New Jersey lawmakers advanced on Tuesday a bill that would allow federal tax credits, originally meant for energy customers, to go to the Danish “green” corporation Ørsted, the company responsible for the widely hated “Ocean Wind” offshore projects that have inspired widespread protests statewide.
Lawmakers in both the New Jersey Assembly and Senate voted on a bill to grant the tax credits — believed to total in the billions, though Ørsted has refused transparency on the price of the Ocean Wind projects in total — on Tuesday. The Assembly approved the bill, while the Senate amended it, requiring a likely new vote in both chambers of the state legislature.
The bills both identified Russia’s ongoing invasion of Ukraine as a reason for granting Ørsted the tax break.
The tax credits stem from provisions of Congress’s “Inflation Reduction Act,” which in reality dramatically reduced federal spending for infrastructure projects that address alleged “climate change.” Ørsted’s Ocean Wind I and II projects are expected to bring massive wind turbines to the Jersey Shore, alarming residents who fear that the turbines and industrial activity associated with them will destroy the local ecosystem and, with it, the longstanding tourism and fishing industries of New Jersey.
Among other concerns raised are the fact that Ørsted, a foreign company, would obtain a stranglehold over the power generation of a U.S. state; the turbines potentially interfering with critical U.S. Navy projects, and concerns that sonar used to map the ocean floor prior to building the turbines has fueled the growing number of bizarre whale deaths along the Mid-Atlantic Coast.
The Government Accountability Office (GAO), the Congressional watchdog agency, agreed to launch an investigation this month into offshore wind’s potential effects on “the environment, the fishing industry, military operations, navigational safety, and more.”
Popular distaste for the project in New Jersey has led the two Shore Congressmen, Reps. Chris Smith (R-NJ) and Jeff Van Drew (R-NJ), to aggressively oppose the projects before thorough studies on their impact on the state. In the state legislature, however, local officials presented minimal opposition this week to the Inflation Reduction Act subsidies going to Ørsted instead of ratepayers, or the customers buying the power generated.
“A state Senate committee approved a bill Tuesday that would allow Orsted to keep federal tax credits to help counter what they termed lingering economic effects from the [Wuhan coronavirus] pandemic and elevated inflation,” the Associated Press reported on Tuesday. “Amendments to the bill require Orsted to post a $200 million guarantee with the state, and prepare a report on the financial viability, possible environmental impacts and likelihood of finishing the project on time.”
Ukraine featured prominently in the text of both bills, despite no concrete connection between Russia’s actions in the Eastern European countries and the industrialization of the Jersey Shore.
“On February 24, 2022, the Russian Federation invaded Ukraine, starting a war that, in addition to causing a horrific loss of life and human suffering in Ukraine, has further exacerbated global market disruptions and further contributed to commodity shortages and higher rates of inflation,” the text of both the Assembly and Senate bills read.
“In light of Congress’ intention to provide tax credits to support and bolster the offshore wind industry and the production of offshore wind energy in the United States,” the bills continued, “and in light of the high rates of inflation and unprecedented macroeconomic challenges arising from the global pandemic and war in Ukraine, it is appropriate to reexamine the allocation of tax benefits.”
The bill would allow, it goes on to specify, “a qualified offshore wind project [Ocean Wind] to elect to retain the benefit of the federal tax credits that were not in existence at the time of a qualified offshore wind project’s award in exchange for pledged assurances that the qualified offshore wind project will proceed to construction and that it will make additional investments in New Jersey offshore wind manufacturing facilities.”
The tax credits in question are known as the Investment Tax Credits and Production Tax Credit. Affordable Energy for New Jersey (AENJ), a grassroots group, estimated that Ørsted could be eligible for nearly $3 billion in Investment Tax Credits and $1.3 billion from the Production Tax Credit. AENJ enthusiastically advocates against Ørsted’s presence in New Jersey. Jonathan Lesser, writing at the conservative site Save Jersey, estimated the Investment Tax Credit to be cloesr to $2 billion. A hard figure is impossible to ascertain as the credits are derived from percentages of the costs of the projects, which Ørsted refuses to disclose.
Lesser estimated that “the average residential customer will be forced to pay over $200 to Ørsted” if the bill passes, “in addition to the above-market costs of the electricity itself and the cost of the backup generation needed to ensure that, when the wind doesn’t blow, there will be enough electricity to charge all of those electric vehicles the Murphy Administration will force New Jerseyans to buy and run the electric heat pumps, water heaters, and stoves they will be forced to use.”
NJ Spotlight News noted in its reporting on the bill on Tuesday that, despite the tax incentives being offered generally to green energy companies, “no other wind developer will receive any of the federal tax credits” as a result of this bill aside from Ørsted.
“There’s no additional cost to ratepayers,” Ørsted insisted in a statement on Tuesday, according to the Associated Press. “The Inflation Reduction Act increased the federal tax incentives and did so to create local investments into states like New Jersey. Orsted will increase its investments in New Jersey if the bill is enacted.”
“These federal incentives present an opportunity for New Jersey to further secure in-state economic investments and hundreds of jobs at no additional cost to ratepayers,” the company insisted.
The New Jersey Division of Rate Counsel opposed the original bill.
“There should be no doubt that this bill will increase the amount the developer earns on this project and will result in higher … prices being paid by ratepayers. That is the inevitable result of this bill.”
The New Jersey Monitor reported on Tuesday that the vote attracted hundreds of protesters demanding an end to the Ocean Wind projects.
“I can’t believe that I have to be here,” sighed the mayor of Point Pleasant Beach, Paul Kanitra, one of the most vocal politicians against the wind projects and a staple at protests. “I’m the mayor of a 4,500-person town, one and a half square miles, and you guys are about to spend more taxpayer money on giving an international corporation who can’t manage their own budget the ability to come in and destroy my town at the Jersey Shore and our entire tourism economy.”
Point Pleasant Beach is a popular family destination for locals in the summer, boasting a large boardwalk and vibrant recreational fishing industry. In February, the boardwalk hosted a “Save the Whales” rally to oppose the Ocean Wind projects.
About 25 minutes south, in Seaside Park, New Jersey, authorities confirmed the unexplained death of another whale, a bottlenose dolphin, on Wednesday, as well as another dolphin in Woodbridge.
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