Offshore NJ wind farm denied again; company to change details of plan

Source: BY JAMES M. O’NEILL, • Posted: Tuesday, October 20, 2015

In another blow to offshore wind energy in New Jersey, the state Supreme Court has decided to let a lower court ruling stand that effectively blocks construction of a pilot wind farm off Atlantic City.

The state Board of Public Utilities had denied the proposed wind farm multiple times, saying its financial plan was unsound and the subsidies necessary for the project to work would have cost state ratepayers too much.

In May, the state’s appellate court upheld that decision, prompting Fishermen’s Energy, the Cape May-based company behind the proposal, to seek an appeal with the state Supreme Court.

While Fishermen’s Energy has one more chance to appeal – to the U.S. Supreme Court — company officials said they do not plan to take that route.

Instead, they have changed some of the details of their project to address the BPU’s concerns, including a change in the manufacturer of the turbines that will be used from XEMC to Siemens.

“We hope that with the legal process concluded, we can engage in open discussions with the BPU on how a new application can be optimized to pass the BPU’s criteria for approval,” said Paul Gallagher, the chief operating officer of Fishermen’s Energy. “By working together we believe we can reduce the cost to a level that meet’s BPU’s objectives.”

The Fishermen’s Energy pilot program would include a five-turbine farm 3 miles off Atlantic City that could power about 10,000 homes.

Through state legislation signed by Governor Christie in 2010, the BPU is charged with making sure that any renewable offshore wind project meets a “net benefit” test — the state subsidies that a project receives must be low enough to provide a net benefit to ratepayers.

Fishermen’s Energy estimated that its subsidies would be lower than what the BPU projected because the company would rely on $100 million in federal grants and tax benefits. But the BPU rejected the plan last year because the company had yet to secure the $100 million. When the company later was awarded a $47 million federal grant, the BPU did not change its decision, saying there was no guarantee the full $100 million would be secured. Without that funding, the BPU argued, the energy produced by the farm would be too expensive for ratepayers.

The state Supreme Court decision comes as the federal government gets ready to hold an auction next month to lease more than 340,000 acres in federal waters off New Jersey for potential wind farms. Fishermen’s Energy has expressed interest in bidding.

Some in the offshore wind energy industry, as well as Democrats in the state Legislature, have become frustrated with the BPU, not only because of its stand on the Fishermen’s Energy pilot project, but also because the agency has yet to finalize a funding mechanism essential to offshore wind projects.

State officials had talked several years ago about promoting offshore wind energy projects and becoming the first state to have an offshore wind farm, but over the summer work started off the coast of Rhode Island on the nation’s first offshore wind farm.

The state Supreme Court did not provide any reason for deciding not to take up the Fishermen’s Energy appeal.