A Google-backed effort to build a $5 billion undersea power line supporting wind energy from New Jersey to Virginia faces opposition from state officials and utilities.
The Maryland Public Service Commission and the National Rural Electric Cooperative Association are among those questioning Atlantic Wind Connection’s request that the Federal Energy Regulatory Commission approve incentives to build the project, including a guaranteed 13.58 percent return on equity for its development.
“They want consumers to pay for them to go through the planning process,” Jay Morrison, vice president for regulatory affairs at the cooperatives group based in Arlington, Va., said Tuesday.
The power line buried beneath the seafloor would serve as a 300-mile transmission backbone linking to wind turbines off the coasts of New Jersey, Delaware, Maryland and Virginia. Trans-Elect Development Co. LLC, an independent transmission company based in Bethesda, Md., announced the project in October.
Google spokesman Parag Chokshi said the Mountain View company has a 42 percent stake in the project. Investors also include Japanese trading company Marubeni Corp. and Good Energies, a Swiss clean-energy investment firm. The first phase, which could be operational as early as 2016, will cost about $1.3 billion, sponsors say.
The project’s sponsors have scheduled a briefing on its next development phase today at the law offices of Dewey & LeBoeuf LLP, Atlantic Wind’s attorneys, in Washington.
Atlantic Wind’s future depends on regulatory approval. The Energy Policy Act of 2005 ordered FERC to create incentive rates of return for transmission projects, considered on a case-by-case basis, in order to encourage investment. A transmission developer can apply for such treatment and separately seek approval for a rate formula that will determine the costs ultimately passed along to consumers.
In addition to the guaranteed rate of return on equity, the Atlantic Wind Connection is asking that all costs of the project’s construction be included in its rate base and that it be allowed to recover its costs if the project is canceled for reasons beyond the sponsors’ control.
The incentives sought “could well be overly generous,” the Maryland regulatory panel said in a Jan. 31 filing with FERC.
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