Credit: (AP Photo/Michael Dwyer)

The final legislative approval of a bill awarding a billion dollars in federal tax credits to Ørsted late last week marked a huge and important win for the developer of New Jersey’s first offshore wind project.

But the bill’s narrow consent, passed on a party-line 21-14 vote near the end of a marathon voting session Friday, renews questions from critics over whether offshore wind will produce the economic benefits touted by the Murphy administration and at what cost to ratepayers. Twenty-one votes are the minimum needed to approve a bill in the state Senate.

The bill passed its first Senate committee vote three days before, also by one vote when a Republican senator joined Democrats to approve it. And the Assembly cleared it in its marathon voting session along strict part lines.

Gov. Phil Murphy is expected to sign the bill this week.

Offshore headwinds

The fiscal concerns were amplified after lawmakers steered the federal tax credits, originally intended to benefit utility customers as an offset for increases in their monthly electric bills to pay for the power from the wind farms, instead to Ørsted, one of the world’s biggest offshore wind companies.

The shift drew opposition from offshore wind foes, as well as from the New Jersey Division of Rate Counsel, who projected that ratepayers would end up paying higher bills as a result of the change.

Like other offshore wind developers, Ørsted faces financial challenges with this project and points to constraints in the supply chain, rising borrowing costs and inflation. Those factors led other states, including New York, to shift federal tax credits to offshore wind developers to keep projects moving forward.

The bill was amended to require Ørsted to put $200 million in an escrow account to help others in the offshore wind sector.

For some, that outcome supports arguments offshore wind is not a sound way to address the climate crisis.

For and against

“The economics of offshore wind just don’t work,’’ said Mike Makarski, a spokesman for Affordable Energy for New Jersey, an organization whose funders include business and civic groups opposed to Murphy’s clean-energy agenda. Makarski blames Friday night’s narrow approval of the bill on a growing uncertainty about offshore wind. “I guess members of the Legislature had a hard time swallowing a billion dollar bailout.’’

Others viewed it differently.

“Today’s passage reaffirms the state’s commitment to offshore wind,’’ Atlantic Shores, which has a contract to build the largest offshore wind farm in New Jersey, said in a statement. “Yet  to establish a durable, thriving, full-scale offshore wind industry in New Jersey, we need an industry-wide solution, one that stabilizes all current projects, including Atlantic Shore project 1.’’

Atlantic Shores proposes to build a 1,500-megawatt project 10 to 20 miles off the coast between Atlantic City and Barnegat Light. Ørsted’s initial project is 1,100 MW and  off the coast from Atlantic City. New Jersey hopes to develop 11,000 MW of offshore wind capacity by 2040.

David Pringle of Clean Water Action defended the  bill. “This bill puts offshore wind on a fairer playing field with the nuke and fossil fuel industries, which we keep throwing billions at,’’ he said. “Financially this is just a drop in the bucket. It will pay enormous dividends down the road with all the jobs that will be created.’’

The bill was amended to require Ørsted to put $200 million in an escrow account to help others in the offshore wind sector, including EEW-AOS, which plans to begin manufacturing monopiles to serve as the foundations for the offshore wind turbines put up by both Ørsted and Atlantic Shores.

— Editor’s note: Ørsted is a financial supporter of NJ Spotlight News.