The billion-dollar bailout of Ørsted. It’s one of those political talking points that sounds great — and is meant to inflame — but doesn’t hold water.
Numerous politicians, in an effort this week to convince residents/voters that the state’s offshore wind program is a financial disaster, have mentioned the “billion-dollar bailout” that the Legislature and Gov. Phil Murphy supposedly gave Ørsted earlier this year.
Now, to be fair, there are plenty of financial reasons why offshore wind and much of the governor’s well-intentioned push for more clean energy programs are struggling.
Plenty.
But to suggest the state gave Ørsted a billion dollars is not accurate. It’s a falsehood.
Here’s the truth: The Legislature passed a bill that would allow Ørsted to take full advantage of federal (not state) incentives, which had increased since the time (pre-pandemic) that Ørsted made its agreement with the state.
It was an effort to help make the project work in the post-pandemic financial world. And it’s the same incentive package that every offshore wind company in every state is eligible to receive today. It’s not a special deal.
Essentially, it was allowing someone to go back to the store to get the sale price after they had purchased the item.
But, here’s where it is different: Ørsted never got a penny from the legislation.
As is the case with incentives, payoffs only come on completed work and revenue. That’s not going to happen. (It’s the same reason the Revel casino never got a penny of a potential $261 million incentive package from the state.)
Wait, it gets better.
In order to be eligible for these increased federal incentives, Ørsted had to agree to do deals that will result in the state getting $300 million in actual dollars — $200 million of which already is in an escrow account. Will those opposed to this billion-dollar bailout push to give that money back?
We asked Declan O’Scanlon, the state senator from the Monmouth County who is known as a straight shooter who keeps the administration honest (which is a good thing), about the “billion-dollar bailout” talking point.
He insisted that’s not coming from him. He said he understands their incentive was the same as the incentives that were never paid to casinos.
“You haven’t heard me say that,” he said. “They were not handed a billion-dollar check — and I’ve made that clear to several people over the last week. It’s not like we lost a billion dollars. I know some people are being misleading about that, but I haven’t been.”
That being said, O’Scanlon did back up the premise, just a bit.
“Let’s say Ørsted was still in the game — we were going to give them rebates that were intended to be given to ratepayers,” he said. “Over time, that’s going to come out of the ratepayers’ pocket.”
Calling it a billion-dollar bailout still isn’t fair.
You want to criticize the governor’s Energy Master Plan — saying the state won’t have the infrastructure necessary to match his ambition electric vehicle goals, or the lack of transparency about the incredible costs associated with the electrification of commercial and residential buildings — have at it.
It’s good government. Healthy debate. The essence of a two-party system.
But, to suggest the state gave Ørsted a billion-dollar buyout is just not true. And to have it come with a hint of xenophobia — some painted Ørsted as a “foreign” company — was tough. And an unfair description in a state that gets so much of its identity and economic muscle because it has been so welcoming to international residents and companies, going back to Ellis Island.
We can agree to disagree politically. And we should. But let’s try to debate with facts, not fiction. And start by talking about the money the state did get from the legislation involving Ørsted.
