After eight years of little to no action, the Murphy administration has made clear it will embrace offshore wind for New Jersey. The state squandered a tremendous opportunity to act earlier in the decade, meaning we must move and move fast. Moving fast, however, should not keep us from ensuring we harness offshore wind in a smart, cost-efficient manner with a focus on building a competitive industry that will thrive in the long term.
Last week, the New Jersey Board of Public Utilities held a public hearing in Mercer County to gain feedback and ideas on issues related to the first 1,100-megawatt solicitation. Included in that was the question of how to best get the wind energy from offshore turbines back to the New Jersey mainland. Unfortunately, current state law prevents this from happening in the way that makes the most sense. Instead, it leaves open the real possibility that offshore-wind policy will simply create a monopoly that could have bruising impacts on ratepayers.
Anbaric is a transmission development company with a history of delivering projects on budget and on time. In fact, Anbaric is the only company in the last decade to have successfully developed two 660-megawatt electricity transmission lines right here in New Jersey.
Existing state law currently defines who is allowed to bid on and create these transmission lines. Eligible bidders for offshore-wind projects are limited only to companies who generate the wind, not the transmission companies that bring the wind power to shore and connect it to the grid for consumer use.
Companies that specialize in transmission lines, like Anbaric, are ineligible to even submit a bid to build a transmission line for offshore wind. This means we cannot submit a bid in the market where we have a proven track record of success. This limited competition could inadvertently allow for the development of an industry monopoly.
Transmission developers are prohibited
This prohibition of an entire category of companies simply from bidding limits the responses for the state to review and ultimately pick the lowest cost and best solution for consumers. This approach does not make sense for a few reasons.
First, it undercuts the Murphy administration’s goal of deploying offshore wind quickly. Experienced companies who are familiar with PJM, New Jersey, permitting, and burying transmission lines underwater and underground will be able to meet the Murphy team’s timeline for offshore wind faster than companies coming to this state for the first time.
Second, it diminishes the administration’s goal of bringing offshore wind to market while protecting the environment. When transmission experts build transmission, the lines can be shared across two or more offshore-wind farms. When generators build such lines, they build lines for their project only, requiring adjacent projects to build second, third and fourth lines, which results in two or more lines where one would be sufficient. Multiple lines needlessly provide more disruptions to the coastline and to the ocean floor.
Finally, the exclusion of transmission competition increases costs in the short and long term. In the short term, by prohibiting transmission companies from building transmission lines to be shared across two or more offshore-wind projects — such as the two wind-energy areas off Atlantic City — needless lines and their duplicative costs are imposed on New Jersey ratepayers.
Guess who’s going to pay?
Over the long term, this exclusion increases costs by creating inefficiencies across the industry. Generation companies typically lack expertise in building transmission; their expertise is in generation. But the statute incorrectly says otherwise: The transmission developers who are the experts are prohibited from building anything and even simply competing in the process. Competition is the only force that keeps costs low.
The Murphy administration should be recognized for its pivotal energy, environmental, and economic goals — moving quickly to procure the first 1,100 megawatts of offshore wind and the larger goal of 3,500 megawatts of offshore wind by 2030. However, if we are going to truly harness the energy of offshore wind, we must do it right and allow experienced transmission companies to compete in the process. Otherwise, it is the ratepayers of New Jersey who will figuratively and literally pay the price.