Offshore wind compensation programs open for Mass. fishermen

With two offshore wind projects (partially) up and running, Massachusetts fishing permit and vessel owners may now enroll in compensation programs to cover economic losses caused by the construction and operations of wind farms. The millions in funds are available to fishermen of certain states, but depending on the state they fish out of or the project they’re affected by, they’ll encounter different rules and conditions in order to receive that compensation. 

Because the projects and funds are independent of (and different from) one another, fishermen must apply separately to be eligible for each program. This process, and criticism of it, have prompted efforts underway at the state and national level to establish a regional or national fund that would standardize and simplify the process across states, fisheries and developers. 

Fishing vessels are not barred from transiting or fishing in the wind leases once construction is completed. However, some captains are wary of towing their nets within and may outright avoid the arrays, where turbines are spaced one-nautical mile apart and linked to one another via high voltage cables buried at least 5 feet deep. 

Developers are encouraged to follow a hierarchy when it comes to project impacts: first avoid, then minimize, then mitigate. Compensation falls within that last step. When other options (like avoidance of a fishery) are not possible, developers mitigate those impacts through these financial compensation programs. 

Vineyard Wind’s program

Vineyard Wind entered an agreement with Massachusetts in 2020, establishing a $19 million fund to compensate affected fishermen and shoreside businesses that provide goods or services to the fishing industry.

“The launch of these funds is the latest example of our commitment to working with the fishing industry to create successful programs together,” said Crista Bank, the fisheries manager for Vineyard Offshore (Vineyard Wind’s parent company), when the program opened this month. “We’ve also employed dozens of fishing vessels to work on different scopes of the project, a model we hope to expand as we develop projects around North America.”

The developer established a separate “innovation fund” of about $1.75 million, overseen by the state’s Division of Marine Fisheries. Those funds are not meant to cover losses, but to help the fishing industry coexist with offshore wind. 

This could come in the form of gear adaptation and vessel upgrades, or research into the impacts of offshore wind on fisheries. DMF hasn’t yet earmarked or spent the funds.

Direct impacts or losses for which claims may be filed include lost revenue or higher expenses related to the project’s interference with fishing activities. This could look like displacement from fishing grounds, reduced catch in and around lease areas, insurance premiums, and an increase in transit time to get through or around the wind arrays.  

Fishermen won’t need to demonstrate economic impacts from the project (beyond the requisite eligibility terms) in order to receive compensation. Once they are deemed eligible by the fund administrator, they will receive payments. If they stop fishing, payments will cease.

Vineyard Wind is not involved in the administration of the program, which includes reviewing applications, determining payment amounts, and addressing appeals or disputes. That work will be overseen by Major Sharpe, an accountant based in Tennessee with the firm, de maximus. 

The firm will review and approve applications “with support from fishery advisors”: the Massachusetts Lobstermen’s Association on behalf of fixed gear fisheries, and the Commercial Fisheries Center of Rhode Island for mobile gear fisheries. Sharpe confirmed the advisers will look at every application.

He said during the first week that the launch of the program went well: “We spent considerable time working with stakeholders to set up a process that would be user-friendly and simple to understand and apply.”

Vineyard Wind is hosting three meetings this week (one in New Bedford) where attendees can ask questions and enroll in the program. Sharpe plans to be in the area to meet directly with the industry.

The firm will launch a separate program for shoreside businesses in the near future, but hasn’t specified when. Similarly, shoreside businesses will not be required to demonstrate economic impacts from the Vineyard Wind project in order to qualify for the program or receive payments.

As for captains and crew, the owners and operators are “strongly encouraged to share annual compensation payments” with them, but the program does not require it. 

Applications are due in June, and members of the fishing industry will not have another opportunity to qualify for the program. 

Avangrid spokespersons did not respond to a series of questions about the program after repeated requests from The Light. 

As of this month, Vineyard Wind has installed 11 of its 62 turbines south of Martha’s Vineyard. Vessels have continued to carry turbine parts to and from New Bedford through the winter, and the project expects to complete buildout this year.

South Fork Wind’s program

Like for the Vineyard Wind project, fishermen seeking compensation from Orsted for its 12-turbine project south of Rhode Island must apply for eligibility. 

South Fork Wind entered an agreement with Massachusetts in 2021 that established a $2.6 million fund to compensate affected fishermen; $2.1 million will go toward direct compensation (the processing of claims), while the remaining $500,000 will be used to fund research, navigation training, and fishing vessel upgrades.

Fishermen deemed eligible for the direct compensation program will also be eligible for the navigation and training program. 

The project also established a community fund for Massachusetts, which can be used to fund initiatives and research projects. Money earmarked for direct compensation that remains unused will be reverted to this community fund.  

While shoreside businesses are eligible to receive grants from the community fund, they are not eligible for direct compensation, per the fund site. 

Accounting firm PKF O’Connor Davies will review eligibility and claims on behalf of Orsted. Once a fisherman is confirmed eligible, he or she may submit a separate application for compensation. 

Fishermen will not receive compensation from Orsted for several listed reasons, including declines in stock caused by climate change, and “environmental changes unrelated to [South Fork Wind].”

Asked how one would provide evidence supporting or refuting the role of other factors, a South Fork Wind spokesperson directed the question to the firm overseeing the program. PKF O’Connor Davies did not respond to questions. 

Per the program, each claim will be individually reviewed based on a “series of factors.” 

Asked what those factors are and who at the firm makes that determination, the fund administrator did not respond. 

Under South Fork’s program, Rhode Island fishermen may appeal if they are denied eligibility or a claim. However, Massachusetts fishermen may not. 

Applicants have up to two years following a loss to submit a claim.

Issues with the current process

Due to a lack of a standardized system, compensation to-date has been decided on a project-by-project and state-by-state basis, as is manifest by the first two projects.

“This has resulted in inconsistencies in estimating impacts to fisheries and the agreed-upon funds used to compensate for such impacts,” wrote nine Northeast states in a 2021 letter to the U.S. Bureau of Ocean Energy Management, noting the current approach can create inequities for the fishing and wind industries.

In 2022, those states set out to develop a regional fund amid an absence of any federal framework or authority. Firms seeking to design the program are submitting their proposals this month, with the hope the program can be up and running by mid to late 2025.  

Kris Ohleth, executive director of the Special Initiative on Offshore Wind, a nonprofit that has been working with the states, previously told The Light the fishing industry has been a “little confused” by the separate processes for the wind projects.

“As these offshore wind projects are developed all on the Eastern Seaboard, there is a need for more consistency and at the same time more simplicity of how a fishing business owner could obtain the mitigation that they are rightly eligible to receive,” said DMF Director Dan McKiernan.  

“I think that this 11 states initiative is an attempt to make that more streamlined and more consistent,” he continued. “For these fisheries which are taking place predominantly in federal waters, it’s better to have a more comprehensive and regional approach to these compensation packages.”

Eric Hansen, who serves on the Responsible Offshore Development Alliance (RODA) board, said he hopes the 11-state initiative will come to fruition and offer the fishing industry a more streamlined, consistent process to apply for and receive compensation for impacts.

Jim Kendall, a retired New Bedford fisherman who consults with wind developers to bring the fishing industry’s concerns to the table, also agrees with a regional effort.  

“You can develop a board that would cover both the fishermen’s interests and concerns with someone from the wind industry to make sure it doesn’t run amok,” he said.

In the interim, he said the fishing industry shouldn’t turn away from the programs that are available, even if they are imperfect. 

“Fishermen need to look at this closely, and if it affects or impacts them in any way, to make sure they take advantage,” he said. “A lot of times fishermen will turn around and say to hell with it. But they should put in their claim and see how it goes rather than assume it’s not going to work.”

More than a dozen other projects (meaning potentially as many compensation programs) are at various stages of permitting, which could generate more confusion for the fishing industry. 

Revolution Wind and Sunrise Wind, both Orsted projects, last year established separate funds with Massachusetts. It remains to be seen whether those programs will follow the design and claims process of that established for South Fork Wind. 

There are already notable differences between the first two programs with South Fork Wind and Vineyard Wind. 

One will directly compensate eligible shoreside businesses; the other won’t. One requires fishermen to prove the losses are due to the wind farm (and not other factors, such as climate change); the other doesn’t require that level of proof. One has an appeals process if fishermen are denied access to the program or payment; the other does not allow appeals for Massachusetts fishermen.

South Fork’s program specifies that its compensation program will not cover reduced quotas, area restrictions enforced by fishery managers, and “general declines in stock … caused by climate change.” 

“Just that line alone in there is a really, really high bar for fishermen to prove,” said Kevin Stokesbury, longtime fisheries scientist and dean of the UMass Dartmouth School for Marine Science and Technology. “It is really hard to pull out those pieces between, is it because of the manmade structure, or is it because of general climate change?” 

The wind farms may also limit or preclude fisheries surveys, which can affect fishing regulators’ decisions. For example, if data is missing or insufficient, it can increase regulators’ uncertainty of a stock and result in reduced fishing quotas.

In that way, the decision by regulators to reduce a quota may be linked with (not independent of) the wind farms.

One could measure impacts with “before-after control-impact” studies. Scientists gather data in two areas before, during and after construction of a wind farm (with one area serving as the control), in order to measure changes brought by the new variable: the turbines. 

“That’s really the only way you can do it and do it statistically,” Stokesbury said. “For a fisherman to do that, I don’t know how they would do that.”

Developers have undertaken some monitoring work at the different project stages, including Vineyard Wind, but Stokesbury said BOEM’s recommendation to developers of one year at minimum is not sufficient. He recommends three years of monitoring and data collection at minimum to accurately measure potential wind farm impacts on marine species.

Fishery councils and the New Bedford Port Authority have also requested BOEM mandate at least two to three years of monitoring prior to construction — and at regular intervals through the project’s operational life — in order to effectively measure project impacts and thus the appropriate amount of compensation. 

Critics frame this issue as a burden of proof problem, stating the government and developers are unfairly placing the burden on the fishing industry to prove the impacts.

“The Guidance is not clear on who carries the burden of proof to demonstrate impacts from [offshore wind],” said RODA in a 2022 letter to BOEM on its draft guidelines to the wind industry for mitigating impacts. 

“Presumably impacts will be revealed through environmental monitoring, but the Guidance fails to specify any requirements for standardization, coordination, or minimum expectations for monitoring,” RODA’s letter continued. “Without diligent forethought in how to properly set up monitoring, it will be extremely difficult to decipher evidence of impacts from [offshore wind] development.”

BOEM’s draft guidelines include a brief section on financial compensation, which discusses how developers might go about fairly calculating economic losses from displacement. The guidance also recommends that developers consider including an appeals process to resolve claim disputes with fishermen. 

The agency’s final guidance will be available this year, and will likely be more a set of recommendations than requirements. 

The fishing industry and scientists also remain concerned about cumulative impacts and how compensation programs will address them. Vineyard Wind and South Fork Wind are the first two major projects in the water, but the federal government is in the process of reviewing or approving more than a dozen on both coasts, the Gulf of Maine, and the Gulf of Mexico. 

“There’s going to have to be some kind of mitigation fund created that compensates for the entire region,” said Stokesbury. “You put all these [farms] together, you can’t just assume it’s going to be an additive effect, especially when you’re taking energy out of the system in terms of wind and current.”

“That’s a cumulative effect you won’t be able to detect for a few years,” Stokesbury said. “People might say how can we mitigate that? How can we compensate for that? But it’s still an effect.”

The New England and Mid-Atlantic Fishery Management Councils have said BOEM’s draft guidance on mitigating impacts to fisheries has a “serious shortcoming” regarding cumulative impacts.

“The multiple wind energy projects planned along the east coast will have cumulative and compounding effects on our fisheries,” they wrote in 2022. “The synergistic effects of multiple projects may be more than additive and this may not be sufficiently identified in project-specific documents; therefore, losses may be undercompensated by taking a project-by-project approach.”

New Bedford for more than two decades has been the highest-value fishing port in the United States, bringing in hundreds of millions each year, largely with sea scallops.

Maps show the Vineyard Wind and South Fork Wind leases do not overlap significantly with scallop fisheries — the port’s bread and butter. However, future development in the New York Bight, where multiple projects are planned, has much greater overlap with the valuable fishery. 

“As with most things that are the first of their kind, there are lessons to be learned,” said Gordon Carr, executive director of the New Bedord Port Authority, in a statement. “We remain steadfast in our efforts to work with all stakeholders to mitigate the impact of offshore wind on commercial fishing in a way that allows fishermen to continue to fish on grounds that they have fished.”  

“The payment of financial compensation to fishermen must be a last step in addressing the impact of offshore wind on fishing, and only after real efforts at avoidance and minimization are undertaken,” he said.

Though the states are operating in absence of any federal law or program, some officials have proposed legislation that would establish a national compensation fund. 

Most recently, Sen. Sheldon Whitehouse (D-RI) released a discussion draft for a bill that would establish regional compensation funds for the Atlantic states, the Gulf states, and the Pacific states to be overseen by the U.S. Secretary of Commerce.

Earlier, Sen. Ed Markey and Rep. Seth Moulton in late 2022 proposed legislation to establish a trust fund in the Treasury Department with revenue collected from offshore wind lease sales. It would also establish advisory committees with NOAA Fisheries to develop regional criteria for eligible claims and a process.

A spokesperson with Markey’s office said by email that the office is still working on bill language with stakeholders.

Email Anastasia E. Lennon at alennon@newbedfordlight.org.

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