On June 29, 2010, the New Jersey legislature passed S 2036, the “Offshore Wind Economic Development Act.” The bill would create a renewable energy certificate program to require that a certain percentage of electricity sold in the state come from offshore wind projects. Supporters estimate that the program could create at least 1,100 MW of offshore wind capacity.
The state Board of Public Utilities (“BPU”) would administer credits to wind energy producers for each megawatt of electricity generated by offshore wind farms. The producers can then sell the credits to offset production costs of offshore wind projects. The bill also would allow the state to provide up to $100 million in tax credits for qualified wind energy facilities in wind energy zones.
However, opponents of the bill argue that the unknown costs of these energy credits could raise customers’ electric bills. The legislation allows wind developers to apply to the BPU to establish a fixed price for the credits over twenty years, with adjustments for inflation. Once the price is established, the state cannot reconsider the issue. Opponents also point out that similar proposals in Virginia and Kentucky have failed due to the high projected costs.
S 2036 passed by a 28-10 vote in the state Senate, and a 71-6 vote in the state Assembly, with one abstaining vote. The bill has been presented to Governor Chris Christie to sign, and Christie has spoken favorably about the bill in the past. If the Governor signs the bill into law, then several proposed offshore wind projects could receive even more financial support from the state. For example, in 2008, the state awarded Garden State Offshore Energy a $4 million grant for a 350-MW offshore wind facility. Additionally, Fishermen’s Energy of New Jersey LLC is proposing a two-phase 370-MW project off the coast of Atlantic City.
A copy of the bill is available here.