Biden-Backed New Jersey Wind Farm Will Raise Electric Bills, Experts Say

Foreign company Orsted is set to receive $1 billion in green energy subsidies to complete controversial project

(Christopher Furlong/Getty Images)
July 14, 2023

A Biden administration-approved wind farm off the coast of New Jersey that will cost taxpayers nearly $1 billion in subsidies will also raise their utility costs, experts and lawmakers say.

President Joe Biden's Interior Department last week approved what will be the nation's largest offshore wind farm located about 13 miles off the coast of Atlantic City. One day later, New Jersey Democratic governor Phil Murphy signed a bill that provides Denmark-based company Orsted, which will build the wind farm, with lucrative tax breaks. While that money was supposed to go to ratepayers to alleviate higher costs, the measure allows the foreign company to pocket the cash. As a result, the state's Division of Rate Council—an independent group that represents New Jersey ratepayers—says the project will raise rates.

"It should be clear that statements claiming that this bill will not cost ratepayers additional costs are inaccurate," the council said in a statement. Republican congressman Chris Smith (R., N.J.) similarly said the wind farm "will force residents—who are already being crushed by an unfair tax burden and an exorbitant cost of living due to high inflation—to pay more for their electric bills." New Jersey's nonpartisan legislative office also found that the project means rates "may be higher than otherwise" but could not give a more accurate assessment as Murphy failed to provide fiscal details.

The wind farm reflects Biden's emphasis on "tackling the climate crisis" through the Inflation Reduction Act, which provides hundreds of billions of dollars in green energy subsidies. Some of that money—up to $1 billion, according to Republican state lawmaker Ed Durr—will go to the foreign company Orsted, spending that Biden hopes will help the nation achieve a "carbon pollution-free power sector" by 2035.

Murphy, whose office did not return a request for comment, has an "Energy Master Plan" of his own, which aims to help New Jersey "achieve 100 percent clean energy by 2050."

These efforts, however, are prompting concerns across the country that an increased reliance on green energy will lead to power blackouts and energy rations.

A June report, for example, found that Californians will in the future not be able to consume the same amount of energy should they move forward with plans to rely on green energy production. Watchdog groups such as the North American Electric Reliability Corporation, meanwhile, have warned that an increase in green power generation and a decrease in fossil fuel power plants could lead to widespread energy shortages.

Green alternatives such as wind and solar rely on favorable weather conditions to operate at full capacity. If those conditions aren't met, power demand can outpace supply. Coal and natural gas plants, by comparison, can be turned on and off at will—but many states are retiring those plants in favor of wind and solar. "The system is closer to the edge," North American Reliability Corporation director John Moura said in May. "More needs to be done."

Beyond cost and reliability concerns, nautical business owners are also upset with the new offshore wind farm, arguing that their legal fishing space will shrink and they will not be able to navigate around the turbines. They also fear that the turbines could prompt marine life to change their migration patterns, thus making fishing more difficult.

Environmental groups such as Clean Ocean Action have echoed those concerns. The group in January said the offshore wind farm efforts are "too much, too fast" and will hurt marine ecosystems.

Orsted nonetheless is looking to expand its operations up and down the east coast. If those efforts are anything like the company's New Jersey projects, they will attract controversy.

"The hardworking people of New Jersey deserve better than Trenton's plan to bail out foreign offshore wind corporation Orsted and give away billions of federal tax credits intended for ratepayers," Rep. Smith said in a statement.