New Yorkers can be pressured to pay 2.5 instances the market fee for electrical energy generated by the Empire Wind One offshore wind farm if the deal goes via, in keeping with an unbiased monetary evaluation.
The Trump Administration paused development of the controversial undertaking — 54 generators within the Atlantic Ocean some 14 miles south of Lengthy Island — final week, saying it wants additional evaluate. The undertaking has seen robust backing from Gov. Kathy Hochul and Mayor Eric Adams.
Trump’s transfer was welcomed by those that declare the undertaking goes to overcharge taxpayers.
“New Yorkers are entitled to clean, affordable, reliable energy,” Christina Kramer, president of Shield Our Coast Lengthy Island New York, advised The Publish. “And this is none of those things.”
The group had requested evaluation from Edward P. O’Donnell, a New Jersey nuclear engineer and marketing consultant who spent 35 years operating nuclear vegetation.
“Empire Wind One was awarded a contract to charge $155 a megawatt hour (MWH) for their power,” O’Donnell advised The Publish. “It’s a subsidy, because if you didn’t have Empire Wind One, the utilities would buy [power] from the wholesale market at about $50 a megawatt hour.”
The entire quantity of the subsidy, O’Donnell stated, can be $9 billion. The New York Unbiased System Operator (NYISO), who manages the state’s energy grid, is remitted to purchase energy generated by offshore wind over cheaper energy from gas-fired or nuclear vegetation.
The federal Inflation Discount Act, signed by former President Joe Biden in 2022, additionally offers a 30% tax credit score for offshore wind tasks that start development earlier than Jan. 1, 2026, and extra credit can be found for utilizing US labor and constructing supplies.
“A company who is building an $8 billion offshore wind project — that’s what they’re costing — can get up to half of that refunded to them as a tax credit,” O’Donnell stated. “That’s on us, federal taxpayers throughout the country. We’re all footing that bill.”
Congress might repeal the federal tax credit score, O’Donnell stated, however he additionally expects that may get thrown again on the client.
“If and when the tax credit gets repealed they would then lose $2 billion of their capital funding. They would go back to NYSERDA and say, we need another $50 per megawatt hour, or we need $205 or $210 per megawatt hour, whatever, or else we can’t go forward,” he speculated.
O’Donnell factors to earlier examples of Empire Wind One and one other contractor, Dawn Wind — which is constructing 84 generators within the ocean 30 miles east of Montauk Level — having already performed this.
In 2019, NYSERDA awarded a contract to Empire Wind One, owned by the Norwegian firm Equinor, at a fee of $118 per MWH for 25 years. It additionally agreed to pay Dawn Wind, owned by Orsted, a Danish power large, $110.37 per MWH for 25 years.
Three years later, each corporations needed fee hikes, citing excessive prices and provide chain bottlenecks brought on by the COVID-19 pandemic.
The requests had been declined by the New York State Public Service Fee, however NYSERDA gave them the chance to rebid their contract and awarded them extra money.
NYSERDA re-signed the builders with contracts at considerably larger costs: $155 per MWH for Empire Wind One, a 31% improve, and $146 per MWH for Dawn, a 32% value hike.
“The Empire Wind One rebid ratepayer subsidy will total $9 billion over the life of the facility,” O’Donnell wrote in his report. “The 2024 present value of these above-market ratepayer costs is $6.2 billion, compared with $4.4 billion for the original Empire Wind One contract.”
O’Donnell claims New York ratepayers will present $18 billion in subsidies to the 2 overseas offshore wind corporations.
With the ratepayer and federal subsidies, O’Donnell says his analysis exhibits Equinor would see a fee of return on their funding over 20%, a lot larger than the 9% regulated utility corporations are usually allowed to earn.
“I think that no public utility should be making money off of the residents. A public utility is supposed to be just that — a service that’s provided, that is created out of our tax dollars in part. But having these private equity companies make a fortune off of us after we’ve subsidized it is a proverbial slap in the face. We’re onto it, and we’re not going to stop,” Kramer added.
Empire Wind declined to touch upon the subsidies. A NYSERDA spokesperson declined to touch upon the financial evaluation however complained about its sponsor.
“Protect Our Coast Long Island is a vocal critic of offshore wind energy and has been engaged in a strategic political effort to derail New York’s offshore wind industry and the substantial economic opportunities it delivers,” the spokesperson stated by way of e mail.
“Staff of the Department of the Interior has obtained information that raises serious issues with respect to the project approvals for the Empire Wind Project,” Secretary of the Inside Doug Burgum wrote in a Wednesday letter to the Bureau of Ocean Power Administration.
“Approval for the project was rushed through by the prior administration without sufficient analysis or consultation,” he added.
Kramer is happy development has stopped, however added: “I think that we’d be even more elated if they said, ‘Well, we’re just going to put a full stop to them.’ ”
