Reclassifying Proposal as Pilot Project Could Help Offshore Wind Get Under Way

Tom Johnson | February 7, 2013 | Energy & Environment
Assembly committee looks to amend bill, let wind farm move ahead despite concerns about projected cost

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The state’s first proposed offshore wind farm three miles from Atlantic City isn’t winning many plaudits from New Jersey’s regulators, but it could receive an unexpected boost from legislators.

Two consultants hired by the New Jersey Board of Public Utilities and the state Division of Rate Counsel panned the Fishermen’s Energy Atlantic City wind farm project, both saying it fails to provide enough economic benefit to the state to win approval from the BPU.

But today, the Assembly Telecommunications and Utilities Committee, may amend a bill (A-1384) to reclassify the proposed project as a pilot project, a designation that may allow it to move forward, despite questions about projected costs, according to the chairman of the committee.

Assemblyman Upendra Chivukula (D-Somerset) — a proponent of offshore wind farms — said yesterday that he believes it is important for the state to develop an offshore pilot to demonstrate that the technology can be successfully deployed along the Jersey coast.

Chris Wissemann, chief executive officer of Fishermen’s agreed, saying that every country that has developed large-scale offshore wind farms began by first building small pilot projects.

Even without the legislative boost, Wissemann said his project could clear the so-called net economics benefit, if only the BPU consultants “actually look at it.’’ The proposal, which won a $4 million grant from the federal government in December, is now the “most cost-effective offshore wind project,’’ according to Wissemann.

The Fishermen’s Energy project is the first of several proposals to locate offshore wind farms along the Jersey Shore. That goal is supported by the state’s Energy Master Plan, but the lengthy permitting process at both the state and federal levels has slowed progress to a crawl.

The state hopes to develop 1,100 megawatts of offshore wind capacity by 2020.

The Fishermen’s Energy project, unlike other undertakings, would be located in coastal waters. Its developers have always described it as a pilot. The scheme involves five wind turbines capable of producing 25 megawatts of electricity, much smaller than other projects, would be located 16 miles or farther offshore.

If the pilot proves feasible, Fishermen’s Energy plans to build a utility-scale project in federal waters that will generate approximately 330 megawatts.

Chivukula said the pilot project is crucial to determining whether the state goes ahead with offshore wind projects. He and other Democrats in the Legislature have grown increasingly critical of the Christie administration’s efforts to make offshore wind happen.

That frustration surfaced again last month at a hearing of the Senate Oversight Committee, when several people suggested the state’s failure to move forward is jeopardizing its chances of becoming the hub of an offshore wind industry based in New Jersey.

The delays have been so extensive the Legislature also may have to amend a key aspect of the law designed to foster a new green industry in the state. The measure specifies a $100 million tax credit to an offshore wind manufacturer that sets up shop in New Jersey — but developers must submit an application by January 1, 2013.

Most of the blame for the failure to move forward with offshore wind focused on the BPU’s inability to adopt rules governing how offshore wind developers will earn revenue from the electricity their turbines produce. (At present, no offshore wind farms have been built in the United States.)

In December, a consultant retained by the state agency came up with a proposal to help offshore wind developers protect the money they earn from ratepayers. The agency also maintains it is well ahead of the federal government’s efforts to award leases for offshore wind tracts.