The state of New Jersey recently passed the Offshore Wind Economic Development Act (the “OWEDA”) that will require New Jersey’s electricity providers to purchase a certain minimum percentage of their total electricity supply from wind operations in the state’s coastal waters.
The New Jersey Board of Public Utilities (the “BPU“) will have the authority to determine the minimum percentage that utilities must purchase from offshore wind, and will issue offshore-wind renewable energy certificates (“OREC”s) to operators. The minimum percentage will be based on the projected total of the ORECs issued during the first twenty years of all the offshore wind projects’ commercial start dates.
If there are insufficient ORECs available in the market to meet the minimum percentage, the utilities will be required to make a “proportional offshore wind-alternative compliant payment.”
The minimum percentage determined by the BPU must support an offshore wind market of at least 1,100 megawatts, which is enough power for 300,000 homes in this state of 8.7 million people. The OWEDA also authorizes the New Jersey Economic Development Authority to provide tax credits of up to $100 million for offshore wind projects.
The BPU is developing the regulations to establish the OREC program, which will be unveiled in early 2011.