More on Tax Credits for Offshore Wind | Lesser

In my previous column, I discussed legislation proposed by Assemblymen Greenwald and Moriarty that will give the 30% investment tax credit (ITC) for offshore wind that was supposed to benefit New Jerseyans would instead be given to Ørsted and the Danish government, which owns the company, would force a typical residential electric customer to hand over $200.

What may not have been clear is this was an estimate just for the 1,100 megawatt (MW) Ocean Wind I project.  In total, the Govern Murphy has decreed that 11,000 MW of offshore wind shall be built off the New Jersey coast, ten times the amount of Ocean Wind I.  The only companies proposing to build offshore wind off the New Jersey coast are foreign ones.

So, using the same estimates, under the legislation, a typical residential customer will be forced to hand over $2,000 to foreign companies and their governments.  And don’t forget, the state spent almost $500 million to create the New Jersey Wind Port, which may never be used by any offshore wind company because of its disadvantageous location at the southern end of the state.  (Most of the offshore wind development is supposed to occur in the New Jersey – New York region to the north.)

Of course, that amount doesn’t include the additional money residential customers will have to pay because the prices for the Ocean Wind contracts are far higher than current wholesale market prices, which are running around $40 per MWh.

For Ocean Wind I, I estimate that a typical residential customer will pay an additional $26 per year.  Of course, if Ørsted succeeds in renegotiating its existing contract, which will force New Jerseyans to pay $98 per megawatt-hour the first year Ocean Wind I generates electricity – rising to $148 per MWh in the contract’s final year – a typical residential customer will pay even more for the privilege of seeing dead whales and dolphins washing up on New Jersey beaches.  Plus, customers will pay for all of the backup electricity needed for the majority of hours in the year when the wind doesn’t blow.

But as those late-night TV commercials used to say, “Wait, there’s more!”  The state is currently spending $800 million each year to subsidize solar photovoltaics.   For a typical residential customer, that amounts to an additional $91 per year on their bills.  New Jerseyans are also paying $300 million a year to subsidize the state’s two remaining nuclear plants, costing the typical residential customer $33 per year.   Add it all up, and residential customers will pay an average of $151 extra every year once Ocean Wind I is operating.

Governor Murphy and his green energy lobbyist friends will tell New Jerseyans it’s only fair to subsidize downtrodden foreign companies like Ørsted and enrich wealthy greens like themselves.  After all, it’s to save the planet.

And if you believe that, I have a certain bridge I am offering for sale.

Jonathan Lesser
About Jonathan Lesser 9 Articles
Jonathan A. Lesser, PhD is an adjunct fellow at the Manhattan Institute and president of Continental Economics; he boasts 30+ years of experience working for regulated utilities and 20+ years in the energy industry as a consultant, and Dr. Lesser has testified in front of numerous regulatory and legislative bodies including the U.S. Congress.