Follow Us:

Energy & Environment

  • Article
  • Comments

Conservative Group Wants to Shut Down NJ's Offshore Wind Program

Tom Johnson | July 21, 2011

Americans for Prosperity says state subsidies for offshore wind will drive up power prices and squelch economic development.

A conservative group that spearheaded efforts to lobby the Christie administration to pull out of a regional initiative to curb greenhouse gas emissions is now trying to undercut New Jersey’s efforts to develop offshore wind farms.

Americans for Prosperity retained the Beacon Hill Institute to do a cost-benefit analysis of the state's plans to develop up to 1,100 megawatts of wind capacity off the coast of southern New Jersey. The study concluded that "the rush to offshore wind power will produce net economic costs, raise electricity prices, and dampen economic activity."

Whether the group will be as successful in campaigning against offshore wind as it was with the greenhouse gas initiative is uncertain. Some clean energy advocates believe the strong bipartisan support shown for offshore wind should keep New Jersey on target to be a leader in the technology.

Although some business interests have questioned the higher cost of offshore wind, few have sought to block the effort. That's understandable, given that the bill promoting the initiative was sponsored by two high-profile legislators: Senate President Stephen Sweeney (D-Gloucester) and Senate Minority Leader Thomas Kean (R-Union), as well as heartily endorsed by top administration officials.

But Mike Proto, communications director for the New Jersey chapter of Americans for Prosperity, said his organization's goal "is to educate taxpayers and ratepayers about what kind of boondoggle" offshore wind could be. Proto said the organization decided to do an economic cost-benefit analysis after the state legislature approved and Gov. Chris Christie quickly signed the Offshore Wind Development Act, a law that includes a $100 million tax credit to "qualified wind energy facilities."

The group’s state director is Steve Lonegan, a former Bogota mayor and two-time gubernatorial candidate for the Republican nomination, and a favorite of the party’s right wing.

"The reality is the march to these renewables is not cost-efficient," Proto said. "If it was, it wouldn’t need these subsidies."

The report echoes that argument. "Electricity generation by offshore wind is much more costly and unreliable than conventional energy sources such as coal and natural gas and stands little chance of commercial success in a competitive market," it concluded.

But clean energy advocates dismissed the study, saying the organization is one that doesn’t look at "the big picture." Matt Elliott, clean energy advocate for Environment New Jersey, said the organization gets most of its money from out-of-state fossil fuel interests.

"You won’t see them attacking subsidies for fossil fuel because that's who writes their paychecks," said Elliott, noting the group has not criticized a bill that would subsidize with ratepayer payments the development of three natural gas plants in New Jersey.

The state is trying to encourage offshore wind farms by setting up a mechanism by which the projects receive offshore renewable energy certificates for the electricity the systems generate. These so-called ORECs will ultimately be paid by electric utility customers. At a meeting earlier this week, one utility executive said the cost to ratepayers could run up to $600 million a year.

Elliott argued that any subsidies given to renewable energy sources such as wind and solar pale in comparison to the incentives that have been handed out for decades to the nuclear and fossil fuel sectors.

Proto dismissed that argument. "It's all wrapped in feel-good politics about wind mills and solar panels," he said. "The left has been effective in promoting these technologies."

In the institute’s study, it projected the net cost of developing 1,100 megawatts of offshore wind could range between $2.1 billion and $4.1 billion. From 2017 to 2036, it projected the average household will pay $431 more if wind farms are developed; commercial businesses, an additional $3,054; and industrial customers, $109,335.

The state has yet to accept any applications from offshore wind developers, so it is not clear what the costs of developing wind farms will be to New Jersey ratepayers. Under the law signed by Gov. Chris Christie, however, the state Board of Public Utilities (BPU) cannot approve any project unless there is a net positive economic impact to the state.

While Elliott thinks the strong bipartisan support for offshore wind will protect efforts to develop the technology, other environmental advocates were not so certain.

"You can't take this stuff lightly, given what has happened in New Jersey over the last six months," said Jeff Tittel, executive director of the Sierra Club of New Jersey, pointing to actions taken by the Christie administration.

"They are going to eliminate rebates for homeowners for solar," said Tittel. "They plan to cut back energy efficiency goals, and they want to scale back the Solar Advancement Act," a law that ramped up the state's targets for increasing its reliance on solar. "Why wouldn’t wind be next?"

Sponsors