New Jersey’s recent decision to award tax benefits to Orsted for its 1100MW Ocean Wind 1 project is being challenged by opponents of offshore wind in the state.
According to a lawsuit filed in Superior Court by interest groups Protect Our Coast NJ and Defend Brigantine Beach, the subsidies constitute an unconstitutional state giveaway by favouring a specific private entity. They are asking the court to invalidate the law.
The legislation, signed into law at the start of this month, allowed Orsted to keep almost $1bn of federal tax credits. This reversed a previous decision that required Orsted to refund unused funds to ratepayers in order to keep the public from baring the costs of developing the project.
The move came amid rising inflation, interest rates and supply chain costs pushing up the costs to develop offshore wind projects.
The suit is now pending before Superior Court Judge Douglas Hurd and is expected to be briefed and argued in autumn.
“The Legislature’s giveaway of federal tax credits to Orsted benefits a single company in violation of the New Jersey Constitution,” said Bruce Afran, counsel for the two groups that filed the suit.
“Basically, the Legislature caved to the Danish engineering company, giving away a billion dollars in tax credits to relieve Orsted from its commitment to build Ocean Wind 1 from its own money.”