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NJ utility board details final stretch for offshore wind plan

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Gov. Phil Murphy's administration has set a goal of developing 3,500 megawatts of offshore wind capacity by 2030.
Gov. Phil Murphy's administration has set a goal of developing 3,500 megawatts of offshore wind capacity by 2030. - ()

The state’s Board of Public Utilities on Thursday held one of its first public hearings aimed at narrowing down how it might go forward with a comprehensive offshore wind plan, with the emphasis for now on getting information on the process out to the public.

Gov. Phil Murphy’s administration has set an ambitious goal of developing 3,500 megawatts of offshore wind capacity by 2030, part of an even broader goal of making New Jersey 100 percent dependent on renewable energy sources by 2050.

New Jersey, in the short term, wants to develop a block of 1,100 megawatts of offshore wind energy, and the BPU ultimately has to solicit bids on who will be involved. And a smaller, 24-megawatt pilot project called the “Fishermen’s Energy Offshore Wind Project” off the coast of Atlantic City is potentially in the works.

State officials held a similar meeting in May, where they also heard ideas from environmental and energy industry insiders.

Robert Gibbs, director of corporate and regulatory affairs at the Iselin-based Direct Energy, said at the Thursday morning meeting at Mercer County Community College that he was worried the electricity costs associated with wind energy could get passed on to businesses, which consume hundreds of times more electricity than households.

“We applaud those efforts, but with all of the other costs that we’re seeing around the country and the state, we really need to be mindful of the cost to consumers here and give them time to absorb them,” Gibbs said.

Worst-case scenario, businesses see the energy prices too high in New Jersey and opt to move to cheaper states, Gibbs said.

“We need to balance the environmental and energy impacts to the ratepayers,” added Christine Buteas, chief government affairs officer at the New Jersey Business and Industry Association. “Competition and transparency are key to keeping the ratepayer treated fairly.”

To be more competitive, the BPU might want to consider smaller blocks of wind farms, each generating 400 megawatts, according to Paul Leaf from Equinor, the Sweden-based, multinational energy company.

“From a cost-perspective, 400 megawatts would be seen as a wise minimum. We would like to see developers to make multiple bids so that New Jersey has opportunities to assess various costs,” Leaf said. “We also believe that it will stimulate competition.”

And by diversifying how many companies are involved with the 1,100 megawatts, which would keep the prices down, according to Markian Melnyk from Atlantic Wind Connect.

“With competition, if we get the rules for this solicitation right, we’ll have the most competition, and that will get the best deal for the ratepayers,” Melnyk said.

Atlantic Wind Connect, in particular, deals with transmissions, which is the transportation of energy from the wind turbines to the ratepayers.

“What I’ve heard the wind developers ask for… that’s where they build the transmission, they own it and by virtue of that ownership they can exclude others from that transmission,” Melnyk said. “That’s a limited commodity. So if you can exclude somebody else from it, one of your other wind developer competitors, then you can create a barrier for entry, and from that barrier you can charge higher prices.”

Edward Kelly from the Maritime Association of the Port of New York and New Jersey spoke to the spacing issue of the wind farms, that is, making sure they’re not in the middle of major shipping lanes.

“This is not an open, unused area,” Kelly said.

And there’s the matter of how to get the electricity to the higher-demand, pricier markets of North Jersey, versus the cheaper South Jersey demand.

“North Jersey, that’s where you want that wind to be developed,” Melnyk said.

Thursday’s meeting was a relatively small step, and environmental activists such as Jeff Tittel, who heads the New Jersey Sierra Club, questioned the efficiency of holding such a meeting.

“After 14 years of coming to meetings on offshore wind and seeing blue ribbon panels and big bill signings that’ve gone nowhere, all I can say is we have to act now.”

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Daniel J. Munoz

Daniel J. Munoz

Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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