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was “ too expensive .” 11 Developers with projects selected by New York and New Jersey have approached the relevant regulators about renegotiating their OREC agreements to address the cost increases that they are experiencing . 12 Although pursuing different approaches , each developer cites macroeconomic forces that have eroded the financial assumptions underlying their existing OREC agreements and , in some cases , their inability to attract financing at the previously agreed prices .
In addition to securing clean power , these states have viewed offshore wind development as an opportunity to secure infrastructure , workforce development , and environmental-justice advancements for their state . Therefore , several factors may influence whether states will be willing to renegotiate these contracts .
Notably , New Jersey and New York ’ s most recent offshore wind solicitation included inflation adjustment mechanisms that allow for adjustments to the OREC agreement pricing based on set formulas and third-party indices . While these mechanisms will be important for future projects , most existing projects do not contain such adjustment provisions . Although offshore wind projects may be able to take advantage of new clean energy tax credits , most OREC agreements require all or a portion of any incremental tax benefits to flow back to the ratepayers of the state . Therefore , from a project economics standpoint , the direct benefit of these clean energy tax credits to some developers is limited .
11 . Press Release , Rhode Island Energy Not Moving Forward on Sole Bid Received in Most Recent Offshore Wind Solicitation ( July 18 , 2023 ) https :// news . pplweb . com / news-releases ? item = 137899 .
12 . See generally New York and New Jersey offshore wind solicitation websites , https :// www . nyserda . ny . gov / All-Programs / Offshore-Wind ; https :// njoffshorewind . com .