Federal government revokes $716M loan assurance for New Jersey utility under Biden administration
The Department of Energy's Loan Programs Office has announced the cancellation of a $716 million loan commitment for the New Jersey Clean Energy Corridor, an upgrade project aimed at providing electricity for approximately 1.6 million homes annually. This decision marks one of several reversals of commitments made under the prior administration, but it is not exclusively related to offshore wind projects.
The utility, Jersey Central Power & Light, is a subsidiary of FirstEnergy, but the New Jersey Clean Energy Corridor is not a part of the loan guarantee offered to the utility. The company that initially attempted to secure access to the loan opportunity was Invenergy.
The withdrawal of the $716 million commitment does not necessarily signify a halt in offshore wind development, as it was not related to that specific project. It is important to note that the administration's increased efforts to hinder offshore wind development do not directly affect the New Jersey Clean Energy Corridor, as it is not an offshore wind project.
In the waning days of the Biden administration, the loan office committed a total of $22.92 billion for utility projects across the country. The New Jersey Clean Energy Corridor was not among these projects. The cancelled commitment was intended for the improvement of transmission infrastructure, not for a utility or offshore wind assets.
The cancellation of the $716 million commitment to the New Jersey Clean Energy Corridor does not necessarily indicate a broader policy shift against clean energy infrastructure projects. It is one of several reversals of commitments made under the prior administration.
The loan would have helped connect planned offshore wind assets to the grid, but the cancellation does not affect the development of these assets directly. The New Jersey Clean Energy Corridor, if funded, would have played a crucial role in the state's clean energy future, but its future remains uncertain following the cancellation of the loan commitment.
