The state’s Board of Public Utilities,on Friday, released the long-awaited financing rules on how offshore wind developers will be able to fund their projects.
The rules call for the collection and distribution of ratepayer-funded subsidies called Offshore Renewable Energy Credits.
Ratepayers would purchase electricity from electric distribution companies, generally as a portion of their electric bill. These EDCs would in turn purchase a bulk amount of wind energy from suppliers in exchange for OREC wind energy credits.
EDCs, by law, will have to draw a certain percentage of their electricity from offshore wind, into their so-called Renewable Portfolio Standard obligation.
The bulk purchase of wind electricity would provide financial assurance to attract investment, ensuring investors and financial institutions of potentially costly wind projects would get their money’s worth.
Utility companies would ultimately pay back the ORECs to the wind suppliers and refund any overpayments to the ratepayers.
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. The BPU ultimately has to solicit bids on who will be involved.
A smaller, 24-megawatt pilot project off the coast of Atlantic City called the “Fishermen’s Energy Offshore Wind Project” is also potentially in the works.
Jeff Tittel, who heads environmental advocacy group New Jersey Sierra Club, said that while the rules are a major step forward, and the biggest in nearly a decade towards offshore wind energy development, he’d like to see something substantive on how the BPU selects the project’s participants.
“The Murphy Administration managed to get done in eight months what the Christie Administration wouldn’t do for eight years. New Jersey has enough potential of offshore wind to meet one-third of our electrical needs,” Tittel said.
But, he added: “There’s no standard to judge what projects should be picked, versus another project. And there’s no standards. It leaves a lot of discretion right now to the BPU, versus having clear standards.”
The BPU’s deadline to submit public comment on the rules is Oct. 19.