Ørsted Agrees to Multi-Million South Fork Community Benefit Package

Ørsted Agrees to Multi-Million South Fork Community Benefit Package

Ørsted, East Hampton Town, and the East Hampton Town Trustees have reached agreement on the terms of a contract which would allow the installation and maintenance of the South Fork offshore wind farm’s export cable.

South Fork

When finalized, the contract, known as a “Host Community Agreement,” would provide for payment in exchange for the granting of easements required for installation of the approximately four-mile length of the onshore portion of a 138-kilovolt electricity transmission line.

The contract would go into effect only if and when the 15-turbine project located some 56 kilometres off Long Island, New York, gets state approval.

Under the terms of the agreement, Ørsted would pay East Hampton Town a total of USD 28.9 million over 25 years.

The wind farm developer would make two initial “milestone payments” of USD 500,000 each; the first, which will be nonrefundable, to be made within 90 days of the Host Community Agreement date of effectiveness, and the second to be made within 90 days of the start of construction.

Provided the project obtains Public Service Commission final approval, the developer would then make 25 annual payments, beginning at USD 870,000 the first year and increasing by two percent each subsequent year for a total payment of approximately USD 28.9 million, which includes USD 100,000 in geotechnical access and license fees already paid to the town.

A separate easement agreement, still under discussion, would impose a number of construction restrictions and conditions designed to protect the environment and insure restoration of the roadway and adjacent lands after the cable is installed and if the easement is ever terminated.

In addition to the payments, the draft agreement calls for the wind farm developer to employ a liaison to facilitate communications between the company and the commercial fishing community for the life of the project.

It also calls for the company to require its turbine maintenance contractor to establish a wind farm support facility and transfer vessel base in Montauk, provided a suitable location and required permits for such a facility can be obtained.

Ørsted will also be required to pay town property taxes on its onshore infrastructure, which is expected to amount to approximately an additional USD 4 million over the life of the project.

The South Fork Wind Farm project, formerly known as Deepwater ONE – South Fork, was independently selected by the Long Island Power Authority (LIPA) in response to the authority’s call for renewable energy projects that would tie in to the existing Cove Hollow substation and help meet local energy demands.

“Offshore wind energy represents an important component that will help the Town of East Hampton achieve its 100-percent renewable energy goal,” said East Hampton Town Supervisor Peter Van Scoyoc.

“The importance of this is only underscored when, daily, we see more and more devastating impacts of carbon pollution and climate change.”

The Public Service Commission’s Article VII review of the project has been ongoing since September, 2018, with administrative law judges presiding over public statement hearings and settlement negotiations among the interested parties. The project is also being reviewed by the federal Bureau of Ocean Energy Management (BOEM).

The 132 MW South Fork wind farm is scheduled to be operational in 2022. The project is a 50-50 joint venture between Ørsted and Eversource, New England’s largest energy company.