By Assemblyman Alex Sauickie
Energy bill payers ought to soon be receiving notes in the mail saying “mange tak” or words to that effect. But don’t hold your breath.
“Mange tak” means “thank you very much” in Danish. In case you’re wondering why I’m writing about that, it’s because you’ve been very generous to some Danish folks lately, like it or not, thanks to legislation passed recently and signed by Governor Murphy.
Ørsted, a Danish company preparing to build nearly 100 windmills in the ocean off the coast of Atlantic City and Ocean City, is the beneficiary of the legislation. Its project known as Ocean Wind 1 is the only one eligible under the bill.
Before the bill became law, Ørsted and other companies filing certain documents with the state related to providing wind energy had to commit to pass along tax credits or other governmental benefits to ratepayers, when those benefits are greater than projected.
The new law says that only Ørsted now can keep those unexpected benefits, rather than pass them along to residents who pay utility bills. The company can keep money meant for you to help keep down the cost of living in New Jersey.
You may be wondering how much of this ratepayer money will be kept by the company, under this law that critics are calling a bailout. If you go online to read the nonpartisan fiscal analysis of the bill, you’ll still be wondering. The public finance experts who wrote the analysis say the information they need to figure that out is redacted – blacked out – in the public copy of one of the company’s filings.
Ørsted estimates the value to a ratepayer would be 20 cents per month, or $2.40 a year, according to the Associated Press. The company didn’t give an estimate of the overall value to itself, but some other legislators have placed it at about a billion dollars.
I certainly don’t know anything about Ørsted’s cash flow, which might provide some insight into why the company wants this money. But there’s a website called companiesmarketcap.com that, unsurprisingly, reports on the market capitalization of companies. The website explains, “market capitalization, commonly called market cap, is the total market value of a publicly traded company’s outstanding shares and is commonly used to measure how much a company is worth.”
The site says that, as of July 2023, Ørsted has a market cap of $37.83 billion. “This makes Ørsted the world’s 475th most valuable company by market cap according to our data,” the site helpfully notes.
The state should have an office dedicated to looking out for the average ratepayer and advising the Legislature – and it does, but the Legislature doesn’t always listen. The office used to be called the Ratepayer Advocate, but now it’s called the Division of Rate Counsel. The head of that office wrote to the Legislature to ask that the bill not pass, and to make two main points about it: the bill will result in ratepayers paying more, and the company will get a double benefit from the bill.
The first benefit is easy to understand. As mentioned above, the company will now be keeping unexpected tax credits (as well as other financial benefits not available at the time of application), lowering the company’s costs. The second benefit is more complicated: wind energy providers get certain credits from the state, paid for by ratepayers. In calculating those credits, unexpected tax benefits normally lower their value, making them less expensive for ratepayers. Because the bill allows Ørsted to keep those unexpected benefits instead of passing them along to lower costs for ratepayers, the company will also benefit from bigger state credits at the cost of consumers.
Of course, when another major offshore wind developer called Atlantic Shores heard about this big benefit for Ørsted, it wanted some help, too. It now says its own project is at risk without additional government assistance.
What a surprise. I joined 29 of my colleagues in voting against the bill. Those who voted yes are throwing ratepayers’ money in the air and watching it blow away in the wind.
Alex Sauickie is a life-long Jackson resident who represents his home town and 13 other towns in the State Assembly. Follow him on Facebook (/AssemblymanAlex) and on Instagram (@AssemblymanAlex), or visit his website at AssemblymanAlex.com.
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Note: This opinion piece originally appeared in The Jackson Times by Jersey Shore Online in its publication dated July 22, 2023.