LIPA's 15-turbine offshore wind farm takes on another owner

LIPA’s plan for a 15-turbine offshore wind farm to power the South Fork has taken on another owner as Danish developer Ørsted has sold a 50 percent interest in the project to New England energy company Eversource.

The transaction, announced Friday morning, marks the second time in four months the $1.62 billion-plus project has taken on a new or additional owner. Ørsted in November paid $510 million to acquire the original developer, Deepwater Wind, the Rhode Island company that initially won the LIPA contract in December 2016. Deepwater built the first U.S. offshore wind project, off Block Island. 

“This doesn’t change any of our project plans,” said Meaghan Wims, an Ørsted spokeswoman. The project, which includes a 50-mile cable from the waters off the Rhode Island-Massachusetts coast to East Hampton, is expected to be in service by December 2022.

A LIPA spokesman declined to comment.

In a release, Ørsted said Eversource paid $225 million to enter into a 50-50 partnership on the LIPA project, in addition to a half-interest in Revolution Wind — a 700 megawatt offshore wind project off the Rhode Island coast — and a 275-square-mile offshore wind-lease area off the Northeast.  

The companies said wind-lease sites they jointly own could eventually host enough turbines to produce some 4,000 megawatts of offshore wind, enough to power more than 1.5 million homes.

Eversource, formerly known as Northeast Utilities, is an energy company that provides gas and electric to around four million customers in Connecticut, Massachusetts and New Hampshire. Ørsted, based in Denmark and formerly known as DONG Energy, is an energy conglomerate recognized as the largest global wind-energy developer.

The South Fork project was originally 90 megawatts, but Ørsted in November won LIPA board approval to boost it to 130 megawatts by using larger turbines, a move LIPA said would add $388 million to the cost. LIPA said that would raise the monthly cost on average bills by 20 to 38 cents above the project’s original estimated monthly bill impact of $1.19.

The project awaits a series of federal, state and local permitting approvals. 

In an interview, Thomas Brostrøm, chief executive of Ørsted's U.S. Offshore Wind operations, called the project "key for us," and said the companies were committed as ever to working with fishing groups and other stakeholders.

Lee Olivier, executive vice president of Eversource's Enterprise Energy Strategy and Business Development, noted that the company has operated and replaced major power cables from Connecticut to Long Island.

"We worked very closely with fishemern to make sure it was done properly, with the least impact on environment," he said. "We know it’s intrusive. We’ll clearly do that here" with offshore wind.

Brostrøm also acknowledged "missteps" in early communications that led a once-key backer of the South Fork project, Assemb. Fred Thiele (I-Sag Harbor), to pull his support last month. Brostrøm vowed "we will hold ourselves to the highest standard," in keeping officials and stakeholders informed. 

He also said Eversouce will join Ørsted in making a bid for upward of 8,000 megawatts of offshore wind power in a New York State request for proposal, for which bids are due next week. "We believe this will be a true win-win for the state and local communities," Olivier said. 

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.