At $200M, Fishermen's Energy Pilot Wind Farm Still Too Pricey for Rate Counsel
Developer says it can deliver 'Holy Grail' of offshore wind, a manufacturer willing to locate assembly plant in Garden State.
It could cost utility customers as much as $200 million to build a pilot project to demonstrate the viability of offshore wind farms along the Jersey coast, according to the New Jersey Division of Rate Counsel.
In anin Philadelphia on the station’s Radio Times show, Stefanie Brand, director of the division, yesterday said the pilot project nearly three miles off Atlantic City, is still opposed by her office. “It’s just too expensive,’’ she said.
The Fishermen’s Energy Atlantic City wind farm, the first offshore wind project to be considered by state regulators, is seeking approval to build five wind turbines off the resort city. The farm would be capable of producing 25 megawatts of clean electricity, a payload that advocates say could jump-start efforts to build a robust offshore wind industry in the Garden State.
To make that goal more achievable, the chief executive officer of Fishermen’s Energy said on the same program that the main financier behind the project, XEMC, a China-based wind turbine manufacturer, has agreed in writing to build an assembly plant in New Jersey if the project is approved. That pledge is contingent on the state going ahead with a plan to award ratepayer subsidies to XEMC or another developer for the electricity produced by wind turbines located at least 16 miles off shore.
“This commitment is the ‘holy grail’ of offshore wind economic development in New Jersey,’’ Chris Wissemann of Fishermen’s Energy said in a phone interview with NJ Spotlight after the show. The manufacturing facility for wind turbines is expected to be located in a port in Paulsboro in South Jersey.
Building a strong new manufacturing base of green industry jobs is the driving force behind New Jersey’s goal of developing 1,100 megawatts of offshore wind capacity. To lure a manufacturer, the state is offering up to $100 million in tax credits if it sets up shop in New Jersey.
Those efforts, however, have been stalled by recurring delays on both the state and federal levels to come up with a workable financing mechanism to spur investment by Wall Street and other investors and offer leases by the U.S. Department of Interior.
If the small pilot project moves forward, it would deliver substantial economic benefits to New Jersey, Wissemann told Marty Moss-Coane, host of the WHYY program. He said it would create 250 jobs and at least $100 million in direct economic benefits, merely from the construction of the pilot wind farm.
“What’s unique here are the benefits of offshore wind are really substantial, and not just environmental," Wissemann said. “There’s probably no better place to showcase a wind farm than off of Atlantic City,’’ the executive said.
Brand, appearing after Wissemann, said even though it’s only a pilot project, it still could cost New Jersey ratepayers $200 million over two decades. The project would supply enough electricity to supply 20,000 customers, according to Wissemann.
The projected costs also have raised alarm among business groups, which have consistently pressed the Christie administration to find ways to lower energy bills in New Jersey, a state consistently ranking in the top ten when it comes to the highest costs of electricity.
Other proposed offshore wind projects in New Jersey, located at least 16 miles or further off the coast, are much larger in scale, ranging up to more than 300 megawatts in capacity and with price tags expected to run at least $1 billion or more.
“There’s a lot of people trying to get money from ratepayers,’’ Brand said during the radio interview, citing projected $5 billion in costs to achieve the state’s aggressive solar energy goals, and another $4 billion from an utility (Public Service Electric & Gas) to harden its infrastructure.
Brand said her office supports the development of offshore wind in New Jersey, adding she hopes the projects in federal waters farther off the coast will prove more economically viable than the pilot project.
“We think the statute is working [the Offshore Wind Development Act signed by Gov. Chris Christie in 2010]. It’s just the state has stood its ground,’’ she said.
With Fishermen’s Energy submitting a filing late Friday, Brand said her office has not yet had an opportunity to fully examine it. However, she said the fact that the project is being financed by a Chinese company raises questions it needs to resolve since it is not subject to the same accounting principles as U.S. companies. Further, it does not have to file with the Securities and Exchange Commission.
In its filing, Fishermen’s Energy argues that it can demonstrate that its project delivers more than $250 million in economic benefits, exceeding the costs to ratepayers.
Jeff Tittel, director of the New Jersey chapter of the Sierra Club, disputed that view. “It’s a good start,’’ he said. “If we can’t get a smaller project off the ground, how are we going to get to the bigger projects?’’