Blumenthal calls for federal tax credit help to curb costs of offshore wind
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Oct. 6—HARTFORD — U.S. Sen. Richard Blumenthal on Friday called for the U.S. Department of the Treasury to release guidelines on available tax credits that could make offshore wind development more affordable.
Blumenthal joined with offshore wind advocates for a news conference in Hartford calling the federal Offshore Wind Investment Tax Credit program an essential part of providing support for an industry struggling with increasing costs and partners backing out of power contracts with states along the East Coast.
The program, Blumenthal said, can provide a 30% tax credit on portions of offshore wind development but is not being used because the government has not issued updated guidelines on what parts of the project are eligible.
"The holdup seems to be bureaucratic rigamarole and red tape," Blumenthal said. "IRS regulations are not always simple and straightforward but this one ought to be."
Blumenthal said he and his colleagues in the Senate have written directly to U.S. Secretary of the Treasury Janet Yellen to urge a quick resolution. Blumenthal said the tax credit program, when combined with other federal incentives, such as the Inflation Reduction Act's Energy Communities Credit, will make the offshore wind projects more financially feasible.
Blumenthal's announcement came in the same week that Avangrid, developer for what would have been the state's largest offshore wind farm, terminated its contract to supply the power to the state because of increased costs to build the wind farm.
"In no way is their withdrawing from their agreement a challenge to the basic need for offshore wind development. It's part of Connecticut's future," Blumenthal said.
Gov. Ned Lamont, reacting to the loss of the Avangrid contract this week, announced a new multi-state agreement with Massachusetts and Rhode Island to work together to solicit new offshore wind project proposals.
"Offshore wind is part of our future despite the obstacles we are seeing right now. They are short-term obstacles," Blumenthal said.
Charles J. Rothenberger, climate and energy attorney for the nonprofit Save the Sound, said the economic woes hitting the offshore wind industry should not be a reason to give up on renewable energy.
"Given the unprecedented conditions that these projects are facing, I would hate for anybody to walk away with the impression that somehow these projects can't be successful," Rothenberger said.
He said the long-term trends for renewable energy projects are that they become increasingly more affordable.
"It's clear we can't meet our clean energy or climate goals without (offshore wind)," Rothenberger said. "The fear is we'll start looking at quicker and cheaper solutions."
Aziz Dehkan, executive director of the Connecticut Roundtable on Climate & Jobs, said the delay has been frustrating and stymied a transition from fossil fuel jobs to renewable jobs.
"It's frustrating to all of us as we try to build a better Connecticut and a cleaner Connecticut," Dehkan said.
