One Small Step for BPU, One Small Step for Offshore Wind in NJ

State agency moves ahead cautiously, planning to meet less than one-third of the Murphy administration's offshore wind target

Offshore Wind Farm
A state agency yesterday took a cautious step toward complying with the Murphy administration’s aggressive targets for developing offshore wind along the Jersey coast, a process stalled for nearly eight years.

In a unanimous vote, the state Board of Public Utilities initiated a number of actions aimed at reviving New Jersey’s dormant offshore-wind industry.

The agency issued its own order directing staff to begin moving the program forward, including trying to interest developers into building 1,100 megawatts of offshore wind capacity. The goal is identical to one established by the Christie administration and a target set by Gov. Phil Murphy in an executive order last month. It is less than one-third of the 3,500-megawatt goal the governor talked about in his clean energy agenda.

Paying for wind

The board also ordered staff to initiate a rulemaking process to determine how ratepayers will subsidize offshore wind farms, which is considered essential by wind developers in getting their projects built.

The rules were supposed to be adopted seven years ago, but never were because the Christie administration opposed the projects, fearing offshore wind would spike energy costs for residents and businesses.

The board’s action comes in the midst of a divisive debate over a comprehensive bill making its way through the Legislature to subsidize a range of clean-energy initiatives, as well as provide financial incentives to keep open nuclear plants operated by Public Service Enterprise Group.

Cleaner costs more

The legislation, now apparently stalled in the Senate, underscores the concerns raised by ambitious renewable-energy targets among lawmakers and businesses. They fear the cleaner, but more expensive electricity produced by the fuels will boost bills in a state already burdened by high energy costs.

There is only one offshore wind farm operating off Rhode Island in the United States. Two developers have secured leases to develop wind turbines off the Jersey coast, but those projects are not expected to be operational for at least five years.

While wind projects in the Midwest and Texas are cheaper than conventional ways of producing electricity, offshore wind is relatively new in the United States, and its costs are certain to be higher than power produced by natural gas and other traditional sources, at least in the short term.

BPU Commissioner Richard Mroz cautioned about those costs.

“As of this day, we have no foundation to know what offshore wind will cost,” said Mroz, who during a stint as agency president under Christie took no action to push the technology forward, nor the regulations to finance the offshore wind farms. “In the future, we will confront very tough decisions to make.”

Fellow BPU Commissioner Diane Solomon agreed. Referring to offshore wind, Solomon, a fellow Republican, said: “It must be economically competitive and benefit ratepayers. It’s prudent to move ahead cautiously.”

BPU President Joseph Fiordaliso argued a directive to develop a strategic plan for offshore wind in conjunction with other state departments would address those financial implications, as well as their implications for ratepayers.

“I believe we have a moral obligation to mitigate the effects of climate, change,” Fiordaliso said. “Will we be successful? I don’t know, but we won’t be if we don’t try.”

No timeframe

But Fiordaliso declined to project a timeframe for how long it would take to develop the regulations, nor the strategic plan for offshore wind.

Even proponents acknowledged it will not happen anytime soon.

“The path forward on offshore wind is not going to happen overnight,” said Doug O’Malley, director of Environment New Jersey. “Today’s BPU order is a clear break from the Christie era of inaction.”

“This is the beginning of the beginning,” added Jeff Tittel, director of the New Jersey Sierra Club. “This could take years.”

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