A state appeals court has ordered New Jersey to reconsider its rejection of a pilot wind farm project off the coast of Atlantic City, in light of a $47-million federal grant the project was awarded.
The court’s decision breathes new life into the project, which could be the first offshore wind farm in the United States connected to the electric grid.
Fishermen’s Energy, a Cape May-based group of commercial fishermen, proposed building the five-turbine pilot wind farm about three miles off the coast to generate up to 25 megawatts of clean energy. But in March, the state Board of Public Utilities rejected the company’s financial plan, saying it would need state subsidies that would make the energy too costly for ratepayers.
The financial plan was based on the expectation Fishermen’s Energy would get $100 million in federal grants and tax breaks, but the BPU said there was no guarantee that would happen. It said that as a result, the state would have to supply energy credits to the company to make the project viable, increasing the cost of the energy produced. The BPU figured the energy would cost $263 per megawatt hour, instead of the $199 that the company had indicated.
Then, in May Fishermen’s Energy won a $47-million grant from the federal Department of Energy. The decision handed down by the Superior Court of New Jersey’s Appellate Division requires the BPU to reconsider its decision on the pilot wind farm in light of the federal grant.
The decision also said the BPU needed to consider the company’s estimate that the energy produced would be $199 per megawatt hour, not $263.
The BPU has 120 days to act. The agency declined to comment Monday, given that the proposal is now back in its hands.
“We are gratified by the court’s decision to remand the matter back to the BPU for further consideration,” said Mike Stein, a Fishermen’s Energy lawyer. “We fully expect that the BPU will now grant its application.”
If the BPU were to approve the project this time, Fishermen’s Energy could begin work onshore in 2015 and proceed with offshore construction in 2016, the company has said. Fishermen’s Energy has said it already has all the federal and state permits it needs to proceed with the project.
“It is time for the state government to fulfill the promise of offshore wind in New Jersey and launch the investment, the jobs and the economic development that is waiting to be unleashed, in Atlantic City and across the state,” said Paul Gallagher, the company’s chief operating officer.
A successful pilot could potentially entice wind industry contractors to set up in New Jersey, even opening factories to build the turbines locally, bringing more jobs to the state, the company has said.
The court decision comes a month after the Obama administration announced plans to sell leases for nearly 344,000 acres of seafloor off the New Jersey coastline to companies that want to build wind energy turbines. The federal government spent five years studying areas along the New Jersey coast that would be prime locations for wind farms. The area in question could support up to 3,400 megawatts of commercial generation, enough to power about 1.2 million homes.
Fishermen’s Energy has said it will likely bid for lease rights in federal waters off New Jersey’s coast to develop a larger project than the pilot project that was the subject of the court’s ruling.
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