New Jersey’s Board of Public Utilities (BPU) nixed a proposed offshore wind turbine project March 19, unanimously rejecting Cape May-based Fishermen’s Energy’s plan as too financially risky for ratepayers. Fishermen’s Energy had been waiting three years for the BPU to rule on the project.
Fishermen’s Energy, founded by a group of Cape May commercial fishermen, proposed to spend $188 million to build five turbines nearly three miles off of Atlantic City, creating 400 jobs and generating 25 megawatts of electricity. The Atlantic City Windfarm was considered a pilot project. Long-term plans called for 66 offshore turbines, generating enough power for 50,000 homes.
In rejecting the proposal, BPU commissioners said the agency still supports renewable energy, but agreed with their staff’s assessment that the project didn’t meet key standards of a four-year-old law, requiring projects to provide a net economic benefit to the state. The main point of contention was how much the project would cost ratepayers, who would help pay for the power the wind turbines produce. Those costs would be passed on to electricity consumers through credits to Fishermen’s Energy for the electricity generated.
The company claimed those costs would amount to $199 per megawatt hour, but that rate was dependent on it receiving up to $100 million in federal subsidies. The BPU’s staff questioned that aid, part of which was based on a federal tax investment credit, which expired at the end of 2013. Without the subsidies, the cost of credits to consumers would balloon to $263 a megawatt hour.
“It’s simply too high a price for ratepayers,’’ said BPU President Diane Solomon.
Paul Gallagher, Fishermen’s Energy’s Chief Operating Officer, disagreed in vain. “We’ll eat it if we don’t get it,’’ he said of the federal subsidies.
“The N.J. Board of Public Utilities simply has their facts wrong,” said Rhonda Jackson, director of communications and outreach for Fishermen’s Energy. “They based their rejection of the Fishermen’s Atlantic City Windfarm on the wrong power price. The price proposed by Fishermen’s Energy to the BPU is $199.17 per MWh. The BPU apparently evaluated the project with a price of power at $263 per MWh, a figure that is not supported by the record. Without that misstep the BPU vote should have led to a positive outcome.”
The plan had garnered support from a variety of groups. Atlantic City granted an easement to the project last year, and the Greater Atlantic City Chamber of Commerce and Atlantic County Board of Chosen Freeholders had also signed on. The New Jersey Division of Rate Counsel, which represents ratepayers, had initially opposed the project, but changed its mind after concluding that it would bring an estimated $150 million in construction, manufacturing, and investment dollars to the area.
New Jersey’s energy master plan calls for the development of 1,100MW of wind energy by 2020. Doug O’Malley, executive director of Environment New Jersey, characterized the BPU decision as “foolhardy.” “Gov. Christie said New Jersey would be an offshore wind leader, but this is a blow for offshore wind in the state,” O’Malley said. “We are quickly becoming a laggard on off-shore wind and we’re now watching other Atlantic coastal states moving ahead without us. It’s not a good harbinger for the long-delayed process at the BPU to move forward with New Jersey’s offshore wind program.”
Privately, some thought that there was a more political reason for the rejection. “It clearly seems the Christie administration has a vendetta against this project,” said O’Malley. He speculated that with Christie contemplating a presidential bid in 2016, approval of a clean energy project wouldn’t sit well with potential right-wing supporters.
On April 29, 2010, Fishermen’s Energy launched an environmental monitoring buoy into the waters near Atlantic City to gather data on wind and water conditions.
Fishermen’s Energy plans to appeal the BPU’s denial in New Jersey Appellate Court.
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