After Dropping NJ Offshore Wind Farms, Orsted Wants Out Of $300M Deal

OCEAN CITY, NJ — An agreement between New Jersey and Danish offshore wind developer Orsted meant that the company owed $300 million if their projects failed to proceed. And now that Orsted has canned Ocean Wind 1 and 2, the company is trying to get out of the agreement.

The announcement that the projects were being abandoned on Oct. 31 drew both praise and criticism, with Gov. Phil Murphy calling it "outrageous."

"I have directed my Administration to review all legal rights and remedies and to take all necessary steps to ensure that Orsted fully and immediately honors its obligations," Murphy said at the time, referring to the agreement to pay $300 million. Read more: 'Outrageous': Murphy Slams Offshore Wind Abandonment In NJ

The day after the announcement, Orsted wrote to the New Jersey Board of Public Utilities, saying it was withdrawing from their agreement, the Associated Press reported.

Their reasoning was that their board had not taken final action to approve the agreement.

The BPU told the Associated Press that it approved an escrow agreement with Orsted on Sept. 27, and a guarantee agreement on Oct. 11.

"We withdrew our filings because we are no longer developing Ocean Wind I and thus are no longer pursuing the tax incentives related to the project," Orsted told the Associated Press.

Orsted said it has transferred $200 million to an escrow account with the state so far.

It's not clear what will happen next. Orsted and New Jersey, in the agreement, said they would not sue each other unless negotiations fail.