Wind firm power project rebid could cost residents

Shore towns urging state to reject likely price hike

By: Amanda Oglesby
Asbury Park Press
USA Today Network - New Jersey

TRENTON - A group of coastal New Jersey towns are urging state officials to reject any attempts by an offshore wind developer to rebid its power project and increase the cost of electricity.
..... Last week, [04/04/2024] officials from eight towns - Long Beach Township, Beach Haven, ship Bottom, Barnegat Light, surf city, Havey Cedars, Brigantine and Ventner City - sent a letter to the state Board of Public Utilities urging officials there to deny any attempt by Atlantic Shores Offshore Wind to rebid its existing New Jersey power project.
..... Rebidding projects has allowed state officials and offshore wind developers elsewhere to renegotiate prices for OREC's or offshore wind renewable energy certificates. In New York, Denmark-based wind developer Orsted rebid its Sunrise Wind project and oil company Equinor rebid its Empire Wind i project, Reuters reported. The rebidding followed post-pandemic surges in prices for materials and labor as well as higher interest rates.
..... Offshore developers ear one OREC for each megawatt-hour of electricity produced through wind turbines. each OREC price in New Jersey is set in an agreement between the state Board of Pubic Utilities and the wind developer and is calculated based on federal and state tax credits, operational coots and electricity customers impacts, among other factors.
..... In 2021, Atlantic Shores Offshore Wind was awarded an OREC price beginning at $86.62 per megawatt-hour in year one of its 20-year contract, increasing 2.5% annually. Board of Public Utilities documents show.
..... Now the coastal towns fear that Atlantic Shores Offshore Wind will rebid its original project - a 157-turbine project off Atlantic City - and obtain higher OREC prices.
..... Earlier this year, [2024] the utilities board approved two more offshore wind projects and awarded OREC agreements at fare higher rates. Attentive Energy Two agreed to an OREC price of 4131 per megawatt hour in the first year of the project with 3% each year afterward. Leading Light Win will receive an OREC price of $112.50 per megawatt hour in year one, then a 2.5% increase each year.
..... High costs have led companies to cancel offshore wind projects. last year, [2023] Orsted abandoned plans to build two offshore wind turbine farms in New Jersey. The company was awarded an OREC price of $98.10 per megawatt hour for its first year of operation.
..... Other projects throughout the Atlantic have also been canceled or renegotiated due to rising costs. Equinor and oil company BP announced in January [2024] that they would "reset" their joint New York project known as Empire Wind 2 and cited "changed economic circumstances."
..... That same month, Orsted said it would "reposition" its Skippjack Wind project in Maryland, saying its initial "payment amounts for ORECs ... are no longer commercially viable because of today's challenging market conditions, including inflation, high-interest rates and supply chain constraints."
.....Atlantic Shores; existing project also has OREC prices well below those of the two New Jersey wind projects approved earlier this year. [2024] Atlantic Shores; project would raise electricity prices about $2.21 per month (in 2023 dollars) for the average homeowner, according to estimates. in comparison, the Attentive Energy Two project would raise electricity bills for homeowners about $3.13 per month (in 2023 dollars) and Leading Light Wind would have an estimated $3.71 per month impact on homeowners' bills. Board of Public Utilities documents show.
..... The New Jersey shore towns, in their letter to the utilities board, said they worried that if Atlantic Shores rebids its current project and it awarded a higher OREC price, New Jersey ratepayers would face billions of dollars in additional electricity costs over the length of the project.
..... A spokesperson for Atlantic Shore declined to say whether the company was rebidding , but said in an email to the Press: "Atlantic Shores remains committed to New Jersey and delivering its offshore wind portfolio. We continue to evaluate the draft solicitation guidance document while driving our project forward, brining good jobs and clean, renewable power to the Garden state."
..... The state Board of Public Utilities is currently in its fourth round of biding for offshore wind energy projects. The fourth solicitation for bids is expected to open sometime before the end of June. [2024]
..... Despite the rising costs for offshore wind energy, the federal government continues to approve wind power projects. On Tuesday, [04/02/2024] the Biden administration announced approval of the nation's eight offshore wind project south of Martha's Vineyard, Massachusetts, called New England Wind.
..... "We will continue to use every available tool to ensure America leads the future of the offshore wind industry,: National Climate Advisor Ali Zaidi said in a news release. "This is a win-win-win for workers, communities, and our ability to tackle the climate crisis."

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