New Jersey legislators barely approved a bill Friday that handed millions of dollars in tax breaks to a foreign-based offshore wind power company — a move Republicans, commercial fishermen and activists have all opposed for its generous subsidies and potentially harmful environmental consequences.
The legislation allows Orsted, a Danish wind turbine producer, to use federal tax credits for its Ocean Wind 1 building project near Atlantic City, which is expected to power more than 500,000 households, according to reports.
Orsted must place a $200 million guarantee into state coffers, which will accrue $2.40 annually for every New Jersey ratepayer.
That could put Orsted’s cumulative tax credits as high as $1 billion, according to state Sen. Ed Durr (R-Gloucester).
“When Orsted received approval to build Ocean Wind 1, they agreed to apply for and return to ratepayers any federal tax incentives that might become available to offset the higher costs that ratepayers are paying today for the development of wind energy,” he added. “Despite the deal they signed, Orsted is realizing that wind farm projects don’t make economic sense without major government subsidies, so now they’re looking for a huge handout at the expense of New Jersey utility customers. We shouldn’t give it to them.”
The bill is a consequence of President Biden’s Inflation Reduction Act, which gave tax incentives to developers who are prepared to build thousands of wind turbines off the Garden State’s coast over the next few years.
Democratic Gov. Phil Murphy is expected to sign the bill into law, with a spokesman touting the creation of “the state’s first offshore wind project and critical supply chain facilities — as well as their associated clean energy and economic benefits.”
Other New Jersey Republicans, however, referred to it as a “bailout” for a foreign company.
“The hardworking people of New Jersey deserve better than Trenton’s plan to bail out foreign offshore wind corporation Orsted and give away billions of federal tax credits intended for ratepayers,” Rep. Chris Smith (R-NJ) said in a statement. “It is abundantly clear that New Jersey’s massive industrialized offshore wind projects will not only have tremendous environmental, navigational, economic and national security implications, but also require an endless stream of US taxpayer subsidies to try to keep these foreign-run projects afloat.
“Adding insult to injury, this New Jersey state legislation will force residents — who are already being crushed by an unfair tax burden and an exorbitant cost of living due to high inflation — to pay more for their electric bills.”
The state’s nonpartisan Office of Legislative Services estimated that power rates “may be higher than otherwise,” but noted that it could only give a broad estimate after Murphy’s office failed to “respond to our request for a fiscal note.”
The bill was nearly rejected in the state Senate due to absentee legislators and a lone Democratic holdout who eventually caved. The measure eventually passed 21-14, with the Assembly approving it 44-31 along party lines.
State Sen. Shirley Turner (D-Mercer) had initially opposed the bill over its potential rate hikes and giveaways, but said her colleagues convinced her the New Jersey government “didn’t have anybody to bid” on the energy incentives.
State Senate Republicans had warned in May that the construction of offshore wind farms could also be contributing to a reported uptick in whale deaths, which Democrats in the state legislature have attributed to climate change.
Cindy Zipf, the executive director of Clean Ocean Action, told lawmakers in a hearing that month that the wind power push had “gone too far, too fast.”
“We’re only beginning with the pre-construction now, and already, we’ve started seeing whales dying and washing up on our beaches,” Zipf said.
Between December and May, 32 whales have washed up dead along the East Coast, according to the National Oceanic and Atmospheric Administration.
The agency has admitted offshore wind construction may “adversely affect” whale populations but has not attributed any deaths to developers’ activities.
It refers to the whale deaths as “unexplained mortality events” and notes vessel strikes may result in deaths, as increasing numbers of ships traffic the aquatic habitats.
Another witness who worked for a seafood company said in May the wind turbines were also destroying the commercial fishing industry.
“Offshore wind is the single greatest existential threat to commercial fishing in the United States right now,” said Meghan Lapp, a representative for Seafreeze.
Jerry Leeman, a commercial fishing captain and executive director of the New England Fishermen Stewardship Association, told The Post in May that cables running offshore to power the turbines were “a dire threat” to several fish species vital to the business.
Republicans had called for a 60-day pause on the wind projects to study the whale death phenomenon, but say they were ignored.