December 15, 2022 — Offshore wind farms in New Jersey should consider scaling back how much new offshore wind capacity is approved next year because economic and financial uncertainties could lead to higher prices, according to the Division of Rate Counsel.
Rate Counsel Director Brian Lipman suggested slowing down the pace of offshore wind development as higher interest rates, supply chain disruptions and inflationary pressures are causing some developers to seek to renegotiate the contracts they have been awarded to build wind farms.
“This is of great concern,’’ Lipman told the staff of the state Board of Public Utilities Tuesday during a stakeholder meeting. The board was meeting to discuss making a third solicitation for offshore wind projects early next year. Lipman suggested that the board’s staff develop guidelines to prevent after-the-fact increases to contracts awarded to developers.
Ørsted, the developer of New Jersey’s first offshore wind farm about 15 miles off Atlantic City, has acknowledged it is not earning what it expected on its U.S. projects. If the company seeks to renegotiate its contract, it must file a petition with the BPU, Lipman said.