Interior Gave Sweetheart Finance Deal to Wind Developer a Week Before its Lawyer Joined Department
- November 29, 2023
Former Dep Sec Tommy Beaudreau represented Vineyard Wind before becoming DOI #2
Protect the Public’s Trust (PPT) has learned from Freedom of Information Act documents that the Department of the Interior (DOI) waived substantial bonding fees for the Vineyard Wind offshore project just one week before the developer’s lawyer joined the agency as its Deputy Secretary.
Vineyard Wind LLC is the first offshore wind power development in U.S. waters. Like other energy producers granted a lease by the federal government, it was required to “provide financial assurance for decommissioning costs before the installation of facilities on their lease” – a safeguard against taxpayers being left with the liability of closing down or remediating a lease site.
Vineyard Wind “requested to defer providing the full amount of its decommissioning financial assurance until year 15 of actual operations under its 20-year Power Purchase Agreements,” according to the DOI’s Bureau of Ocean Energy Management (BOEM). The request was originally made and rejected in 2017. In March 2021, it was resubmitted “with additional information.” BOEM granted the request on June 15, 2021, exactly one week before attorney Tommy Beaudreau, who represented Vineyard Wind, LLC, was sworn in as Deputy Secretary of the Interior.
BOEM’s reasoning for granting the deferral was that financial assurance was “unnecessarily burdensome for lessees because, at that point, they have not begun receiving project income,” that the project used “proven wind turbine technology,” and because of “guaranteed electricity sales prices that, coupled with the consistent supply of wind energy, ensure a predictable income over the life of the Project.”
Perhaps unsurprisingly, BOEM took the opposite approach with recently proposed rules to ratchet up financial assurance obligations of independent offshore oil and gas producers. The proposed rules have been viewed as emblematic of the administration’s hostility to fossil fuels as well as part of an effort to reduce competition for wind producers. This newly revealed waiver for the wind energy client of then-incoming Deputy Secretary Beaudreau seems to validate these concerns. Ironically, despite BOEM’s rationale for the waiver indicating that Vineyard Wind’s “proven technology” and “guaranteed electric sales prices” would protect against future taxpayer liability, another prominent wind developer recently withdrew from two wind projects on DOI lease areas off the East Coast.
Although Mr. Beaudreau recently took another trip through the revolving door, leaving government to return to private practice, controversy swirls around his replacement, Laura Daniel-Davis. Ms. Daniel-Davis, a former National Wildlife Federation employee and acting Assistant Secretary for Land and Minerals Management, was promoted to take over Mr. Beaudreau’s role on an acting basis in spite of her failure to win confirmation on her previous nomination at least in part due to a leaked memo showing her decision to raise royalty rates despite the likelihood the increase would hurt energy development..
The timing and circumstances of Vineyard Wind’s unusual financial assurance waiver and Mr. Beaudreau’s employment at Interior raise important questions about whether any political interference occurred or ethical landmines were encountered in the process of giving the incoming Deputy Secretary’s client special treatment.
“Next time someone asks why the government has lost the trust of the American people, point them to this incident,” said PPT Director Michael Chamberlain. “Tommy Beaudreau is the poster child for the revolving door and his client’s project, whatever its actual merits, fit the administration’s practice of prioritizing their policy goals over ethics and the public’s trust. The fact that Vineyard Wind received what appears to be a backdoor subsidy from the agency its lawyer was about to help run certainly smells bad and definitely leaves Interior, once again, in a position in which they should have to answer serious questions.”