NJ Gov. Murphy signs off on tax break for offshore wind developer

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• Democratic New Jersey Gov. Phil Murphy on Thursday signed into law a bill granting Danish offshore wind developer Orsted a tax break.
• The federal tax credit waiver, whose value was unspecified by Orsted and Democratic legislators, is valued at nearly $1 billion, according to Republican state Sen. Edward Durr. 
• "If we don't figure out a solution, this doesn't get done in New Jersey," Murphy said after signing the bill.

New Jersey Gov. Phil Murphy signed a bill Thursday giving a tax break to Danish offshore wind developer Orsted for the first of two energy projects it plans to place in the waters off the Jersey Shore.

The Democratic governor said the financial aid was necessary to ensure that offshore wind projects and the jobs they create happen in New Jersey rather than in competing states.

Before the ink was dry on that bill, he faced pressure from another offshore wind company looking for similar assistance.

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The bill allows Orsted to keep federal tax credits that it otherwise would have been required to pass along to New Jersey utility ratepayers. Lawmakers who narrowly approved the bill last week said the aid is necessary to help Orsted deal with inflation and the lingering effects of the COVID-19 pandemic.

"If we don't figure out a solution, this doesn't get done in New Jersey," Murphy said after the ceremony at the Paulsboro Marine Terminal, where the huge supporting structures for wind turbines, called monopiles, are manufactured. "We know war in Europe, inflation, supply chain — these projects have gotten a lot more expensive, and we're not the only place that's dealing with that. Either we get this bill done and the industry thrives here, and the jobs that are associated with it, or it goes somewhere else."

Neither the company nor Democratic lawmakers listed the value of the tax break, but a Republican state senator, Edward Durr, put it at nearly $1 billion.

Democratic New Jersey Gov. Phil Murphy speaks to the press after signing off on a tax break for Denmark-based offshore wind developer Orsted, reportedly valued at almost $1 billion. (AP Photo/Wayne Parry)

Atlantic Shores said earlier this week it too wants government assistance to build its own wind farm off the southern New Jersey coast, warning that the project is "at risk" without additional financial assistance from the government.

Murphy said he is "open-minded" toward the Atlantic Shores request.

Atlantic Shores is a joint partnership between Shell New Energies US LLC and EDF-RE Offshore Development LLC.

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The bill signing comes a day after Orsted's Ocean Wind I project received clearance from the U.S. Bureau of Ocean Energy Management to begin construction on a wind farm 13 to 15 miles off the coast of Atlantic City and Ocean City. Additional approvals are still required at the federal and state levels, but Orsted said it expects to have them in hand by the second quarter of 2024.

It plans to begin construction on the wind farm, with nearly 100 wind turbines, this fall. It aims to provide enough electricity to power 500,000 homes.

Orsted also has approval to build a second wind farm off New Jersey's coast, but that project is not as far along in the regulatory process.

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At the ceremony, Murphy also signed bills to incentivize film production in the state, and to help finance housing and commercial projects in economically struggling areas.