ProvPort strikes deal to jump-start East Providence offshore wind power terminal

EAST PROVIDENCE – The organization that runs the Port of Providence has stepped in to jump-start development of a stalled wind-power terminal project eagerly sought by state and local officials.

Gov. Dan McKee held a groundbreaking for the South Quay terminal in September 2022, a before the Democratic primary, but since then there had been no progress on the project.

On Wednesday, ProvPort, the public-private nonprofit that owns Providence's former municipal port, announced that it has signed a long-term lease for the South Quay, a 33-acre rectangle of filled land on the east bank of the Providence River.

That lease will allow Waterson Terminal Services, the longtime private operator at ProvPort, to build the first phase of the South Quay terminal, a shipping and staging area for offshore wind turbines.

That first phase of South Quay is estimated to cost $70 million. Rhode Island has set aside $35 million of its federal COVID pandemic aid to build the port, and on Wednesday, Waterson Terminal Services said it will match that amount to get the project built.

“Nearly every morning for the last five years, I’ve sat in my office and looked across the bay at the unrealized and undeveloped South Quay knowing full well what it could mean to the State of Rhode Island and the offshore wind industry,” Chris Waterson, president and CEO, Waterson Terminal Services, said in a news release.

Waterson Terminal Services is able to invest that capital and stretch into the port development business because of a partnership inked earlier this month with SSA Marine, a Seattle-based global marine terminal operator, Waterson said in a phone interview.

When the South Quay terminal is built, Waterson Terminal Services plans to operate it.

The investment is also possible because Providence earlier this year approved a new 30-year revenue sharing, payment in lieu of taxes deal for ProvPort, providing financial stability for the operation, Waterson said.

Eventually, ProvPort plans to enter into a revenue-sharing agreement with East Providence for South Quay. East Providence Mayor Roberto DaSilva has been a key backer of the South Quay project.

ProvPort is leasing the South Quay from Rhode Island Waterfront Enterprises, a partnership of Massachusetts-based Mugar Enterprises and Live Nation concert promoter Don Law that owns much of East Providence's old industrial waterfront. Financial terms of the lese, which has a 50-year initial term, are not being made public, Waterson said.

The terminal is 30% designed and has received key environmental permits from the Rhode Island Coastal Resources Management Commission and U.S. Army Corps of Engineers.

If all goes according to plan, Waterson said, construction should begin by the end of 2024 and begin accepting ships in 2026, Waterson said.

Phase 1 of the South Quay project includes dredging, building a steel bulkhead, construction of a 550-foot dock and an 18-acre turbine laydown area plus utilities, lighting and security fence, according to the news release.

While the terminal will be operational after the completion of Phase 1, the full buildout of South Quay is estimated to cost $220 million, according to a Rhode Island Commerce Corporation grant application to the federal government in April.

The state has been seeking $47 million from the U.S. Department of Transportation, and Waterson said this new private investment should increase Rhode Island's chances of getting a grant.

The restart of South Quay comes during a tough time for the offshore wind industry, with supply chain hangups and inflation delaying or canceling several projects to the south.

But wind-power builder Ørsted has committed to building the Revolution Wind farm to serve Rhode Island and Connecticut. Work on that project and offshore wind developments for other states is already happening at other Rhode Island ports.

With regard to demand for South Quay, Waterson said he is optimistic about an upcoming 1,200-megawatt joint power procurement for Rhode Island, Connecticut and Massachusetts.

This article originally appeared on The Providence Journal: Staging area for wind turbines can move ahead in East Providence