A week after Eastport banned data centers for 180 days, federal regulators accepted the underwater AI project’s application

A week after the Eastport City Council voted unanimously to bar data center approvals in the Maine city for 180 days, the Federal Energy Regulatory Commission accepted for filing the application behind the project the moratorium was written to stop.

FERC accepted DeepGreen Western Passage SPV LLC’s request for a 48-month preliminary permit on Wednesday, August 19, The Maine Monitor reported. The company wants to build a $100 million tidal-powered, water-cooled artificial intelligence data center in the Western Passage of the Bay of Fundy, near Kendall Head off the northern coast of Eastport, with an active footprint of about 27 acres. Eastport has about 1,300 year-round residents and sits on the Canadian border.

Celeste Miller, FERC’s acting director of media relations, told the Monitor that acceptance means “the application is now considered complete,” and that the commission is inviting public comments. The next steps she described are soliciting motions to intervene and accepting competing applications. The deadline for comments, motions and competing proposals is October 19.

A preliminary permit is not permission to build. In an update to residents on August 3, the city council and city manager quoted FERC’s own description: “A preliminary permit, issued for up to four years, does not authorize construction; rather, it maintains priority of application for license…while the permittee studies the site and prepares to apply for a license.” To reach construction, the city wrote, DeepGreen would have to apply for a license, “a much more involved, much more expensive process.” Wolfson himself told Monitor Local in July that the permit gives the company “a right to study, not a license to construct.”

What FERC sent back in July

DeepGreen filed in February. In a July 15 letter, FERC found four deficiencies that prevented the agency from accepting the application: it did not identify every tribe affected by the project, did not specify all the physical dimensions and configurations the statute requires, included maps extending beyond the required project boundaries, and gave no detailed technical explanation for a 400-acre “operational envelope” around a much smaller area of actual infrastructure. FERC asked specifically why construction and operation required a wake recovery area, a thermal dilution zone and maintenance access spanning 400 acres, and asked the company to state whether a cable in the design connects to Eastport’s microgrid or to another power source. Emily Carter, chief of FERC’s New England branch in the Division of Hydropower Licensing, gave the company 45 days to respond and warned that the application could be rejected if it did not supply the data.

The company’s revised filing shrank the project. The 400-acre operational envelope became an active infrastructure footprint of 27.1 acres. DeepGreen told FERC that the “total proposed project operational capacity has been scaled down to a maximum of 15 MW (megawatts) to align with revised commercial modeling,” against an earlier proposal of up to 51 megawatts. The revised plan lists 16 marine hydrokinetic turbines in Phase I rising to 34 in Phase II, where the original called for 170. Carter recommended the scalable phases, and the company supplied the tribal contacts and updated maps FERC had asked for. A pilot stage would draw on the bay’s 22-foot tides to generate up to 5 megawatts, Maine Public reported, in a sealed facility the company says would take no outside power.

DeepGreen Western Passage SPV was incorporated in Delaware in January, one month before it filed two preliminary permit applications with FERC. The second is for Upper Cook Inlet in Alaska, where the February filing proposed an initial operational envelope of 1,650 acres and roughly 330 to 350 turbines. Both entities are special purpose vehicles under DeepGreen Holdings LLC. Louis Wolfson, the managing member of the parent company, is a luxury real estate developer from Needham, Massachusetts, whose background is at Golden Development Corp.

The city’s position and the votes taken so far

The council had already recorded its opposition to the project in a unanimous vote before the moratorium. On August 12 it went further, adopting a measure moved by Councilor Karen Raye that temporarily prohibits any “application, permit, license or approval related to the establishment, construction, expansion or operation of a commercial or industrial data center or artificial intelligence computing facility.” The text covers facilities on land, underwater, partially or fully submerged, and any co-occurring infrastructure, and runs 180 days unless the council ends it sooner or two citizen-initiated ordinances are decided first.

Those ordinances came from the Eastport Coalition for Healthy Oceans by petition. The city’s attorneys at Rudman Winchell found one of them, which would require a referendum for commercial or industrial development above 25,000 square feet on land and 10,000 square feet in the shoreland zone, to be unlawful and unenforceable, on the reasoning that a municipality cannot mandate and regulate elections by ordinance rather than through its charter. The firm found the second, a permanent ban on large-scale data centers, legally sound, and suggested formatting changes before the question goes to voters. The council scheduled back-to-back hearings on the two ordinances for August 5 at Shead High School. That hearing drew nearly 200 people into the high school gymnasium, many wearing homemade yellow “no data” pins cut in the shape of a fish, Maine Public reported. A Planning Board hearing followed on August 24 at the Port Authority Meeting Center, with votes on both ordinances listed on the published agenda.

Chris Gardner, executive director of the Eastport Port Authority, said the authority “has zero authority over any of the water permitting for the site due to its nature of state and federal permitting.” He said the board has taken no formal motion against the project, but that “in all public conversations on the AI proposal, no board member has expressed any interest in an AI data center,” and that “it is the consensus of the board that there is no confidence in this developer based upon our limited interactions.”

The objections on the record

Nathan Curtis, an Eastport landowner, aquaculture employee and founder of Midcoast Solar, wrote to FERC in opposition: “Computing ‘hives’ of the scale proposed require continuous ocean cooling, converting Western Passage into an unmetered industrial heat sink. Continuous thermal discharge into the water column threatens local water temperatures, localized current dynamics, and critical benthic habitats that support Eastport’s commercial fisheries and working waterfront.”

Dwayne Tomah, a historian from the Sipayik Passamaquoddy community next to Eastport, told the August 5 crowd: “This has happened nationwide folks, it’s nothing new. It’s happening, it’s coming. We’ve got to resist.” Kevin Raye, a city resident and former Republican president of the Maine Senate, said the controversy felt unlike past fights over an oil refinery and a liquefied natural gas terminal, and that it was extraordinary that the proposal “has united people of all stripes.” City Manager Brian Schuth said of the plan: “I have said it’s the equivalent of an idea scrawled on a bar napkin. By very smart people but who may not know if it’s even possible to do what they’re doing.”

Wolfson told the Monitor: “as a property manager and developer who has operated within coastal dynamics for 40 years, I have too much respect for working waterfronts to introduce a project that threatens them.” He declined repeated interview requests from Maine Public and said in a statement that the project is engineered as a “climate and decarbonization initiative” meant to avoid the water use, electricity use, noise and air pollution of land-based data centers. “Right now, the project is in a quiet, analytical stage,” he said.

DeepGreen’s application refers to a docking platform “configured to interface with ORPC modular, high-efficiency horizontal axis hydrokinetic cross-flow turbines,” a reference to the Portland company Ocean Renewable Power Company. A company spokesperson said in a statement: “ORPC has no affiliation with the DeepGreen project and is not participating in its development, permitting, financing or deployment. DeepGreen has referenced ORPC’s prior work in the region and identified ORPC technology as a potential future integration, but there are no agreements or active projects between our organizations.” Stuart Davies, ORPC’s chief executive, said of the docking cradles, “I have no idea what those are,” and confirmed by email, “We have had no discussions with DeepGreen regarding any of this.”

Eric Masanet, a data center researcher at the University of California, Santa Barbara, told Maine Public that undersea computing is achievable and that Microsoft tested the concept several years ago, while saying its viability in Eastport specifically is unsettled.

The city says it has received no applications for building permits, earthmoving permits or anything else that starting construction would require.