Fishermen’s Energy of Cape May’s bid to build America’s first offshore wind farm suffered a second setback in as many months with a report questioning the financial benefits to New Jersey electricity customers and residents.
The New Jersey Board of Public Utilities, or BPU, commissioned the report, which suggested the higher price of offshore wind would lead to fewer jobs in the state. Consultants Boston Pacific Co. Inc., of Washington, D.C., and OutSmart BV, of the Netherlands, co-authored the 44-page analysis.
Fishermen’s Energy of Cape May proposes to build a 25-megawatt wind farm about 2.8 miles off Atlantic City. The company is asking the BPU to approve the project.
The consultants said the company failed to demonstrate the project’s environmental and financial benefits to New Jersey residents and electricity customers. The report said underlying assumptions in the company’s cost-benefit analysis were “not adequately substantiated.”
The BPU report follows another analysis drafted on behalf of the state Division of Rate Counsel that drew even more dire conclusions about offshore wind’s impact on the state’s economy. That report, written on behalf of the state’s electricity customers, said Fishermen’s Energy’s heavily subsidized wind turbines would cost the state’s economy nearly $1 billion and 29,661 lost jobs while raising electricity rates by $286 million.
The latest report, released in heavily redacted form Feb. 22, questioned the conclusions Fishermen’s Energy drew from a tourism survey. The consultants questioned how the project would translate into increased visitation and how much more the new tourists would spend.
Most of the numbers, figures and sources cited in the report were blacked out, presumably to protect Fishermen’s Energy’s business plan from its competitors.
Chris Wissemann, CEO of Fishermen’s Energy, said the BPU solicited additional information that his company will provide. He said the dialogue is to be expected in the creation of a new industry.
“We failed to articulate the benefits properly in our original submission,” he said. “That’s now really clear. So what we’re doing is we’ve retained a host of experts to work with us to better make the case for how this project benefits New Jersey.”
Wissemann said the initial analysis did not take several things into consideration, such as the company’s plans to offer tourism excursions out of Atlantic City to see the turbines. The nearby Atlantic County Municipal Utilities Authority regularly offers tours of its wind farm off Route 30.
The company plans to build service vessels in New Jersey to maintain the turbines along with a new tour boat to ferry passengers to the site.
Wissemann sees some urgency in approving the pilot project if New Jersey is to attract would-be manufacturers to cater to wind farms up and down the East Coast and the Gulf of Mexico.
“There is a once-in-a-generation race to become host to an industry,” he said. “The infrastructure coalesces around where the projects are. Every year it’s delayed gives other states a chance to catch up and pass us.”
Environmental groups said the report exaggerated the financial risks. And the report seemed to ignore the added monetary benefits of having cleaner air, said Jeff Tittel, spokesman for the New Jersey chapter of the Sierra Club.
“We’ll be challenging a lot of assumptions contained in that report,” he said.
“With wind and other renewable energy, there is a higher cost of installation, but it gets cheaper over time. Your operation and maintenance costs are lower,” he said. “You don’t have to buy fuel, which costs you every day. And with nuclear power plants, you need armed guards.”
The Sierra Club will perform its own financial analysis, he said.
“This whole assertion that this small project is going to cause consumers to spend less and cause businesses to lay off employees is just ridiculous,” said Matt Elliott, a spokesman for Environment New Jersey. “If the Christie administration is going to hold offshore wind to this extreme level of scrutiny, fine. But apply the same metric to every other source of energy in the state, especially when the administration is talking about spending untold millions of dollars on new natural gas plants.”
Fishermen’s Energy will be submitting additional documentation to make its case for why offshore wind is a good investment in New Jersey, Wissemann said.
“It’s clear from my perspective based on the work we’ve done that we’ll show this project passes the net-positive benefits test with flying colors,” he said.