PSEG Long Island’s New Jersey-based parent will acquire 25% of an offshore wind farm being developed by the same Danish company that is working on two offshore projects to deliver energy to Long Island.
The parent company, Public Service Enterprise Group of Newark, said it will take a quarter stake in Ocean Wind, an 1,100-megawatt wind farm planned by Orsted for the waters of southern New Jersey. The project, to be completed by late 2024, will provide energy for New Jersey customers.
A company spokeswoman declined to speculate on how PSEG Long Island would keep at arms length in its dealings with Orsted, which, with partner Eversource, already has a contract for a 130-megawatt wind farm to power the South Fork. Owning and operating the electric grid while owning power generation assets such as a wind farm could present conflicts if the operator chooses its own power plants over rivals.
Orsted and Eversource also have a New York State contract to supply 880-megawatts of offshore wind power through the Long Island grid via a cable that will make landfall at Smith Point.
LIPA, in a statement, noted that it retains approval rights over "all power purchase agreements," including with Orsted's South Fork offshore wind farm.
"We carefully review PSEG’s potential and actual conflicts of interest on an ongoing basis," LIPA said. "In addition, we monitor the administration of interconnection processes to assure nondiscriminatory treatment of all applicants, which is also required by PSEG’s standards of conduct." PSEG Long Island operates the Long Island power grid under a contract with LIPA.
Public Service Enterprise Group CEO Ralph Izzo, in a statement last week, said the Orsted investment was "well-aligned with our company’s long-term clean-energy strategy."
When the parent company's interest in partnering with Orsted was announced just over a year ago, the company told Newsday it had "measures in place to observe separation protocols" between its work operating the Long Island grid and its wind-energy generation businesses.
A Public Service Enterprise Group spokeswoman didn’t comment on the latest partnership with Orsted beyond a news release. Previously, the parent company had said its partnerships with Orsted were not expected to extend to New York projects.
Regulated New York utilities are generally restricted from owning both transmission and distribution assets and generation facilities, but PSEG Long Island isn’t regulated by the Public Service Commission, and it doesn’t own Long Island grid assets. The PSC in a statement last year said the parent company's stake in Ocean Wind "would not be a factor for consideration since the generation project is in New Jersey, not New York."
PSEG Long Island has come under sharp criticism for its response to Tropical Storm Isaias. LIPA has been advised by the state Department of Public Service to consider terminating its contract, which expires in 2025.