EASTPORT — The Planning Board unanimously recommended Monday that the city adopt an ordinance establishing a permanent ban on data centers, following a public hearing on two proposals aimed at stopping an artificial intelligence data center planned for the Bay of Fundy’s Western Passage.
The board also recommended that the City Council dismiss an ordinance requiring voter approval for new large‑scale development.
About three dozen Eastport residents, Passamaquoddy Tribal members and others gathered at the Port Authority with questions and comments on the ordinances.
The hearing followed the City Council’s approval of a 180-day temporary ban on data centers, introduced by Councilor Karen Raye to give officials time to review the ordinances’ legal and operational implications.
DeepGreen Holdings LLC, a Delaware company managed by Massachusetts real estate developer Louis Wolfson, applied in February to the Federal Energy Regulatory Commission for a 48‑month preliminary permit, just weeks after incorporating. FERC accepted the application for filing last week, though it remains under agency review.
Chairman Michael Morse said the Planning Board must review any ordinance that affects zoning and make recommendations to the City Council. The two citizen‑initiated ordinances, launched as petitions with enough signatures to trigger amendments to the Shoreland Zoning Ordinances, required that review.
Morse opened the session with 45 minutes designated for public comment on both ordinances. He asked speakers to keep remarks relevant, limit them to “three to five minutes” and address the Planning Board directly.
During a special session held immediately after the hearing, the board unanimously recommended that the City Council adopt the first ordinance — a permanent data center ban — with changes, including expanding its coverage to all districts of Eastport, an amendment intended to preserve the petitioners’ intent.
The Planning Board recommended that the City Council dismiss the second ordinance, which would mandate voter approval for commercial and industrial development of more than 25,000 square feet on land and more than 10,000 square feet in the ocean, based on the city legal counsel’s analysis of the proposal.
Morse cited an opinion from Rudman Winchell, the city’s legal counsel, calling the ordinance “unlawful and unenforceable” because it conflicts with the city’s charter.
If the City Council adopts the permanent ban, councilors will have time under the 180‑day temporary moratorium to amend the ordinance’s language and send it back to the Planning Board.
DeepGreen’s subsea project slated for Eastport’s waters — described in its FERC application as “an infrastructure layer expansion” to third‑party turbines — would be fully submerged, with cables coming ashore at Kendall Head or Johnson Cove, according to the filing.
DeepGreen Western Passage SPV is one of two artificial intelligence subsea infrastructure projects proposed by Wolfson. The other, DeepGreen Cook Inlet SPV, is planned for Alaska’s Cook Inlet.
An SPV, or special purpose vehicle, is a type of incorporation often used when seeking venture capital or when developers with intangible assets, such as a FERC preliminary permit, plan to sell their projects.
FERC accepted DeepGreen Western Passage SPV’s application for filing this month. The Alaska project’s application was last updated in July, when Eastport City Manager Brian Schuth sent a letter outlining what he believed were deficiencies in the Eastport project’s FERC application that also appeared in the Cook Inlet filing.
Because Schuth referenced both projects, FERC attached the letter to both files, even though he was addressing Eastport‑specific issues. Neither FERC nor the developer has updated DeepGreen Cook Inlet SPV since June, when DeepGreen responded to its deficiency letter on the Alaska‑based project.
Wolfson responded almost immediately to FERC’s preliminary permit acceptance of the Western Passage project in Eastport, posting this week a copy of a notification letter he sent to required state and federal agencies.
The agencies include the Federal Communications Commission’s Policy Division International Bureau; the Public Safety and Homeland Security Cybersecurity and Communications Reliability Division; Naval Facilities Engineering Command’s Naval Seafloor Cable Protection Office; the U.S. Coast Guard; the U.S. Department of the Interior; the Maine Bureau of Land and Water Quality; and the National Oceanic and Atmospheric Administration.
FERC’s acceptance of the preliminary permit does not authorize the project to move forward. It simply confirms that the agency has received all required information for a preliminary permit. Nothing has been approved.
Some residents are critical of Wolfson, calling him a “one-percenter” and questioning his decision to develop waters outside his home state of Massachusetts. Opponents formed a coalition called Eastport Coalition for Healthy Oceans, or ECHO, and are the petitioners behind the ordinances now under consideration.
In a statement, Joshua Nicholson of ECHO said: “The petitioners’ committee doesn’t own this fight. All we did was get the ball rolling, because legally someone has to put pen to paper to start the process, and because our City Council refused to get involved until after we demonstrated that the people of Eastport wanted more action than ‘let’s wait and see.’”
Wolfson told Monitor Local in July he wants people to know the preliminary permit provides “a license to study, not a license to construct.”
At Monday’s meeting, Morse said, “In all my conversations, I’ve yet to hear a single comment from anyone I’ve spoken to who is in favor of a data center here in Eastport.”
FERC is now soliciting public comments, motions for intervention and competing applications for the proposed DeepGreen Western Passage project.
After FERC accepted the application for preliminary permit last week, the agency called for public input.
Two motions to intervene and multiple comments opposing the project have already been filed.
One motion to intervene, filed by Nathan Curtis, a renewable energy developer and founder of Midcoast Solar, says that because Midcoast Solar is already connected to Eastport’s existing energy grid and operating within Versant’s territory, the proposed project could create direct economic and operational impacts that challenge the company’s standing in the community.
Curtis’ motion also said, “The introduction of Applicant’s proposed multi‑megawatt subsea compute load and tidal generation interconnections poses severe risks to local grid stability, hosting capacity, voltage regulation, and reverse power flow dynamics,” with regard to Eastport’s existing power generation structure.
The document added, “Any shore-side substation modifications, capacity reallocation, or utility‑mandated mitigation measures resulting from Applicant’s project directly threaten the uptime, net energy billing economics, and interconnection terms of Midcoast Solar’s existing generating assets.”
Curtis also raised concerns about the ecosystem.
A second motion to intervene, filed by Eastport resident Carrie Cobb, cites her interest in the project as someone who uses Eastport’s shoreland areas and as a Versant residential ratepayer concerned about the stability of the city’s power grid.
Cobb’s motion to intervene states that she “has professional experience concerning electric ratemaking, transmission development, grid infrastructure, and electric-system reliability. This experience will allow Movant (Cobb) to provide informed participation regarding potential grid impacts, infrastructure requirements, cost allocation, and local reliability concerns.”
It continues, noting that her “interests as an individual Eastport resident, shoreline user, and local ratepayer are distinct from the interests of the Applicant (DeepGreen) and may not be adequately represented by other parties to this proceeding.”
While these complaints focus on the strain a project like this could put on Eastport’s existing power infrastructure, an application update from July states there is “no proposed public grid interconnection.”
The confusion stems from original plans to piggyback on a theoretical microgrid project that is no longer active, and from the inclusion of cables that would come ashore near Kendall Head or at a backup location on Johnson Cove.
DeepGreen Western Passage’s filing says the project will run entirely “behind the meter,” pulling energy from installed third-party tidal turbines to avoid grid bottlenecks. This also gets around a queue of projects vying for grid interconnection approvals, with wait times sometimes exceeding five years, according to Lawrence Berkeley National Laboratory in 2023.
A study published in ScienceDirect, examining the cost‑benefit ratio of tidal turbine energy generation combined with pumped storage, found that tidal turbine energy generation must have a grid tether or other supplemental power source to maintain continuous power. DeepGreen’s project says it doesn’t connect to the grid, and there is no mention of an external battery or other power generation source to supplement the inconsistency of tidal energy fully dependent on currents.
The article suggests internal energy storage mechanisms can offset energy bottlenecks, but they have not been validated as a sole source of consistent power for more than a few days during peak spring tides at a United Kingdom location with tides that are out of phase.
Now that the Planning Board has made its recommendations, councilors will consider them at a special meeting Sept. 9 to decide the future of each ordinance.
Raye, who was the City Council liaison to the Planning Board at Monday’s meeting, said the council intends to file a motion to intervene on behalf of the city of Eastport.
Wolfson and his representatives were not at Monday’s meeting.
