Cape May County continuing federal offshore wind suit despite Ørsted backout

Offshore wind developer Orsted has decided to back out of two offshore wind projects along the coast of New Jersey, sparking controversy.

Cape May County will continue challenging permitting for offshore wind development in New Jersey despite one company abandoning its plans to build wind turbines along the coast.

Michael Donohue, who represents the county in offshore wind matters, said the decision to not rescind its lawsuit was made because Ørsted has said in statements another company could take on the leases for the projects.

“It is clear that Ørsted has abandoned the development of Ocean Wind 1 and Ocean Wind 2, but it is also clear that they believe that they can sell their lease and their state and federal permits,” said Donohue. “For Ørsted to break every promise it made to multiple New Jersey communities, to break all the promises it made to trade unions in South Jersey, to break all of its contractual obligations with New Jersey agencies and then believe that it is entitled to profit from its lease and permits is the height of arrogance. The County of Cape May intends to challenge this proposition in federal and state court moving forward in connection with the litigation already underway.”

Ørsted on Friday declined to comment.

The county and a coalition of local plaintiffs sued the federal government in October, alleging regulators failed to consider impacts to the area’s $7.4 billion tourism industry when it greenlighted offshore wind projects by Ørsted.

The Danish-based company last month said it was terminating Ocean Wind 1 and 2, a pair of offshore wind projects off Atlantic and Cape May counties.

The company controls Ocean Wind LLC, a subsidiary responsible for overseeing both of Ørsted’s canceled Jersey Shore projects.

“Ocean Wind could potentially sell the project, including the federal permits and approvals being challenged here, or a developer could potentially seek to amend the project, including in ways that are consistent with the project design envelope already evaluated in the project’s environmental impact statement,” Matthew Kaplan, project development director for Ocean Wind, said in a federal court filing Nov. 13.

A group of plaintiffs that includes the Cape May County Board of Commissioners and the county Chamber of Commerce is suing the federal government over claims it failed to factor in impacts to the county's $7.4 billion tourism industry when it granted approvals for offshore wind development.

Republicans who make up Cape May County’s government have been critical of offshore wind, a green-energy initiative of Democratic Gov. Phil Murphy.

The Governor’s Office did not immediately return a request for comment.

Through Ocean Wind 1, Ørsted was to build up to 98 wind turbines off the Jersey Shore, sending energy generated from them to landing points in Upper and Lacey townships. Ocean Wind 2 was planned off the coast of lower Cape May County.

The company cited varying economic pressures, including inflation, as reasons for nixing those projects.

Meanwhile, Atlantic Shores, another energy company, said after Ørsted’s October announcement it would continue building its project off the coast.

The state Board of Public Utilities is also set by the end of the year to choose a company to fulfill another round of offshore wind development off Monmouth County.

Murphy said previously Ørsted was required to put up an additional $200 million to benefit the state’s offshore wind industry and he would make sure the company abides by that obligation.

Cape May County’s litigation isn’t its only lawsuit regarding offshore wind.

A state judge will rule next month on whether to grant New Jersey's motion to dismiss a lawsuit challenging a $1 billion tax break for offshore wind development.

Ørsted earlier this year sued the county after it said the county failed to log easements pertaining to its Upper Township landing site, which has a pathway through Ocean City. It also sued over open road permits not granted for the project to proceed.

Both parties settled on a portion regarding the road permits, state court records show. However, the county is appealing a judge’s order for the easements to be filed with the county Clerk’s Office, Donohue said.

The county also may file a suit against the state Department of Environmental Protection regarding the permitting process, Donohue said.

“The county is still exploring potential litigation to challenge Orsted’s DEP permits, but no final decision has been made,” Donohue said.

Ørsted put up a $100 million guarantee that it would build New Jersey’s first offshore wind farm, losing that money if Ocean Wind 1 were not operating by December 2025.

The money put up Oct. 4 by Ørsted and placed in an escrow account was required under the terms of a law Murphy signed in July allowing Ørsted to keep federal tax credits it otherwise would have had to return to New Jersey ratepayers.