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Proposed wind farm off Atlantic City coast stirs debate over costs 

Credit:  Andrew Maykuth, Inquirer Staff Writer | February 25, 2013 | www.philly.com ~~

How many tourists would travel to Atlantic City to view the nation’s first offshore wind farm?

Fishermen’s Energy, which has proposed building five giant turbines about 2.8 miles off the resort city’s beaches, estimates 4.5 million people a year would visit the site, according to a consultant’s report that recommends the state should turn down the project because it is too costly.

Fishermen’s Atlantic City Windfarm anticipates more visitors each year than the Baseball Hall of Fame in Cooperstown, N.Y., the Washington Monument, or the Museum of Modern Art in New York, according to a derisive analysis by Acadian Consulting Group that was commissioned by the New Jersey Division of Rate Counsel, the state’s ratepayer advocate.

The wind-energy developers are pushing back against the negative report and a second study done for the New Jersey Board of Public Utilities, which also concluded Fishermen’s economics were based on a lot wishful thinking. The BPU could determine the project’s fate in the next few months.

The consultants’ reports are “completely crap,” said Daniel Cohen, president of Fishermen’s Energy L.L.C. in Cape May. “There is a real move to try to kill our project.”

Cohen said the consultants were biased toward conventional fossil-fuel interests and underestimated the environmental, tourism, and employment benefits of the Fishermen’s wind project, which has strong support from South Jersey politicians.

“This is a chance to be a showcase,” said Cohen, who has homes in Cape May and Philadelphia. “Atlantic City will become a unique resort again. People will definitely come to see it.”

Fishermen’s Energy, formed by commercial fishermen such as Cohen, has faced stiff headwinds since the BPU selected its 25-megawatt proposal as a demonstration project.

The BPU must approve offshore renewable energy credits, which allow wind projects to collect a subsidy from ratepayers for power generated. The funding mechanism is a key component of the state’s 2010 Offshore Wind and Economic Development Act, which calls for supporting the development of 1,100 megawatts of offshore power generation.

Fishermen’s first proposal in 2011 came under fire from the consultants, and it resubmitted its application in 2012. The reviews from the consultants were still negative.

The project’s Chinese turbines would be within the three-mile limit on state waters, so Fishermen’s would avoid the protracted review that large utility-scale wind farms must undergo in federal waters, where the U.S. Interior Department is considering leasing vast tracts for wind generation. Eleven developers have expressed interest in building wind farms off the Jersey coast.

The BPU is still struggling to approve a method for granting the offshore renewable energy credits, which guarantee a subsidized price for power.

“We could start construction tomorrow,” Cohen said. “All we’re missing is a price.”

The tourism projections are important because under state law, the wind project needs to demonstrate a net economic benefit to the state to justify the price subsidies.

Stefanie Brand, the rate counsel, expressed doubt the windmills would attract large numbers of tourists.

“You might get one or two more clean-energy conferences in Atlantic City, but I don’t think you’re going to see the type of tourism they’re predicting,” she said.

She also dismissed accusations of bias against the consultant, noting that Acadian’s conclusions were the same as those reached by the BPU’s economic analysts, Boston Pacific Inc. “So is it that everybody’s biased, or is the problem with the application?” Brand asked.

Much of the proposal’s anticipated costs and benefits are concealed in confidential documents submitted to the BPU. But Cohen said that even if the project does not generate any of the $410 million in tourism benefits expected over its 20-year life, the wind project would still meet the net-benefit threshold.

Acadian, the Louisiana consultant the rate counsel hired, estimates the Fishermen’s project would cost $282.2 million over 20 years, including operation and maintenance costs, and would generate only $74.2 million in revenue. It would require $208 million in subsidies from ratepayers.

Cohen said that because the project was relatively small it would raise the typical residential bill by $1.63 a year. He also noted that the U.S. Department of Energy, which evaluated the proposal last year, gave Fishermen’s a $4 million grant in December.

“I think if anyone measures us on pure merit, we should be built,” he said.

Fishermen’s supporters say the project is worth the costs.

“If we are serious about wind, we need to do a pilot project,” said Upendra Chivukula, the General Assembly’s deputy speaker. “If we are not serious about wind, we can drag our feet and say this is not cost-effective.”

Source:  Andrew Maykuth, Inquirer Staff Writer | February 25, 2013 | www.philly.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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