, and gas continues to play an important role in our overall energy
supply,” Healey said in a statement.
The governor’s remarks followed Eversource Energy’s filing
with state regulators for approval of a decade-long contract to purchase
additional natural gas from an upcoming expansion of the Algonquin Gas
Transmission Pipeline.
Enbridge said Tuesday it had reached its final investment
decision on the expansion project, predicting it would “increase reliable
supply and improve affordability by reducing winter price volatility for
customers.” Enbridge expects to complete the project in 2029, subject to
regulatory and government approvals.
Eversource said the deal would reduce reliance on costly,
imported liquefied natural gas from the Everett Marine Terminal, cut customer
bills by roughly $400 million over ten years, and avoid any increase in
greenhouse gas emissions since it replaces an existing supply contract.
“As part of our continued focus on affordability and
reliability for customers, we’ve entered into a precedent agreement with
Algonquin over a 10-year period to purchase additional natural gas supply from
a proposed capacity expansion project,” Eversource spokesman William Hinkle
said Tuesday.
The company has asked the Department of Public Utilities to
issue a decision by February 2026, ahead of a March 1 deadline written into the
agreement.
Repeating a phrase she’s touted before, Healey said at a
public event hosted by Bloomberg on Wednesday that she supports an “all of the
above” approach to energy.
Asked whether that strategy includes new natural gas
pipelines in Massachusetts, the governor reiterated her support for the
Eversource project.
“I consider any proposals that come our way. In fact,
Eversource, one of our utility companies just filed a proposal for 10 years
that I personally support because we need some near-term solves to the supply
issue that we have right now in the Northeast,” she said. “This is an issue
that we see across America, but I think it’s particularly acute for the
Northeast region of the country.”
Healey’s support comes as her administration manages
turbulence in other parts of the energy sector.
The state last month paused its next offshore wind
procurement until at least 2026, citing delays in federal permitting and
ongoing contract negotiations.
President Donald Trump’s administration recently ordered a
halt to the nearly completed Revolution Wind project off the New England coast.
Grid operator ISO New England, which had counted that power into its near-term
supply plans, warned that “delaying the project will increase risks to
reliability” of the grid.
At the same time, the DPU has taken steps to wean the state
off new fossil fuel infrastructure.
Last month, regulators barred utilities from spreading the
cost of new gas hookups across existing customers, part of an effort to
discourage system expansion, Commonwealth Beacon reported. They are also
reviewing gas company climate compliance plans to ensure operations align with
legally binding emissions targets.
Environmental advocates said regulators should carefully
weigh whether more gas infrastructure is the right path.
“Acadia Center is reviewing the proposed pipeline expansion
project, which responds to the task given to gas utilities by the DPU to
phase-out reliance on Everett Marine Terminal,” the group said in a statement.
“Phasing-out reliance on EMT should be done first with all available clean
energy solutions, rather than with expanded gas pipeline supply.”