Another offshore wind ask

Jul 05, 2023

Good morning and welcome to a special Wednesday edition of the New York & New Jersey Energy newsletter. We'll take a look at the week ahead and look back on what you may have missed last week.

ATLANTIC SHORES ASKS FOR MORE: A New Jersey bill cleared the state Legislature last week to allow Orsted to keep hundreds of millions of dollars in federal tax incentives that the company otherwise would be required to pass along to state utility customers. Gov. Phil Murphy is certain to sign it. Without the deal, the company and Murphy administration officials said the wind farm would not be built.

Now comes Atlantic Shores — which is developing what would be the state’s second offshore wind project — making clear it too needs more money. The company, a joint venture of Shell and the French energy company EDF, said “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, the largest offshore wind project in the State of New Jersey and third largest project awarded in the United States.”

The company, like Orsted, is citing changing economic conditions since its project was first approved a few years ago. But, Atlantic Shores is going to have to adopt different talking points than Orsted, which could claim that the bill to help it doesn’t increase ratepayer bills — it only keeps them from decreasing. Atlantic Shores will be asking for higher rates.

Atlantic Shore’s pitch seems to be that, sure, it’s nice if New Jersey has one wind farm, but the state will never be home to a full offshore wind industry if it’s just that one wind farm. “Tens of thousands of real, well-paid and unionized jobs are at risk,” the company said. “Hundreds of millions in infrastructure investments will be forgone without a path forward.”

If there is any real appetite to help Atlantic Shores, it likely won’t be visible for months to come, as state lawmakers head out on the campaign trail until the fall.

Orsted’s bill only got through thanks to an odd coalition in the Senate: Senate Republican Minority Leader Steve Oroho helped get it to the floor by voting the bill out of committee, though he ultimately voted against final passage. Sen. Andrew Zwicker, a Middlesex County Democrat in what could be a tight race this fall, abstained in committee then voted for the bill on the floor. — Ry Rivard

HAPPY WEDNESDAY MORNING: Let us know if you have tips, story ideas or life advice. We're always here at mfrench@politico.com and rrivard@politico.com. And if you like this letter, please tell a friend and/or loved one to sign up.

Here's what we're watching this week:

THURSDAY

— The Sabin Center for Climate Change Law at Columbia Law School hosts a discussion of lessons from California’s cap-and-trade program, with a panel including a policymaker, analyst and Environmental Defense Fund advocate, noon. NYSERDA advertised the event in an email update on the state’s cap-and-invest program. Another on Washington’s program is set for next week.

Around New York

— Bottle redemption centers are struggling in New York as the 3.5 cent fee they collect has remained unchanged by the state since 2008.

— The fishing industry has concerns about transmission cables planned for the Beacon Wind project, which is now up for public comment.

— Gannet interviewed a New York forest ranger who went to Canada to combat the smoke-spreading blazes, which are being exacerbated by conditions caused by climate change.

— Albany ponders its trash future.

Around New Jersey

— Atlantic City Electric will spend $93 million on a portfolio of clean-energy projects, including to hook up solar arrays to the utility’s power grid.

What you may have missed

MURPHY WANTS WIND BILL — POLITICO’s Ry Rivard: Before New Jersey lawmakers head home for the summer, Gov. Phil Murphy wants a bill on his desk to save the state’s first offshore wind farm.

To administration officials, the bill is about more than just saving energy company Orsted’s Ocean Wind 1 project off the South Jersey coast to generate power for 500,000 homes — it’s about saving the state’s once-in-a-generation chance to host a massive new industry. Without a bill to help Orsted, Murphy officials fear the project will not be built, a major source of clean energy will be lost and New Jersey could end up losing jobs to New York and other states on the Atlantic Seaboard that seem more willing to pour money into offshore wind projects.

The passage of the bill "is foundational to New Jersey’s continued offshore wind growth and clean energy future,” Murphy spokesperson Bailey Lawrence said in a statement to POLITICO. “To that end, Gov. Murphy looks forward to signing a bill that will help realize the state’s first offshore wind project and critical supply chain facilities — as well as their associated clean energy and economic benefits." Though Orsted and Murphy officials have been discussing ideas to save the project since last year, the administration has not discussed the bill with the press until now.

CANADIAN SMOKE DELAYS CANADIAN TRANSMISSION EVENT: An event highlighting progress on a transmission line to bring Canadian hydropower into New York City got nixed yesterday by Canada’s latest, less desirable export: wildfire smoke. The Champlain Hudson Power Express will plug into New York’s grid in Astoria, supplying emissions-free electricity to the city and reducing the need to run the fossil fuel plants that currently provide the majority of the city’s power.

An event with local officials, developers of the line, an executive from Hydro-Québec, Con Edison’s Tim Cawley and the United States Ambassador to Canada was scheduled for Thursday at the site of the converter station for the line. Poor air quality led to the event being postponed. A new date for the event has not yet been shared.

The transmission project is already under construction, and currently targeted for completion in spring 2026. If that timeline slips, the state’s grid operator has warned of reliability concerns that would likely result in some older, dirtier fossil fuel units slated for retirement staying online longer. — Marie J. French

$400M PFAS SETTLEMENT: New Jersey officials announced a $393 million proposed settlement with a company accused of polluting parts of South Jersey with PFAS. The proposed settlement is about contamination from Specialty Polymers USA’s facilities in West Deptford, a town along the Delaware River, that manufactured industrial plastics, coatings, and other chemicals. The settlement, among the largest of its kind for a single site, comes as other companies, including 3M and DuPont, look to settle national class actions against them for widespread contamination.

The Solvay settlement proposal, announced Wednesday by Attorney General Matthew Platkin and state Department of Environmental Protection Commissioner Shawn LaTourette, requires the company to clean up and compensate the state for damage across a 37-square-mile area. The company will be required to post a $214 million guarantee to ensure that the state can do the cleanup if Solvay fails to meet ongoing obligations. The company is also paying $100 million that is expected to remove contamination from public water systems, as well as private wells. Other money will be to compensate the state for regulatory costs and damage to the state’s natural resources, including groundwater, surface water and soil. — Ry Rivard

PENN STATION REDO — POLITICO’s Ry Rivard: A development team led by the former head of New York’s Metropolitan Transportation Authority has a new $6 billion plan to redo Penn Station. The plan’s main obstacle? The current head of MTA. ASTM, an Italian design firm whose North American CEO is former MTA chair Pat Foye, unveiled its design Wednesday to make a “graceful public realm” out of the maligned and dreary Manhattan train station.

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