EXCLUSIVE: The Biden administration quietly granted a request from an energy firm developing an offshore wind project off the coast of Massachusetts to waive development fees designed to safeguard taxpayers, according to internal documents reviewed by Fox News Digital.
The Bureau of Ocean Energy Management (BOEM) informed Vineyard Wind that it had waived a financial assurance for decommissioning costs fee in a June 15, 2021, letter obtained by watchdog group Protect the Public’s Trust (PPT). Federal statute mandates that developers pay that fee prior to construction on their lease, a potentially hefty fee designed to guarantee federal property is returned to its original state after a lessee departs its lease.
“At the same time the Department of the Interior was looking at forcing greater and more expensive bonding requirements on holders of long-standing oil and gas leases, they were relaxing these requirements on the nation’s first utility-scale offshore wind energy producer, one that just coincidentally happened to be a client of their incoming #2,” PPT Director Michael Chamberlain told Fox News Digital.
“If you want to talk about bad optics, I don’t see how they could be any worse than right here,” he said. “For an administration touting itself as the most ethical in history, this represents yet another incident in which Secretary Haaland’s Interior appears to have a tough time living up to that standard.”
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Chamberlain noted that former Deputy Interior Secretary Tommy Beadreau, the second-highest ranked official at the Department of the Interior (DOI) which houses BOEM, had, according to his 2021 financial disclosure form, previously represented Vineyard Wind on legal matters while serving as a partner at the firm Latham & Watkins.
Just one week after BOEM approved Vineyard Wind’s request to waive the development fee, Beaudreau departed Latham & Watkins and was sworn in at DOI. In an email to Fox News Digital, Beadreau, who left DOI in late October for another firm, said he wasn’t involved in the request to waive the fee and that a question about his past role posing a conflict of interest was therefore not applicable.
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According to the documents obtained by PPT, BOEM said Vineyard Wind wouldn’t be required to pay the development fee until 15 years after the project enters operations under its 20-year power purchase agreements. The documents indicate that Vineyard Wind first submitted the request in December 2017, but that the Trump administration rejected it, forcing the developer to resubmit it in March 2021.
In its June 2021 letter to Vineyard Wind, BOEM explained it would waive the fee because the project included risk reduction factors including insurance policies to cover any catastrophic event that damages operations, use of proven wind turbine technology, and the use of power purchase agreements “with guaranteed electricity sales prices that, coupled with the consistent supply of wind energy, ensure a predictable income over the life of the project.”
The letter also stated that the “regulatory departure” would reduce Vineyard Wind’s financial assurance burden, enabling the developer to invest freed-up capital in construction and enabling the project to enter operations sooner. In addition, it explained the fee was waived also because it “promotes the production and transmission of energy from a source other than oil and gas.”
And Meredith Lilley, an energy program specialist at BOEM, acknowledged in an internal email at the time, also obtained by PPT, that waiving the fee by August 2021 was vital to ensure Vineyard Wind could “secure financing and achieve financial close.”
The 800-megawatt Massachusetts project — a joint venture between Danish energy developer Copenhagen Infrastructure Partners and New England utility services company Avangrid — was first proposed years ago, but was fast-tracked once President Biden entered office. In May 2021, the DOI formally approved the project, marking the first utility-scale offshore wind farm to receive federal approval.
Then, in July 2021, BOEM approved Vineyard Wind’s construction and operations plan and, four months later, DOI Secretary Deb Haaland joined then-Massachusetts Gov. Charlie Baker and other officials for the commemorative groundbreaking of the project in Barnstable, Massachusetts.
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“Vineyard Wind 1 represents a historic milestone for advancing our nation’s clean energy production. This project and others across the country will create robust and sustainable economies that lift up communities and support good-paying jobs, while also ensuring future generations have a livable planet,” Haaland said during the ceremony on Nov. 18, 2021.
“The Interior Department is committed to responsibly accelerating our nation’s transition to a clean energy future, and doing so in coordination with our partners, stakeholders, Tribes and ocean users to avoid and reduce potential impacts as much as we can,” she continued.
Since BOEM’s approval of Vineyard Wind, it has green-lit five other utility-scale offshore wind farms as part of Biden’s goal of deploying 30 gigawatts of offshore wind energy capacity by 2030. However, one of those projects, the offshore New Jersey project Ocean Wind 1, was axed by its developer in October due to various economic factors.
Meanwhile, the Biden administration has taken aim at the oil and gas industry. Despite waiving development fees associated with green energy production, the DOI unveiled a plan in July to revise bonding requirements, royalty rates and minimum bids for onshore fossil fuel leasing, an action that will raise costs for developers.
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“Amidst a global energy crisis, this action from the Department of the Interior is yet another attempt to add even more barriers to future energy production, increases uncertainty for producers and may further discourage oil and natural gas investment,” Holly Hopkins, the vice president of upstream policy at the American Petroleum Institute, said in a statement at the time.
“This is a concerning approach from an administration that has repeatedly acted to restrict essential energy development.”
BOEM and Vineyard Wind didn’t respond to requests for comment.