A regional fund that would pay fishermen for damages caused by offshore wind is one step closer to being established. A New York state energy agency, in collaboration with Massachusetts and nine other East Coast states, took a concrete step Thursday toward establishing that fund.
The New York State Energy Research and Development Authority issued a request for proposals seeking a firm to design and develop the regional fund and a standardized claims process for the fishing industry. The process would apply regardless of which wind project caused the economic loss.
In as few as 16 months, the states hope to have a claims process established, a third-party administrator selected, and millions of dollars from offshore wind developers that can be doled out to affected fishermen of any Eastern port as needed. The fund is a response to several projects that are slated to come online along the Northeast amid a lack of any national solution.
“This is a really important milestone for the 11-states initiative, in that it’s actually putting funding and resources towards the recruiting and hiring of a third party to run a regional fisheries compensation fund,” said Kris Ohleth, executive director of the Special Initiative on Offshore Wind, a nonprofit that has been working with the states and industries on this process.
Fishermen worry about gear loss and damage, loss of historic fishing grounds, negative impacts to fish habitats, increased insurance costs, and longer trips (and thus increased fuel expenses) as a result of wind development.
The RFP gave no estimate (or guarantee) of funding, but stated the fund could reach into the hundreds of millions of dollars through payments from wind developers.
“The idea is that when the developers go through their permitting process … there are permit conditions and mitigation requirements,” Ohleth said, including compensatory mitigation. “The developers would direct those monies to the regional fund as opposed to their own specific fund, as we have seen with Vineyard Wind and South Fork.”
In late 2022, nine Northeast states set out to develop this regional fund amid an absence of any federal framework, fund or authority. Due to a lack of a standardized system, compensation so far has been decided on a project-by-project and state-by-state basis.
“This has resulted in inconsistencies in estimating impacts to fisheries and the agreed-upon funds used to compensate for such impacts,” wrote the first nine states to BOEM in a 2021 letter, adding the current approach may create inequities for the fishing and wind industries.
“We’re already seeing the fishing community a little confused and overwhelmed by the South Fork and Vineyard Wind processes, and that’s only two wind farms,” Ohleth said. “Once there are many more, there’s going to be different eligibility requirements and timelines that are going to be pretty confusing.”
Ohleth said there is no requirement for Vineyard Wind and South Fork Wind to roll their existing agreements and funds into the regional fund and claims process once it’s running.
As of this year, 11 Atlantic coastal states are involved in the effort, from Maine to North Carolina. The selected entity will be paid with funds from the states, the wind nonprofit headed by Ohleth, and the American Clean Power Association, whose membership includes offshore wind developers.
A committee with representatives from the states, the fishing industry, and the wind industry will also be established to oversee and advise the selected firm. The committee’s advice will address the fund’s design and development, including how it should communicate with fishermen.
The committee membership will have three seats for the states, three for the wind developers, and six for the fishing industry (two per region). There may also be additional representatives from NOAA and the Bureau of Ocean Energy Management.
Ohleth said nominations for those positions will go out soon. The American Clean Power Association will organize nominations for the wind industry.
Ohleth said her nonprofit is in talks with the Responsible Offshore Development Alliance (a coalition of fishermen) to oversee nominations for the fishing industry.
Lane Johnston, programs manager with RODA, in an email Thursday said she had not yet read through the RFP, but will seek feedback from fishermen on it.
“Members of the commercial fishing industry must be in leadership roles when designing any compensation program,” Johnston said. “We look forward to reviewing the RFP with fishermen to evaluate whether they support the approach.”
Compensation, also termed “compensatory mitigation,” comes in when the conflicts cannot be avoided or minimized.
“The States, federal agencies, commercial fishing industry, and offshore wind developers have concluded that compensatory mitigation will likely be necessary to ensure coexistence between offshore wind energy and fishing industries,” the RFP states.
A regional fund would provide a “consistent, equitable, and transparent framework for compensation, subject to the establishment of a formal governance structure and compensation claims process,” the RFP says.
“This is an important step forward in advancing this concept and it emphasizes our continued efforts to stress the importance of sustaining a vibrant fishing industry while developing offshore wind in a manner that promotes coexistence and where both can thrive,” said Greg Lampman, director of offshore wind for the New York State Energy Research and Development Authority, in a statement.
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Ohleth said the streamlined process and single administrator could also help save money, leaving more to go towards fishermen’s claims.
BOEM lacks authority to create or manage a fund to compensate fishermen for offshore wind, and has stated such an ability would require congressional action. Decades ago, federal law established a government-managed fishermen’s compensation fund for oil and gas leases regarding gear loss and damage.
BOEM officials in a fishery management council meeting Wednesday said they expect to issue final guidance for fisheries mitigation this year, though could not specify a date beyond that. The agency issued draft guidelines in 2022.
Most recently, Sen. Sheldon Whitehouse (D-RI) released a discussion draft for a bill that would establish a compensation fund for fishermen at the federal level. Sen. Ed Markey (D-MA) tried something similar last year.
Ohleth has been in talks with Whitehouse’s staff and other Congressional offices, stating that the participating states believe a federal fund would be ideal. It’s a possibility that state agencies account for.
“In the event Congressional or federal action is taken in the future to fund a similar effort to mitigate impacts to commercial and recreational fisheries from offshore wind development, the States agree to consider amending, transitioning, or sunsetting this regional fund initiative,” read a December letter from the 11 states to the American Clean Power Association.
“In terms of getting stakeholder relief, the states’ program is the most shovel-ready project, so getting that stood up is great,” Ohleth said. “If it can be rolled into a federal program, I think the Atlantic states would be very happy.”
Proposals to design this regional fisheries compensation fund are due March 20.
Email Anastasia E. Lennon at alennon@newbedfordlight.org.
“Fishermen hurt by wind projects”? I thought they were hurt by avoiding to pay taxes on their wealth! Recently convicted fisherman Joaquin Sosa, $1.9 million income, no income tax paid! Fusherman Rodolfo Membreno, avoided paying $300,000 taxes on income! ‘Codfather’ Carlos Raphael, gained $100 million on forced sale of his fishing fleet but still kept his Scallop fleet, convicted of many federal crimes involving income! I say, let the ‘fishing industry’ take care of themselves! The Fishermen’s plight has zero to do with the Wind Industry!
Carlos lost his fishing fleet and was locked up and those caught avoiding taxes are also facing prison time. The fishermen built great parts of our nation and we shouldn’t be looked down upon. We risk a lot (sometimes our lives) to help provide a nature heart healthy food source.
This will not be enough to compensate every fishermen never mind new fishermen just getting into the industry. This fund will most likely only help boat owners. Meanwhile the captains and deck hands have to fend for themselves. It’s just a way of getting boat owners on the side of the government while ignoring how much it takes away from the little guy that’s putting in the actual work. Offshore wind will be a devastating blow to the fishing industry no matter what incentives you throw at it.