Environmental groups see politics in rejection of N.J. offshore wind project

Source: Elizabeth Harball, E&E reporter • Posted: Monday, March 24, 2014

The rejection of a New Jersey offshore wind pilot was met with boos, if not surprise, from state environmental groups and industry insiders, some of whom said Gov. Chris Christie’s (R) political ambitions may have been behind the decision.
Fishermen’s Energy LLC planned to install a 25-megawatt, five-turbine project in waters about 3 miles off the coast of Atlantic City, which the developers aimed to complete by 2016. The demonstration project was one of seven under consideration by the Department of Energy to receive an additional $47 million grant later this spring.But the New Jersey Board of Public Utilities this week denied Fishermen’s bid to participate in the state’s offshore wind renewable energy certificate (OREC) program, which would have obligated electric utilities to buy a percentage of their power from the project. The decision was made on the grounds that the project would raise electricity prices.

Even before the decision came out, environmental groups were speculating that the BPU would not approve the project due to Christie’s presidential ambitions, which were also seen as the motivation for the governor’s decision to exit the Northeast’s Regional Greenhouse Gas Initiative (EnergyWire, March 17).

In 2010, Christie signed the Offshore Wind Economic Development Act, which was intended to nurture the industry in New Jersey waters.

But New Jersey Sierra Club Director Jeff Tittel said the BPU’s decision was yet another sign that Christie is distancing himself from a clean energy agenda, calling it “a part of the overall strategy by this administration to prevent renewable energy and climate issues to go forward.”

“The concern that I have is that offshore wind is being held hostage by the governor’s national political ambitions,” Tittel said.

‘No-brainer’ rejected on economics

This isn’t the first time the project has faced rejection from the BPU: The agency rejected the developer’s settlement with the New Jersey Division of Rate Council, which represents the state’s electric ratepayers, in July 2013, also because the board believed the project’s energy prices would be too costly.

At an offshore wind conference held in Boston last month, Fishermen’s CEO Chris Wissemann called the Atlantic City Windfarm a “no-brainer” and expressed optimism that the BPU would approve the project.

After the George Washington Bridge lane closure scandal, he said, Christie’s appointment of a new BPU president, Dianne Solomon, signaled that state agencies were “regaining their independence” in New Jersey.

“We are hopeful that under new leadership that they will actually look at the merits of the case and not look at the politics,” Wissemann said.

But yesterday, Fishermen’s Energy issued a release condemning the BPU’s decision, saying the agency evaluated the project using the incorrect price of $263 per megawatt-hour rather than $199.17 per MWh. The BPU did not release a written decision and did not respond to a reporter’s question about the reasoning that led to the decision.

“Fishermen’s hopes that despite the decision yesterday, the BPU will eventually review all the evidence before the board and understand that the package offered by Fishermen’s is a strong, financially sound and economically beneficial proposal and should result in an eventual approval,” Wissemann said in a statement.

But according to the New Jersey Star-Ledger, the BPU did not consider the project’s cost based on the the lower energy price because it factored in federal subsidies like DOE’s $47 million grant — financial backing it has not yet secured — and without it, electricity buyers could be left with a $240 million bill for the two decades after the project’s construction, the board said.

Doug O’Malley, director of Environment New Jersey, said he believed the BPU’s analysis was “fundamentally flawed” because it didn’t take into account the environmental benefits of the project, which Wissemann has estimated to be on the order of $100 million.

“Clearly, New Jersey can’t be an offshore wind leader if we’re not building the turbines,” O’Malley said. “This project made sense for the environment, it made sense for the consumers.”

Fishermen’s Energy spokeswoman Rhonda Jackson said the developer plans to appeal the decision to the Appellate Division of New Jersey Superior Court.