Delaware's beach towns offered payout to support offshore wind projects. Will it work?

Delaware's coastal towns have been offered their payout for allowing offshore wind projects to take place.

Offshore wind development company US Wind officially presented Delaware’s coastal communities a sizable investment package, signaling another step toward Delaware’s all but confirmed offshore future.

The projects have yet to receive the green light from the federal government, and concerns from residents and lawmakers about the deal already are being expressed.

There will be a meeting to learn more about Delaware's land contribution to the project next week.

Here's what to know about the offer.

What off-shore projects are going to impact Delaware?

US Wind controls the rights to an 80,000-acre lease area located off the Delmarva coast.

This area is the site of US Wind’s two ambitious projects: MarWin and Momentum Wind. Combined the projects would include up to 121 individual turbines, ranging from around 15 to 26 miles off Delaware's shores. If approved and constructed, they would be first offshore wind projects in the mid-Atlantic region.

Background: What to expect in 2024 on the development of offshore wind energy in Delaware

The federal Bureau of Ocean Energy Management (BOEM) recently issued a Draft Environmental Impact Statement assessing the potential impacts from developing the lease area and are undergoing the permitting process for the projects. BOEM is expected to issue a decision to approve or reject those plans by the end of this year.

US Wind has estimated that the projects will be able to save Delaware ratepayers up to $253 million in utility bills over the 20-some year lifespan of the turbines. This would amount to a reduction in the average ratepayer’s electric bill by an estimated $9.

Part of the plans include attaching a cable to the existing Delmarva Indian River substation facility near Dagsboro’s Indian River Power Plant. US Wind would be required to get the state’s permission to use 3Rs Beach in the Delaware Seashore State Park as a connection point for this cable.

In December, US Wind purchased 140 acres of land surrounding the Indian River Power Plant for around $20 million (the power plant itself was not included in the sale).

The company also has pledged to invest over $200 million into Sussex County’s transmission system upgrades and to pay Delaware a lease payment of $350,000 per year, with a 3% annual increase.

Delaware also will receive 150,000 free Renewable Energy Credits with an estimated value of $76 million per year.

What is US Wind offering coastal towns?

US Wind presented its benefits package to Delaware’s Association of Coastal Towns (ACT) in the towns’ public meetings in early January. The ACT is made up of the towns of Henlopen Acres, Rehoboth Beach, Dewey Beach, Bethany Beach and South Bethany.

The community benefits package includes a stream of annual $100,000 payments over 20 years, worth a total $2 million to each town.

The first $100,000 installment would be paid once construction on the wind farm began, the second payment would be issued after the turbines were attached to the power grid and the successive 18 payments would be paid to the state annually.

A contingency of the towns accepting this deal is that they cannot “take action, obstruct or delay” US Wind’s projects. This also includes pursuing litigation in the case of environmental harm or hazard.

Towns can drop out of the deal at any time, but must repay the money received by the company. Otherwise, the money is theirs to use as they see fit.

What have the towns decided?

So far, ACT Communities have begun to evaluate the offer and will proceed with discussions through their respective public meeting process. None have made a final vote yet.

Joni Reich, mayor of the town of Henlopen Acres, stated that while she credits the company for offering financial incentives to Delaware despite the project’s economic benefits likely being more Maryland-focused, she recognizes that some terms may need to be revised.

“I do think the Delaware coastal towns should also receive an economic lift given the location of the turbines and the impacts we will experience by virtue of that,” Reich said. “The funds being offered by US Wind could certainly be put to good use.”

More: Delaware Gov. John Carney plans $129.6M for environmental, climate action

Two concerns brought up by Reich are the ACT’s lack of jurisdiction in the location of the turbines and transmission lines, as well as the lack of ability to publicly comment on the installation.

Reich confirmed that the town will be holding an information session in the summer when more residents are in town.

Lynn Coan, communications manager for the City of Rehoboth, stated the city has chosen to defer their final decision until BOEM finalizes US Wind’s permits later this year.

According to Coastal Point, Fenwick Island already has opted not to accept the agreement.

Public concerns, how to give input

During South Bethany’s Town Council meeting on Jan. 10, concerns were raised by attendees including whether the town would be receiving enough money, the prohibition of the town speaking out against the project after accepting the deal, and the lack of financial safeguards in place should the project unexpectedly fall through.

Many of the ACT members stated that the money received from US Wind would be used to finance major infrastructure needs and coastline management projects.

A Senate Joint Resolution was proposed by Sen. Gerald Hocker and Rep. Ronald Gray, requiring pre-construction decommissioning bonds to be posted and that the materials used to construct the turbines are recycled or disposed of in Maryland rather than Delaware. It also calls for Aircraft Detection Lighting Systems to be installed.

If any of these individual conditions are not met, a permit would be automatically rejected, if the joint resolution were to pass.

Decommissioning bonds and Aircraft Detection Lighting Systems already are required by federal law and have been agreed to by US Wind, according to Nancy Sopko, US Wind’s Senior Director of External Affairs. But she stated that the disposal of components will be based on “technical availability of options”.

DNREC will hold a public engagement session on Tuesday, March 12 for residents to learn about the recreational impacts of the power lines being brought through 3Rs Beach. The meeting will not accept comments on the wind turbines themselves. The meeting will be held at Bethany Beach Town Hall from 4 to 7 p.m.

Molly McVety covers community and environmental issues around Delaware. Contact her at mmcvety@delawareonline.com. Follow her on Twitter @mollymcvety.

This article originally appeared on Delaware News Journal: Delaware beach towns offered payout to support offshore wind projects