Cape May County, NJ ends litigation over defeated Orsted wind project

The County of Cape May obtained orders over the past week ending state and federal litigation connected to the defunct Orsted Ocean Wind One offshore wind project.

On October 31, 2023, the Danish offshore wind company Orsted announced that it was abandoning its Ocean Wind One project immediately off the coast of Cape May County. Orsted then spent nearly a year negotiating with the State of New Jersey for the return of $300 million Orsted had paid into escrow with the New Jersey Board of Public Utilities (“NJBPU”).

In or about July 2024, the state agreed to return $175 million to Orsted but required Orsted to have the NJBPU vacate its orders granting Orsted the right to construct both the Ocean Wind One and Ocean Wind Two offshore wind projects off of Cape May County. On August 14, 2024, NJBPU vacated those orders. Consequently, the Office of the New Jersey Attorney General (“AG”), in a brief to the Appellate Division of the New Jersey Superior Court, determined that these were no longer Qualified Offshore Wind Projects. The AG also determined that Orsted had fully abandoned the projects and that the projects no longer have authorization to, and cannot, proceed.

In connection with the County’s federal lawsuit against the Bureau of Ocean Energy Management and other federal agencies, Cape May County was joined by the Cape May County Chamber of Commerce, Clean Ocean Action, Garden State Seafood, Greater Wildwood Hotel and Motel Association, Lamonica Foods, LLC, Lunds Fisheries and Surfside Seafood Products, LLC, as plaintiffs. The Department of Justice admitted that the cancellation of the New Jersey Board of Public Utilities easements and permit precludes the construction of the projects.

Orsted joined in the motions to dismiss, essentially admitting that the projects will never be built.

The County of Cape May agreed to the dismissal of the federal appeal as well as the appeal from the actions of NJBPU and its challenge of Orsted’s right to file easements taken from the County since it is clear that Orsted has fully abandoned the projects and has no intention of ever constructing them. While Orsted retains the lease areas, the Bureau of Ocean Energy Management has suspended the Ocean One lease area for three years. There are no current plans by any offshore wind developer for the use of the lease areas. Orsted has also indicated that it intends to abandon its Skipjack project that was planned for an area off the coast of Delaware and would have been visible from the southern end of Cape May County.

“In the end, thanks to the efforts of the County of Cape May, its litigation partners, courageous elected officials, and dedicated grassroots activists, the threat that the Orsted projects posed to the people and businesses of Cape May County have been stopped,” said Cape May County Commission Director Len Desiderio. “By Orsted’s own calculation, Cape May County was facing a loss of over $1 billion in tourism revenue. Our fisheries industry was facing millions of dollars in losses. Marine mammals and other sea life were threatened with injury and harassment. After what we saw last summer in Nantucket where beaches were closed in July due to the disintegration of a single turbine blade, we should thank God that we were able to play a role in stopping the Orsted projects.”

Former New Jersey Superior Court Judge Michael J. Donohue, who has served as the County’s Special Counsel for Offshore Wind and managed the County’s offshore wind opposition strategy said, “We reached a point where Orsted, the Department of Justice on behalf of federal agencies and the New Jersey Attorney General on behalf of NJBPU all admitted in court filings that Orsted’s Ocean Wind One offshore wind project is dead and will not be coming back to life.

Orsted has also told its investors that it is abandoning its Ocean Wind Two and Skipjack projects off of our coast. The Orsted CEO told reporters that there were ‘a couple of local construction permits that turned out to be more challenging and a bigger risk for the project than assumed.’ This is a clear admission that the actions of the County and its litigation partners as well as the efforts of grassroots activists posed too big a risk for Orsted as it struggled with negative economic forces. There is no doubt that Commissioner Desiderio’s leadership of the Board of Commissioners in opposing Orsted and offshore wind was the pivotal element to our success in stopping the economic and environmental devastation that these projects would have wrought.”