Fine Print: Staying Ahead of the Latest Developments in Offshore Wind

Federal grant to Fishermen’s Energy pilot project could breathe new life into proposal

Recent developments: In August, an appellate court ordered the New Jersey Board of Public Utilities to reconsider its rejection of the three-year-old proposal by Fishermen’s Energy, which aims to build a 25-megawatt offshore wind farm about three miles from the coast of Atlantic City. The court directed the BPU to reconsider the decision, which was made before the U.S. Department of Energy awarded the project a $47 million grant.

What happens next: The court gave the state agency until December 6 to reconsider its decision. According to a procedural schedule established by the BPU, it could make a decision on the project — the first and only offshore wind farm to come before the agency– at its regularly scheduled monthly meeting on November 21.

Why the case is attracting attention: Both the Christie administration and legislators have promoted offshore wind farms as a way to produce cleaner electricity, hoping to develop at least 1,100 megawatts of power from them. No project has moved forward, leading many to question how serious is the state’s commitment to offshore wind, once viewed as way to spur economic growth in a new green economy.

What hasn’t happened: Four years this past August after the Legislature and governor approved an aggressive program to promote offshore wind, the Christie administration has yet to adopt crucial regulations to make that possible. The law would have allowed offshore wind developers to collect credits — to be paid by utility customers — to help finance their projects. Without the subsidies, developers say offshore wind will never happen in New Jersey.

Why the Fishermen’s Energy project hasn’t moved forward: In rejecting the project, described by its backers as a pilot to demonstrate the feasibility of offshore wind in New Jersey, the BPU concluded the proposal would be too costly to ratepayers. The court disagreed, saying the agency failed to incorporate the effect of the $47 million federal grant into its calculations.

Why the project is controversial: Its backers say it is important to develop cleaner sources of energy in New Jersey, which has suffered from various air pollution problems for years. Its detractors, many in the business community, fear it will drive up already high energy costs in the state at a time when cheap natural gas is lowering costs to consumers and businesses.

What’s likely to happen: Unclear. The New Jersey Division of Rate Counsel originally opposed the project, but gave its support once the federal grant was included, saying the pilot would meet a stiff threshold for creating net economic benefits for the state. Whether the BPU will buy into that argument is unclear — given how many believe the project has become a political football now that there’s a chance that Gov. Chris Christie may enter the Republican presidential primary. Many conservatives oppose any subsidies for renewable energy projects.