Clarifying the Costs -Sears Island or Mack Point?
By Nancy E. Galland , Rockland MaineCampaign to Save Sears Island, Outreach Committee
Claims abound in opinion columns, editorials, and pamphlets that the proposed floating offshore wind terminal will cost less if it’s built on forested Sears Island rather than on Sprague Energy’s industrial port on adjacent Mack Point. Some estimates suggest costs are comparable, yet there is no updated, independent study to document these claims.
(https://www.maine.gov/mdot/ofps/docs/port/MaineDOT%20OSW%20Port%20Infrastructure%20Feasibility%20Study-Concept%20Design%20Report%2011-17-2021.pdf)
On July 11 of 2024, the Public Utilities Committee requested bids on the rate consumers will pay for the electricity generated by the Offshore Floating Turbine research array, testing the efficacy of the Pine Tree Wind design. Public Advocate William Harwood has concerns that the site’s development costs should be ascertained before the PUC sets the price of electricity for this untested technology.
(PDF: Maine Public Utilities Commission Docket No. 2022-100 New England Aqua Ventus June 28, 2024) https://www.pressherald.com/2024/08/01/as-the-state-looks-to-harness-gulf-of-maine-winds-a-big-question-looms-how-much-will-utility-customers-pay/
Creating a research array requires millions of dollars to build a fully developed site. Yet there’s no official Alternatives Analysis for site costs between Mack Point and Sears Island to date.
According to reports, Sprague Energy’s fully developed plan could save millions of dollars and can be ready two years sooner.
https://www.freepress.com/2024/08/13/Sprague-Says-Offshore-Wind-at-Mack-Point-Just-Makes-Sense/
The cost of destroying Sears Island’s 100 acres of forests and wetlands for untested technology that could fail is incalculable.
Maine law requires bids for electricity rates to be clearly structured to qualify as the lowest reasonable amount to coverall the costs to finance the project site development, i.e., facility construction, manufacturing and deploying the turbines, lease fees on land and ocean space, labor, plus the Project Developer’s profit margin. https://www.maine.gov/mpuc/sites/maine.gov.mpuc/files/inlinefiles/SupplOffShoreRFP.pdf
It’s important to understand that these costs apply wherever the facility is established. There’s only one PUC bid, one design, and one site - Sears Island.
Last February Governor Mills eliminated Mack Point as an option, dismissing Alternatives Analysis updates. (https://www.maine.gov/governor/mills/news/governor-mills-announces-sears-island-preferred-site-port-support-floating-offshore-wind-2024
and https://www.maineoffshorewind.org
Reading the cost comparisons in the state-hired Moffat & Nichols study (2021), I found they relied on data generated by other engineering firms dating back as far as 1983.
Without updated bathymetric data, they positioned the Mack Point docks on shallow water which would require significant dredging.
(https://www.maine.gov/mdot/ofps/docs/port/MaineDOT%20OSW%20Port%20Infrastructure%20Feasibility%20Study-Concept%20Design%20Report%2011-17-2021.pdf)
Whereas Sprague’s updated plan locates the docks on deep water, reducing dredge requirements by 85%, costing about $50 million less.
Sprague also offered to bear the expense of $30 million to improve the space on the designated site.
(https://www.mainepublic.org/climate/2024-06-12/sprague-energy-pushes-wind-port-plan-to-rival-sears-island-terminal)
Meanwhile, the costs for industrializing Sears Island have increased substantially, currently up to $760 million.
(https://mailchi.mp/e36f350c6f04/sears-island-week-in-review)
Sprague has requested a re-cost estimate based on the corrected information. The Mills administration has not yet responded, and faulty estimates are still pedaled to the public. (https://www.mainepublic.org/climate/2024-06-12/sprague-energy-pushes-wind-port-plan-to-rival-sears-island-terminal)
On either site, the State will develop the terminal’s infrastructure, from toilets to rail spurs. The State’s cost for site preparation can be supplemented by $456,000.00 in federal grants. Municipal Bonds would make up the difference.
Mack Point has most of the essential infrastructures already, reducing significant time and expense, including saving money on bond interest, and environmental damages.
https://mailchi.mp/e36f350c6f04/sears-island-week-in-review
On either site, the Project Developer will pay the State a lease fee for the exclusive use of the terminal.
According to its federal grant submission, if it’s sited on Mack Point, the State wants a 25 year lease agreement from Sprague and would rent it at a profit to the developer for $250,000 an acre per year - that’s $25 million a year for 25 years.(https://www.mainepublic.org/business-and-economy/2024-05-31/the-plans-for-maines-floating-wind-port-explained; and https://www.maine.gov/mdot/grants/infra/docs/2024/Funding%20Commitment.pdf
Significant to electricity users: the Project Developer’s profit margin from operating the terminal is based on the rate of return, i.e. the rate per kwh. That’s what must be negotiated with the PUC. (https://www.pressherald.com/2024/08/01/as-the-state-looks-to-harness-gulf-of-maine-winds-a-big-question-looms-how-much-will-utility-customers-pay/)
Furthermore, because Mack Point has essential infrastructures in place and would take two years less to develop than Sears Island, that’s two years that the State could collect $50 million in lease fees.
Reading the cost comparisons in the state-hired Moffat & Nichols study (2021), I found they relied on data generated by other engineering firms dating back as far as 1983.
Without updated bathymetric data, they positioned the Mack Point docks on shallow water which would require significant dredging.
(https://www.maine.gov/mdot/ofps/docs/port/MaineDOT%20OSW%20Port%20Infrastructure%20Feasibility%20Study-Concept%20Design%20Report%2011-17-2021.pdf)
Whereas Sprague’s updated plan locates the docks on deep water, reducing dredge requirements by 85%, costing about $50 million less.
Sprague also offered to bear the expense of $30 million to improve the space on the designated site.
(https://www.mainepublic.org/climate/2024-06-12/sprague-energy-pushes-wind-port-plan-to-rival-sears-island-terminal)
Meanwhile, the costs for industrializing Sears Island have increased substantially, currently up to $760 million.
(https://mailchi.mp/e36f350c6f04/sears-island-week-in-review)
Sprague has requested a re-cost estimate based on the corrected information. The Mills administration has not yet responded, and faulty estimates are still pedaled to the public. (https://www.mainepublic.org/climate/2024-06-12/sprague-energy-pushes-wind-port-plan-to-rival-sears-island-terminal)
On either site, the State will develop the terminal’s infrastructure, from toilets to rail spurs. The State’s cost for site preparation can be supplemented by $456,000.00 in federal grants. Municipal Bonds would make up the difference.
Mack Point has most of the essential infrastructures already, reducing significant time and expense, including saving money on bond interest, and environmental damages.
https://mailchi.mp/e36f350c6f04/sears-island-week-in-review
On either site, the Project Developer will pay the State a lease fee for the exclusive use of the terminal.
According to its federal grant submission, if it’s sited on Mack Point, the State wants a 25 year lease agreement from Sprague and would rent it at a profit to the developer for $250,000 an acre per year - that’s $25 million a year for 25 years.(https://www.mainepublic.org/business-and-economy/2024-05-31/the-plans-for-maines-floating-wind-port-explained; and https://www.maine.gov/mdot/grants/infra/docs/2024/Funding%20Commitment.pdf
Significant to electricity users: the Project Developer’s profit margin from operating the terminal is based on the rate of return, i.e. the rate per kwh. That’s what must be negotiated with the PUC. (https://www.pressherald.com/2024/08/01/as-the-state-looks-to-harness-gulf-of-maine-winds-a-big-question-looms-how-much-will-utility-customers-pay/)
Furthermore, because Mack Point has essential infrastructures in place and would take two years less to develop than Sears Island, that’s two years that the State could collect $50 million in lease fees.
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