Offshore Wind: State Update (NJ, NC, NY and the Great Lakes)

The agency formerly known as MMS (and now known as the Bureau of Ocean Energy Management, Regulation and Enforcement) has certainly had its hands full this summer -- what with the renaming and internal reorganization in the wake of the BP Gulf Oil spill. Consequently, while the feds juggle other balls, a number of states have been moving to adopt (or reject) a variety of business and legislative initiatives that impact offshore wind project development.

New Jersey:

On Thursday August 19, 2010, New Jersey Governor Chris Christie signed into law the Offshore Wind Economic Development Act ("OWEDA"). The OWEDA directs the New Jersey Board of Public Utilities (BPU) to develop and establish an offshore wind renewable energy certificate program (OREC) that calls for a percentage of electricity sold in the state to be from offshore wind energy. This percentage would be developed to support at least 1,100 megawatts of generation from qualified offshore wind projects. The OWEDA also offers financial incentives to business that build manufacturing, assemblage, and water access facilities for qualified offshore wind projects. These incentives include tax credits and funding from the New Jersey Economic Development Authority (NJEDA).

The OWEDA is the most comprehensive-- and the most conducive -- state legislation that has been passed by a state to support the development of offshore wind energy. New Jersey project developers including the Deepwater Wind/PG&E Global joint project, and Fisherman's Energy will surely laud Governor Christie's commitment to offshore wind.

North Carolina:

On Friday August 20, 2010, Charlotte, North Carolina's Duke Energy announced that it has cancelled its plans to develop a three-turbine offshore wind demonstration project in a lagoon in North Carolina's Pamlico Sound. Duke noted that its analysis of the proposals signified that permitting, design and construction are “no longer economically viable”. Duke estimated that costs to get the first turbine operating at the Pamlico Sound location would cost $88 million, although costs for the second turbine would drop to $14 million. Duke further reported that its decision was made in part due to the greater than expected environmental impacts that would result from the construction of the project at the Pamlico Sound location.

Although the Pamlico Sound project will not move forward, Duke continues to work with the University of North Carolina at Chapel Hill, to develop a much larger, utility scale offshore wind farm in the ocean off of North Carolina’s coastline. In support of this effort, Duke will continue to fund a bird study conducted through UNC as well as studies of North Carolina's coastal wind resources.

Finally, Duke Energy is now calling on state lawmakers to consider legislation that could help the development of large-scale offshore wind capacity off the North Carolina coast. Now that New Jersey has passed qualified legislation in support of offshore wind development, we should expect that North Carolina lawmakers will be considering whether New Jersey's legislation can provide a model for North Carolina.

New York and the Great Lakes

The New York Power Authority is currently reviewing five proposals from private-sector wind developers to build offshore wind turbines somewhere in lakes Ontario or Erie. The Great Lakes Offshore Wind Project(hilariously shortened to "GLOW"-- which I suppose is better than "GLOP") originally issued a Request For Proposals in December 2009. The agency has urged public officials and citizens to be patient until a developer is chosen and a location revealed, likely in late 2010 or early 2011.

Lawmakers in Wayne, Oswego, Jefferson and Chautauqua counties have voted by wide margins to oppose the plan by the New York Power Authority to locate one or more wind farms in the near-shore waters of lakes Ontario or Erie. The Niagara County Legislature endorsed the authority proposal last year, but recently named a panel to revisit that decision. On August 19, 2010, 29 Monroe County lawmakers considered a resolution opposing the development of wind farms in Lake Ontario. Only 12 of the 29signed the resolution, thus falling short of a majority.