Feds Step In, Say They’ll Fund NJ Offshore Wind Pilot Up to $47 Million

Fishermen's Energy gets cold shoulder from state BPU, warm welcome from U.S. Department of Energy

Fishermen’s Energy yesterday received a $47 million federal grant to move forward with its pilot project to build a small offshore wind farm about three miles from Atlantic City — even though the project already has been rejected by regulators in New Jersey.

The grant from the U.S. Department of Energy is a key element in making the project financially viable. Proponents say the pilot could demonstrate offshore wind as a cleaner way of generating electricity in the future — one that also could create new jobs — and pave the way for more such projects in New Jersey.

The view was not shared by the New Jersey Board of Public Utilities, which has repeatedly refused to back the $188 million project, saying it would be too costly to utility customers who would foot much of the bill. They also questioned if the developer would ever receive the grant from the federal government it was seeking.

The failure of BPU to approve the project, which sought to build a 25-megawatt offshore wind farm, has been harshly criticized by clean-energy advocates who say the denial reflects a retreat from the Christie administration’s own Energy Master Plan and its recommendation that the state develop 1,100 megawatts of offshore wind capacity by 2020.

That goal is nowhere close to happening, given that Fishermen’s Energy’s Atlantic City Wind Farm is the first project to come before the BPU. While the regulatory agency called the project too costly, the New Jersey Division of Rate Counsel, which represents the interests of ratepayers, signed off on the project, largely because of grants from the federal government that would reduce costs to utility customers.

“This is a huge vote of confidence in the potential for offshore wind in New Jersey and the importance of the Fishermen’s Energy project in leading the way,’’ said Doug O’Malley, director of Environment New Jersey, referring to the grant. “The BPU’s decision to reject this project was based on the uncertainty of federal grants coming through. Despite the efforts of the BPU, the strengths of this pilot offshore wind project won out.

Greg Reinert, a spokesman for the BPU, declined to comment on the grant, noting that Fishermen’s Energy is appealing the agency’s decision to reject the project in the appellate division. “I cannot comment on matters pending before the court,’’ he said.

Fishermen’s Energy welcomed the grant.

“The selection by the DOE if an affirmation of the hard work and good planning over the last seven years by the Fishermen’s Energy team,’’ said Dan Cohen, chairman and founder of Fishermen’s Energy. “No other project in America is more prepared to put steel in the waters and this recognition by the DOE acknowledges that fact.’’

The project was one of three “pioneering’’ projects touted by the federal agency to receive $47 million in funding over the next four years to deploy innovative, grid-connected systems in federal and state waters by 2017.

The initial grant from the feds is $6.7 million. It could go as high as $47 million.

“Offshore wind offers a large, untapped energy resource for the United States that can create thousands of manufacturing, construction, and supply-chain jobs across the country and drive billions of dollars in local economic investment,’’ said Energy Secretary Ernest Moritz, in a press release issued by his office.

New Jersey has some of the most potential for developing offshore wind along the eastern seaboard, largely because of its relatively shallow coastal waters and abundant wind to drive turbines off shore, according to many developers.

In commenting on the grant, Jeff Tittel, director of the New Jersey Sierra Club, noted that while the federal government is trying to fund offshore wind, the state is rejecting the same proposal.

“While the rest of the country is moving forward with wind, Gov. (Chris) Christie continues to hold offshore wind hostage to his national political ambition,’’ Tittel said.

A factor in the slow development of offshore wind projects in New Jersey relates to the failure of the BPU to adopt a financing mechanism to promote those projects. Nearly four years after a law backed by both the Legislature and the Christie administration, the BPU has failed to figure out how to promote those projects with funds provided by ratepayers.

Some business interests welcome that impasse, saying offshore wind projects could spike utility bills in a state already saddled with some of the highest energy costs in the nation.