Minutes

Semi-Monthly Meeting — Full Council — Tuesday, June 2, 2021; 5:00 p.m.
Zoom Meeting

 

In accordance with notice to member of the Rhode Island Coastal Resources Management Council, a virtual meeting was held on Wednesday, June 2, 2021 at 5:00 p.m. utilizing Zoom Meeting, and Council members participating remotely.

Members Present
Jennifer Cervenka, Chair
Raymond Coia, Vice Chair
Donald Gomez
Ronald Gagnon, RIDEM
Jerry Sahagian
Trish Reynolds
Lindsay McGovern

Staff Present
Jeffrey Willis, Executive Director
James Boyd, Deputy Director
Anthony DeSisto, Chief Legal Counsel
Ryan Moore, Moderator
Lisa Turner, Recording Secretary
Cindy Tangney, Court Reporter

1. CALL TO ORDER

Chair Cervenka called the meeting to order at 5:09 p.m. and identified the participants of the meeting, Council Members, Staff members, and applicants. The Chair stated that the meeting would be recorded.

2. APPROVAL OF THE MINUTES OF THE PREVIOUS MEETING

Chair Cervenka called for a motion regarding the minutes for the Tuesday, May 25, 2021 Semi-monthly Meeting.

Motion to approve the minutes of Tuesday, May 25, 2021.
Mr. Gagnon asked for a correction to the minutes to reflect that he voted in the affirmative to the motion of mandating that the parties meet for further discussion on mitigation package.

Motion: Vice Chair Coia motioned for approval of the minutes with correction
Second: Mr. Sahagian

Roll Call Vote:
Vice Chair Coia Aye
Mr. Gomez Aye
Mr. Sahagian Aye
Ms. Reynolds Aye
Mr. Gagnon Aye
Ms. McGovern Aye
Chair Cervenka Aye

Motion carried to approved minutes from 05-25-2021 meeting with revision.

4. SUBCOMMITTEE REPORTS

No subcommittee reports this evening

5. STAFF REPORTS

No staff reports this evening.

6. Continuation of:
Discussion and action on federal consistency decision for South Fork Wind, LLC Coastal Zone Management Act consistency certification; CRMC File 2018-10-082; offshore wind energy facility in federal waters.

Chair Cervenka explained the order of the meeting:

• Mr. Willis introductory remarks
• Mr. Boyd to present the CRMC Staff report addendum
• Southfork comment on addendum
• FAB comment on addendum
• Public Comment
• Council deliberation

Mr. Willis introduction:

• CRMC held meetings with both parties together and met with each party one on one
• Focused attempts to find solutions on the mitigation efforts
  Compensation plan
• Meeting held Monday, June , 2021 focusing on how the compensation element of the mitigation plan would be disbursed
• Developer agreed on concessions but a solution on compensatory disbursement was not agreed upon.

Vice Chair Coia asked for clarification of jurisdiction of Council on compensatory mitigation process; specifically if the Council can mandate means of disbursement.

Mr. DeSisto clarified:

• Tony in an objection we have been advised that an objection can’t be based on a dollar amount but rather on whether or not it is a sufficient amount.
• Part of the conditional concurrence is that this matter be handled similar to the Vineyard Wind conditional concurrence with side agreements that stand-alone and are enforceable.
• Proposal from staff would be time for legal counsel and staff to fashion side agreements with developer to address issues raised.

Mr. Boyd – In addition to what legal counsel clarification:

• Under OSAMP enforceable policies, mitigation shall be negotiated between the CRMC staff, the Developer and the FAB and then approved by Council
• Specifies that mitigation measure may include but are not limited to compensation, effort reduction, habitat preservation, restoration, construction marketing, and infrastructure improvements.
• In the Vineyard Wind matter, the developer, the FAB and CRMC staff negotiated a mitigation package which included compensatory mitigation and the implementation will happen through side agreement signed by Vineyard Wind and CRMC.
• We are proposing a similar measure here for the South Fork project
• Staff Addendum was read into the record and is summarized as
  • The Council accept the compensatory mitigation offer of a one-time lump-sum payment of $5.2M to be payable to the RI Fishermen’s Viability Trust within 60 days of financial close on South Fork Wind project.
  • Project minimization alternative for a maximum of 12 turbine foundations using the 11-megawatt turbine generator
  • The Council must require the developer to file a letter with BOEM modifying its project and agreeing to the State’s condition requiring the minimization alternative

Mr. Sahagian – Questions to staff

• Participation in Vineyard Wind negotiations
  Mr. Boyd stated that previous Executive Director and Legal Counsel handled the negotiations.
  Mr. Boyd confirmed that staff tried to get the best possible mitigation deal as part of the overall
  mitigation package for this project, however, staff was not successful in getting agreement from all
  parties.
  Mr. Boyd confirmed that all three parties were involved in the mitigation negotiations and that all
  information was shared in a timely manner to all parties.

Mr. Coia asked for clarification regarding the events that led to the further negotiations, different compensatory mitigation proposal and staff report addendum.

Mr. Willis explained that he had requested a meeting in which an up-front one lump sum of $5.2 million was agreed upon but could not come to agreement between Fishermen’s Viability Trust or the direct compensation and claims venue proposed by South Fork.

Mr. Gomez asked if the Council had the ability to request a provision for a CVA.

Mr. Boyd explained that BOEM will require a CVA as the project will be in federal waters and that the reports will be available to CRMC.

Chair Cervenka asked for confirmation of the present value of $12M being $5.2M and if it would cover the as far as percentage of estimated losses

• Mr. Boyd explained how CRMC used a range of estimates
• Commercial charter and recreational economic impacts as presented by both parties and FAB estimate
• 50-80% losses with 100% losses during construction period the COP states 8 month period for construction; however there are concerns that there will be extensions due to difficulty – Uncertainty
  • CRMC determined $15M over 30 years
  • FAB determined $40M over 30 years
  • Developer offered $12M over 30 years
• It is CRMC staff’s opinion that for the benefit of the fishing industry, accept one lump-sum to be put into a vehicle that will be established this summer through Vineyard Wind side agreement with the monies disbursed based on determination by a board of trustees selected by fishermen
• Chair Cervenka stated that she liked the idea of upfront lump sum payment as there is concern that deposits over a 30 year period might not provide enough in the fund in early years to cover anticipated losses and then carry through the life of the project
  • Mr. Boyd explained that CRMC staff believe it to be in the best interest of the fishermen to control the funds
• Chair Cervenka stated agreement that the reduction of turbine foundations from 15 to 12 would mitigate the impact as there would be less pile driving, less cabling, less scouring equipment
• Mr. Boyd agreed that this minimization alternative would ensure less impact and that Staff recommendation would ensure three less foundations all that entails.
• Mr. Boyd confirmed that CRMC was not able to determine which foundations would be removed; but that micro-siting would allow developers move pile within 500 foot radius and still meet BOEM requirements and the DEIS would help with potential foundation location if cannot be micro-sited and cannot glacial moraine

Robin Main, Counsel for Developer in response to Staff Report Addendum

• South Fork has agreed to $5.2M one lump-sum up-front payment
• Concern was expressed over the lack of a developed claims process which South Fork outlined and fully disclosed to all involved.
• Any claims process needs a release and South Fork is asking for the process to include a claims release
• South Fork would like to revert to original proposal to include a claims process with funding for protection on liabilities
• South Fork will also be setting up $1M radar fund for equipment and training
• South Fork is not in agreement with the request to file letter with BOEM regarding the reduction of the number of turbine foundations from 15 to 12 and does not need to amend the COP as per discussion with BOEM
• Clarified that FAB is an advisory group to the CRMC and is not a party here – South Fork as the
  developer is before the CRMC on Federal Consistency Review

Marisa Desautel, Counsel for Fishermen’s Advisory Board in response

• Thanked CRMC for opportunity to discuss mitigation after the previous meeting
• Belief that there is are severe economic flaws with the $12 and $5.2M compensatory mitigation proposal
• Expressed concern that the developer did want to put money in the FVT as they would like to take back any money left over
• The compensatory mitigation package will not make the fishing community whole and they will not agree to a claims release mechanism
• Asked the Council to object to the project
• Asked to introduce Dr. Sproul

Robin Main, Counsel for Developer

• Object to turning this into expert testimony
• New issue as to whether agreed upon $5.2 million goes into direct compensation fund or a trust
• Object to testimony over the issue of dollar amount

Chair Cervenka reminded parties that they were asked to limit comments to new elements set forth in addendum

Vice Chair Coia expressed concern regarding the allowance of witnesses as it is not proper, were only supposed to hear from Counsel representing both parties

Ms. Desautel, Counsel to FAB
Stated that the FAB is an advisory board to Council
FAB’s role is to make sure everyone understands economics of what is proposed Mr. Sproul can explain why 12M over 30 years and 5.2 M is not 5.2M

Mr. DeSisto – Counsel for the Council
Attorneys to respond to what Mr. Boyd stated

The purpose of this meeting is to hear from the public
If Council wants to provide for testimony, they must vote

Ms. Desautel to provide economic summary after public comment

There were no further questions regarding Ms. Main’s or Ms. Desautel’s statements

Meeting Break to assess commenters’ timeframe.

Public Comment (3 minutes each)

Geri Edens

• Was unable to speak due technical difficulties

In Support of project:

• David Monti, RI Charter Captain and Angler
• Scott Duhamel, RI Building and Construction Trades, RI AFL-CIO
• Michael Sabitoni, RI Building and Construction Trades Council, President; RI Laborers District
  Council
• Joe Walsh, International Brotherhood of Electrical Workers, Local Union 99, Business Manager
• David Langlais, Ironworkers of Providence, Business Manager
• Justin Kelley, RI Painters and Allied Trades, District Council 11, Business Manager
• Patrick Crowley, RI AFL-CIO, Secretary/Treasurer
• Gary Yerman, Commercial Fisherman, New London Seafood Distributors
• James McKinsey, Sea Services North American
• Laurie White, Greater Providence Chamber of Commerce, President
• James Spalt, Commercial Fisherman, New Bedford
• Nicole DiPaolo, National Wildlife Federation, Offshore Wind farm
• Dennis Lassige, North Atlantic States Regional Council of Carpenters
• Matt Linnell, Commercial Fisherman
• Tom Giordano, Partnership for RI, Executive Director
• Mike Theiler, Commercial Fisherman

In Opposition of project:

• Paul Boutiette, Recreational Fisherman
• Michael Jarbeau, Save The Bay
• Fred Mattera, Commercial Fisherman
• Katie Almeida, Town Dock
• Ian Parente, Commercial Fisherman

Close of public comment.

Ms. Desautel, Counsel for FAB summarizes response to staff addendum

• Orsted disclosed their funding analysis of how $5.2M grows over time like a savings bond
• Will only grow to $5.2M if no claims are paid out
• It appears that Dr. Sproul’s interpretation of the developer’s analysis that the fund would go bankrupt in 15 years is not understood by CRMC staff
• Based on economics, the fund would have to start at $8.1M to pay out over 30 years
• Request that the Council object based on economics

Meeting break.

Chair Cervenka questions for Mr. Boyd:

• Assertion that the findings of the staff report don’t match the conclusion or the recommendation
• Mr. Boyd confirmed that the goals of the OSAMP is to avoid impacts to the greatest extent and where not possible, appropriate mitigation required.
• Mr. Boyd stated that Orsted/Eversource recognized the need for mitigation which began many months of negotiations
• With the staff’s proposed project minimization of no more than 12 turbines out of 15 and the proposed mitigation 12M over 30 years if paid in one lump-sum of $5.2M, including all other mitigation measures, as conditionally recommended, would meet concurrence Inquired as to whether Mr. Boyd read and understood Mr. Sproul’s analysis.
• Mr. Boyd stated that staff are not economists and that they rely on information provided to us.
  • Mr. Sproul indicated that the net present value of $12M over 30 years was $5.6M but used a different value in determining a factor of the net present value than Orsted.
  • An email was receive by CRMC that conceded with was $5.2M or $12M over 30 years

Ms. Reynolds to Mr. Boyd

• After hearing Ms. Main’s concerns regarding the $5.2M being paying to Fishermen’s Advisory Tr, would staff advise any changes
• Mr. Boyd stated that the staff recommendation would stand as the staff feels that the fishermen need to control their destiny and control funds as they seem best

Chair Cervenka expressed concerns regarding the release aspect and asked if we can determine how to effectuate that aspect into the recommendation

• Mr. DeSisto stated that the claims process would be part of the mitigation stand along agreement
• Mr. DeSisto stated that the Trust instrument of Vineyard Wind has not been drawn up as of yet
• Stand alone agreement would be put in place before the expiration of stay agreement on 06-22-2021 but trust document would come at a later time

Vice Chair Coia asked what CRMC’s role would be in effectuating the direct compensation fund, third- party administrator, and releases?

• Mr. Desisto stated that CRMC would maintain the same role as with Vineyard Wind

Mr. Gagnon asked if a model could be developed to help with future projects.

• Mr. Boyd stated that staff had suggested a methodology to come up with a mitigation settlement here for the parties and recommended the use of Vineyard Wind mitigation model that was set forth last year.
• Mr. Boyd stated that the state of Massachusetts had accepted a mitigation methodology and that Vineyard Wind had recommended to offshore wind industry for Southern New England Area. South Fork Wind had rejected the use of the Vineyard Wind methodology as they did not agree with assumptions being used.
• Mr. Boyd stated that staff feels it is an appropriate method to use going forward
• Mr. DeSisto stated that on a legal basis, agree that for the next project there will be changes by CRMC
  on mitigation process.

Vice Chair Coia suggested focusing on the matter at hand

Mr. Gomez and Chair Cervenka agreed that the front end loading would be the best chance of addressing more serious impacts.

• Mr. Boyd agreed stating that is why staff is recommending $5.2M paid in one lump-sum within 60
  days of financial close going into the Fishermen’s Viability Trust which is not a direct compensation fund allowing the fishermen to be responsible for their future.

Mr. Boyd asked to be able to clarify comment made during public comment period

• Fred Matera’s comment indicating that David Kaiser had undue influence on CRMC. Mr. Boyd stated that, although CRMC did consult with Mr. Kaiser as a Federal Consistency expert with NOAA, staff developed the recommendation of conditional concurrence to that it met federal regulations and that at
  no time did NOAA dictate to CRMC what staff recommendation should be.
• Katie Almeida’s comment regarding looking at the projects holistically and that CRMC staff had been
  advocating for that at the federal government level; however, we are subject to the federal regulatory process.

7. ADJOURN

Motion: Mr. Sahagian
Second: Mr. Gagnon
Motion carried on unanimous vote

Meeting adjourned at 6:13 p.m.

 

Respectfully submitted,

Lisa A. Turner
Recording Secretary