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Our view: N.J. consumers should watch out for wind-energy subsidies
Credit: The Press of Atlantic City | December 31, 2015 | www.pressofatlanticcity.com ~~
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Translate: FROM English | TO English
The latest push by the state Legislature for a tiny wind-energy demonstration project off Atlantic City abandons some bad-government practices but raises new suspicions.
The bill, passed in the year-end legislation rush, was amended to drop a couple of egregious and arrogant provisions that were opposed by this newspaper in the spring.
The original bill sought to eliminate a Board of Public Utilities cost/benefit review of the project. It also would have ordered the BPU to approve a wind project “offshore of a municipality in which casino gaming is authorized” – effectively usurping the board’s legal authority to consider the interests of the state and its consumers.
On the face of it, the amended and passed bill would only open a 30-day window for Cape May-based Fishermen’s Energy to submit a reworked proposal for the windmills (if it’s signed by Gov. Chris Christie).
That firm’s prior proposal for five wind turbines was twice rejected by the BPU for failing to yield enough benefit to justify its costs to ratepayers, which it estimated at $240 million over 20 years, according to Law360.
While legislators were trying to put in the fix for its project, Fishermen’s Energy asked the courts to invalidate the BPU’s analysis. The Appellate Division of Superior Court rejected its claims, and in November the state Supreme Court let that verdict stand.
The latest action by the Legislature means electricity customers in the state need to pay attention to the new Fishermen’s Energy proposal to see if it would result in higher monthly bills.
So far Fishermen’s Energy has characterized its proposal as a “demonstration project,” but wind energy is a mature technology already deployed widely around the world. It already provides more than 4 percent of U.S. electricity, so how it works no longer needs to be demonstrated.
It’s possible, however, that the firm and its supporting politicians view it as demonstrating how subsidies paid by New Jersey consumers can fund politically arranged deals for massive wind-energy projects in the Atlantic Ocean.
In November, the federal government auctioned the rights to produce as much as 3,400 megawatts off New Jersey to corporations from Italy and Britain. Such projects only make economic sense for those corporations if state government delivers subsidies paid by either consumers or taxpayers.
The Fishermen’s Energy project (so far) would produce a paltry 25 megawatts of power – but could be seen as a model for providing massive subsidies later for wind power.
There is an actual wind-energy demonstration project in Atlantic City, also with five wind turbines. The Atlantic County Utilities Authority pays 7.85 cents per kilowatt hour for electricity from them, less than Atlantic City Electric’s comparable price of 10.32 cents. That suggests the need for subsidies may be exaggerated.
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