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NJ picks developer for wind farm off Atlantic City

State regulators approved a subsidy for Danish firm Ørsted to build wind turbines off Atlantic City.

Of the 14 proposals submitted to the state in December, the Board of Public Utilities selected Ørsted to receive subsidies for a 1,100 megawatt wind farm about 15 miles out in federal waters, the commissioners announced at Friday’s meeting.

In total, the project will cost ratepayers $1.6 billion over 20 years, said Kelly Mooij, deputy director of the BPU’s Division of Clean Energy.

That breaks down to a $1.46 increase on New Jersey residential customers’ monthly bills, to be passed onto Ørsted, the BPU said. Commercial customers will be charged an extra $13.05 per month and industrial customers about $110.

“I’m having difficulty grasping the reality of the moment. … We are going to be the central focal point for offshore wind on the East Coast of the U.S.,” BPU President Joseph Fiordaliso said at the hearing.

The solicitation began last September, after Gov. Phil Murphy signed an executive order directing the BPU to implement the Offshore Wind Economic Development Act to develop 3,500 megawatts of wind energy off New Jersey by the end of the decade.

Ørsted’s farm is one of the first steps in reaching that goal. It will create 15,000 jobs over its 25-year lifespan, power 500,000 homes and result in $1.17 billion net economic benefits to New Jersey, the company has said. Construction is expected to begin in early 2020 and be completed by 2024.

The commissioners said Ørsted stood out because it brought the greatest economic benefits, had the best chance of successfully operating and promised the fastest completion date.

“Ocean Wind will ensure that the state and its residents not only benefit from clean, renewable power,” said Thomas Brostrøm, CEO of Ørsted U.S. Offshore Wind and President of Ørsted North America, “but that they reap the rewards of being an early player in the offshore wind industry as it grows in the U.S.”

Ørsted has already made its mark on Atlantic City, opening a small office on Pacific Avenue last year and partnering with nearby Stockton University on research, along with other New Jersey universities.

The global company said it’s working with Atlantic City developer Joseph Jingoli’s Competitive Edge and Live Classroom programs to train residents interested in the construction of wind farms. It’s also launching a fund in Atlantic and Cape May counties to invest as much as $15 million in grants to support infrastructure investments and small, women- and minority-owned businesses looking to join the offshore wind industry.

Mayor Frank Gilliam said the project will bring permanent and high-skilled jobs to the resort, a welcome sign for a city whose economy is dominated by hospitality and gaming.

“This project exemplifies our goals of sustainability and economic diversity for Atlantic City,” Gilliam said in a statement.

New Jersey Sierra Club President Jeff Tittel applauded the BPU’s latest move, saying it signaled a step forward in reducing New Jersey’s carbon emissions.

“This is a win for the environment and the battle against climate change,” Tittel said.

Ørsted, which is working with PSEG, has said it is considering connecting its turbines to the power grid at the now closed coal-fired B.L. England plant in Upper Township. The plant’s owner is no longer tied into plans for a 22-mile South Jersey Gas pipeline.

Two other companies submitted proposals to the BPU in December: joint venture EDF Renewables and Shell Energies’ Atlantic Shores Offshore Wind and Equinor’s Boardwalk Wind. Both still have chances to receive state subsidies for their projects.

The board will open two more solicitations for offshore wind in 2020 and 2022, commissioners said. The federal government is also leasing additional areas off the Atlantic Coast that could expand the pool of applicants.

“Our selection of Ørsted in this round should not be misinterpreted,” said Commissioner Robert Gordon. “No developer has a lock on New Jersey.”