The New Jersey Board of Public Utilities proposed a rule Wednesday to create an offshore wind funding mechanism, an important step in getting wind farms built off the state’s coast.
The Offshore Renewable Wind Energy Certificate rule describes how an offshore wind project would receive funds from the state’s electric ratepayers through electric distribution companies such as Atlantic City Electric. The wind farms would receive ORECs once they start generating electricity, which would allow them to pay back creditors that finance project construction.
The wind farms would sell electricity into the grid but return all sales revenues to ratepayers, according to the BPU.
Details of the rule will not be made public until after it is published in the New Jersey Register, BPU spokesman Peter Peretzman said.
New Jersey Sierra Club Director Jeff Tittel, who was at Wednesday’s BPU meeting where the proposal was made, said publication generally takes about 30 days and is followed by a 60-day comment period.
“It’s good to see they are finally moving forward with offshore wind,” said Tittel, so wind energy developers can qualify for federal tax credits that are due to end in December 2019.
But he said there are a lot of questions to be answered, such as how will the BPU decide which projects are most cost effective and which will benefit New Jersey residents the most.
Danish offshore wind giant Orsted has opened an Atlantic City office and is pursuing building a large-scale project about 10 miles off the coast of the resort. It recently deployed equipment to study wind and wave speed and direction at a potential site. A spokesman has said it could have a wind farm built by 2025 if the OREC program is in place quickly and if its project is chosen for funding.
Tittel said it appeared the board would allow wind development bids to come in for complete projects, including transmission.
Companies that specialize in laying underwater cable had asked the BPU at a public hearing last week to allow them to bid on the transmission portion of projects, to increase competition and limit the number of cables on the ocean floor.
Electric companies would charge their customers and make monthly payments to wind farm developers based on their customer base, the number of megawatts generated by the project and the OREC price, a BPU press release said.
Wind farm developers would use ORECs to pay their suppliers and would refund all revenues to ratepayers earned from selling electricity.
Gov. Phil Murphy has set a state goal of quickly reaching 1,100 megawatts of offshore wind capacity, with an ultimate goal of 3,500 megawatts.
“There has been more activity in the first six months of this administration when it comes to achieving our offshore wind goals than there was in the eight years since the signing of the Offshore Wind Economic Development Act,” Murphy said in the press release.