Offshore Wind Energy Moves One Step Closer in New Jersey
On August 19, 2010, Governor Chris Christie signed the bipartisan Offshore Wind Economic Development Act (the "Act") (S.B. 2036), which is expected to support the initial deployment of offshore wind energy projects off the New Jersey coast. New Jersey is competing with several other states in the region, including Delaware, Rhode Island, Massachusetts, and New York, to be the first to construct a large offshore wind farm.
To attract project developers and related businesses, the Act provides several incentives for offshore wind energy projects. First, the Act directs the Board of Public Utilities ("BPU") to develop an Offshore Wind Renewable Energy Certificate ("OREC") program that supports at least 1,100 megawatts of generation from qualified offshore wind projects. The OREC program will require New Jersey electric suppliers (electric power suppliers and basic generation service providers) to supply a certain percentage of electricity from offshore wind resources, as they are already required to do for solar and other types of renewable energy. With construction costs estimated to exceed $10 billion for a proposed 300-350 megawatt wind farm, supporters of the Act argue that ORECs are absolutely essential to the viability of offshore wind power in New Jersey.
Second, the Act authorizes the New Jersey Economic Development Authority ("EDA") to provide up to $100 million in corporation business tax credits for the development of "qualified wind energy facilities" in "wind energy zones." To be eligible for the credit, a business must, among other things, make or acquire capital investments of at least $50 million and employ at least 300 new full-time employees. The Act also authorizes the EDA to utilize proceeds from the sale of greenhouse gas allowances under the Regional Greenhouse Gas Initiative, to support qualified offshore wind projects and related businesses in New Jersey.