Ørsted Seeks More Taxpayer Monies To Finish Ocean Wind Project - The Fisherman

Ørsted Seeks More Taxpayer Monies To Finish Ocean Wind Project

According to Ry Rivard at Politico, the Danish owned wind developer permitted to build New Jersey’s very first industrial offshore windfarm would like to get more money from state taxpayers before continuing their work on industrializing New Jersey’s inshore waters.

On March 7, Rivard reported from a Board of Public Utilities (BPU) meeting held earlier in the week where the five-member board began accepting proposals for more wind farms off the New Jersey coast, while also learning of re-negotiation between the governor and the wind developer of previously agreed-upon terms.

“For months, the Murphy administration has been locked in negotiations with Danish energy giant Ørsted about how to keep the state’s first offshore wind farm afloat financially,” Rivard noted, explaining how details of those negotiations spilled into public at that BPU hearing.

“Ørsted is looking to redo part of the 2019 deal it struck with BPU, citing inflation, interest rates and supply chain issues,” Rivard wrote at Politico, adding that Ørsted has not said publicly what they are asking for from the state.  “But, according to two BPU commissioners, the company is looking to keep federal tax incentives from the Inflation Reduction Act, tax credits that would cover up to 40% of construction costs,” Rivard wrote.

According to the Politico piece, in 2019 BPU approved Ørsted’s plans to put 100 turbines 15 miles off the South Jersey coast. The project known as Ocean Wind 1 was approved by BPU and is dependent on backing from New Jersey ratepayers at an increase of about $1.50 per month added to the typical residential power bill.  Ørsted’s Ocean Wind 1 project is the first of many industrial windfarms proposed along the Jersey Shore and is supposed to be finished in 2025.  However, construction has yet to begin and Rivard said Ørsted worries it can’t make money from the deal.

BPU Commissioner Dianne Solomon said the board had previously been assured that “any federal funds” would go back to ratepayers to offset the cost to them of the wind farms, but now it appears the company is seeking a change in those terms from state officials, possibly including the Legislature.  “We now learn legislators are poised to give the funds back to the developer,” she said during the BPU board meeting.

Ørsted spokesperson Tory Mazzola told Politico that the company is in discussions with state policymakers “to consider options that could most effectively advance and deliver” on clean energy goals, but “challenges such as high inflation, rising interest rates and supply chain constraints are impacting long-term capital projects, including Ocean Wind 1.”

“If changing the deal means burdening ratepayers by giving Orsted more money at their expense, state officials could face significant blowback — even relatively small changes could cost ratepayers hundreds of millions of dollars,” Rivard noted in the Politico piece, adding that Ocean Wind 1 and two other offshore wind projects, including Ørsted’s Ocean Wind 2, are slated to go online by 2035, the deadline for Governor Phil Murphy’s 100% clean energy plan; that quickly approaching date may be why the governor is also looking to overhaul the BPU.

Politico also reported how Governor Murphy is looking to overhaul the BPU by replacing three of its five commissioners as his administration enters its final years and his environmental legacy remains up in the air. “On Monday, Murphy nominated two new commissioners to replace former state Sen. Bob Gordon, who has been on the board since 2018, and Dianne Solomon, who former Gov. Chris Christie nominated to the board a decade ago,” Rivard wrote in his March 7th Politico article.  The article explained that Governor Murphy has spent more than a year trying to replace Solomon as the only BPU member Murphy didn’t nominate or reappoint.

According to Politico, the governor’s latest push to replace Solomon at BPU went public after Solomon has raised questions during a BPU meeting about the Murphy administration’s energy policy on several fronts, including rising costs of offshore wind energy and the governor’s recent push for the BPU to examine the future of the state’s natural gas utilities in a post-gas world.

“If Murphy has his way, Solomon’s spot would go to Marian Abdou, an attorney for the energy company NRG,” Rivard wrote at Politico, adding “She is little known in Trenton and people were scrambling to find out more about her.”  Abdou is listed on LinkedIn as Managing Senior Counsel at NRG Energy.

On March 20, 2023, Gov. Murphy apparently did get his way, as the state senate’s judiciary committee advanced Abdou in a split vote to replace Solomon at the BPU.