Despite winning federal grant, offshore wind project in N.J. is rejected again

Source: Elizabeth Harball, E&E reporter • Posted: Wednesday, November 26, 2014

The New Jersey Board of Utilities again opted to oppose construction of a pilot offshore wind project in waters near Atlantic City on Friday, saying the electricity produced will be too expensive, despite the millions in federal funding the project was awarded this spring.

“The project does not provide a net economic and environmental benefit to New Jersey ratepayers,” the BPU wrote in a document outlining its decision.

In a statement, Fishermen’s Energy LLC said the BPU’s action was “not fully unexpected” and that the company plans to continue its appeal in the New Jersey Superior Court’s Appellate Division.

Fishermen’s Energy is attempting to install a 5-turbine, 25-megawatt offshore wind farm in New Jersey state waters at a total cost of $188 million.

The project is fully permitted by state agencies, but in March, the BPU rejected Fishermen’s request to participate in the state’s offshore wind renewable energy certificate program, which would have obligated utilities to buy power from the project.

Part of the justification for the decision was the fact that the project had not yet secured a $47 million grant from the Department of Energy (ClimateWire, March 21).

But this May, DOE named Fishermen’s Energy one of three recipients of $47 million in federal funding (ClimateWire, May 8). Fishermen’s Energy then filed an appeal with the Superior Court of New Jersey, which in turn ordered the BPU to review its decision in light of the DOE award.

On Friday, the BPU concluded that the DOE award and other federal funding cited by Fishermen’s Energy in the project’s proposed cost is still not guaranteed, in part because the award is contingent on the board’s approval of the project by June 30.

“Even if the Board fully accepted [Fishermen’s Atlantic City Windfarm LLC]’s assertion that the $46.66 million was in fact received, it would not cure the lack of receipt of the other half of the federal subsidies in the amount of approximately $50 million from the [investment tax credit],” the board wrote.

The federal investment tax credit expired in 2013 and has not yet been reauthorized by Congress.

Fishermen’s prepares to fight or renegotiate

But Fishermen’s Energy maintains its proposed price of electricity is still viable.

“With our power price now a full 25 percent less than the price the BPU claimed was too high, we are confident that we will win the appeal and eventually build this project bringing hundreds of jobs, investment and other benefits to New Jersey,” the company said in a statement.

“Fishermen’s is open to getting there either through the appellate court process or by engaging with the new BPU leadership on a negotiated resolution.”

Speaking in support of Fishermen’s Energy, New Jersey environmental groups once again accused the BPU of making decisions based on New Jersey Gov. Chris Christie’s (R) politics rather than a fair review of the offshore wind project’s price.

“They’ve run out of excuses other than that it’s part of the governor’s national political ambitions,” said New Jersey Sierra Club Director Jeff Tittel. “This is in the same context of the governor also pulling out of the [Northeast’s Regional Greenhouse Gas Initiative], closing our office of climate change, all of the other things he’s done to run away from New Jersey’s commitments to the environment and green energy and green energy jobs.”

BPU spokesman Greg Reinert declined to comment for this article because the case is still pending in the Superior Court’s Appellate Division, he said.