Fishermen’s Energy is not giving up on its hopes to build a 25-megawatt offshore wind farm pilot project about three miles from Atlantic City.
The developer filed a motion of reconsideration with the New Jersey Board of Public Utilities on Tuesday, saying the agency’s decision last month to pull the plug on its project was “palpably incorrect or irrational . . . ’’ according to Chris Wisseman, Fishermen’s Energy chief executive officer.
The denial of the project, the first to come before the agency, is seen by its proponents and clean energy advocates as sending the wrong signal about the state’s commitment to developing offshore wind along the Jersey coast. The state’s Energy Master Plan calls for 1,100 megawatts of offshore wind capacity to be developed by 2020, a target unlikely to be met, given that not a single project has won approval from the BPU.
In rejecting the $188 million project, which had been under review for more than 1,000 days, the agency agreed with its staff that the project would be too costly to electricity customers, who would pay for the power the wind turbines generate. In addition, the board questioned the financial viability of the project.
Most of those assumptions were based on the company’s claim that costs to ratepayers would amount to $199 a megawatt hour, but hinged on the project receiving up to $100 million in subsidies from the federal government. The board’s staff calculated the cost at $263 a megawatt hour if those federal incentives were not forthcoming.
The decision to assess the project based on a $263 price is inappropriate, Wissemann said. He also said that the BPU’s argument that ratepayers would be forced to accept the risk if federal incentives were not granted was also inappropriate.
According to the company, Fishermen’s Energy has clearly accepted the risk of obtaining any and all incentives — and essential protection of ratepayers — that were required by the 2011 law aimed at creating a robust offshore wind industry. It has also gained support from the Division of Rate Counsel, the company noted.
“Approval of Fishermen’s project would provide an indication to the offshore wind industry, supply-chain vendors, bankers, investors, and other interested parties that New Jersey is serious about capturing the industry and creating jobs,’’ said Rhonda Jackson, the company’s communications director.
As a matter of policy, BPU does not comment on matters pending before the agency.
When the U.S. government proposed to offer leases to build offshore wind farms along the Jersey coast in federal waters, more than 10 developers expressed an interest in pursuing projects. Some experts say the Jersey coast offers some of the most ideal conditions for developing offshore wind farms because of its relatively shallow waters and abundant wind.
Beyond Fishermen’s Energy, the state’s efforts to develop offshore wind farms are basically at a standstill. The primary reason is that the BPU has never adopted rules that would award financial credits to offshore wind developers for the electricity their turbines produce. New Jersey electricity customers would pay for those credits.
The failure to do so has irked both legislators and clean energy advocates. Some think that Gov. Chris Christie’s presidential ambition may be a factor. Subsidies for offshore wind projects may prove troublesome among some conservative voters in a Republican primary.
In addition, the federal government has been slow to actually offer leases for offshore wind farms along the Jersey coast and has yet to expedite the permitting process for the projects.
The few other offshore wind projects that have been announced are much larger than the Fishermen’s Energy proposal; state officials say the economies of scale would make them much less of a burden on ratepayers.