WEST WINDSOR — Get the rules right, but move quickly.
That was the message of dozens of speakers at Wednesday’s public hearing held by the Board of Public Utilities, which asked for input on how to solicit bids on up to 1,100 megawatts of electricity generated by offshore wind developers.
Time is of the essence because a federal tax credit to help pay for offshore wind farm development is due to expire at the end of next year.
“We urge that you issue a solicitation for the full 1,100 as quickly as possible,” said Abby Watson of Siemens Gamesa Renewable Energy, which she said is the world’s largest offshore wind turbine manufacturer. “Many have mentioned the federal investment tax credit — worth roughly 12 percent of the capital cost of a farm – which will save ratepayers hundreds of millions of dollars.”
In January, Gov. Phil Murphy signed an executive order to finally implement the Offshore Wind Economic Development Act of 2010, which languished under Gov. Chris Christie.
The law creates ratepayer-financing of wind field development through an Offshore Wind Renewable Energy Credit program, which Murphy said the BPU is in the process of creating and will ultimately be funded by ratepayers.
The order also committed the state to quickly generate 1,100 megawatts annually of offshore wind energy, and 3,500 megawatts of generation by the year 2030 — enough to power at least 1.5 million homes, according to Murphy.
The BPU was looking for guidance on what should be in the bids and whether they should be limited to smaller farms to start or open to any size up to 1,100 MW.
“Starting a new market with a robust initial (offering) is helpful to the supply chain to mobilize. The supply chain needs a certain amount of scale to make business decisions they need to make,” Watson said. “Emphasize the lowest cost to the greatest extent possible.”
She and others — such as Elisabeth Treseder of Orsted, which holds a lease to develop a wind farm 10 miles off Atlantic City — also suggested accepting projects of any size up to 1,100 MW in the initial solicitation. That would encourage as much participation as possible and allow cost comparisons among several differently sized projects.
Representatives of transmission development companies said it is counterproductive that state law excludes them from bidding to build transmission lines from wind farms to the electric grid on land. Only offshore generation companies are allowed to bid, said Clarke Bruno of Anbaric, based in the Boston area.
“This limited competition could inadvertently allow for the development of an industry monopoly,” Bruno said.
He said Anbaric is the only company in the last decade to successfully develop two 660 megawatt electricity transmission lines in New Jersey, so has experience dealing with the grid operator PJM, and with state permitting, and with burying transmission lines underground and underwater.
His company has already developed plans for transmission lines that could accommodate energy generated by a number of wind farms up and down the coast, he said, and has applied to PJM to connect to the grid in multiple places.
His company would have to have an agreement with a wind farm company in order to participate under current law.
Environmentalists asked that applications also be compared based on their protections for endangered species such as the North Atlantic right whale, which is believed to have a population of just a few hundred.
And business groups stressed controlling costs.
The business community consumes more than 60 percent of the electricity used in the state, so has a vested interest in energy policy, said Chrissy Buteas of the New Jersey Business and Industry Association.
“The implications on prices are of grave concern,” she said. “We already pay some of the highest electricity rates in the country. We would encourage the board to be mindful of the impact on the ratepayer.”
Director of the Division of Rate Counsel Stefanie Brand focused on the need for detailed, specific information getting to bidders and the public.
“The process of analyzing bids and looking at net benefits needs to be public and transparent — an opportunity for discovery,” she said, so her office and others can explore the claimed benefits and costs submitted.