Library filed under Offshore Wind from New Jersey
In the Fishermen’s Energy case, homeowners and businesses would be the ones subsidizing the wind farm, through state agreements to buy the power at rates substantially above the cost of electricity in the open market. Wind turbines are a mature technology deployed all over the world, including much at sea, so the “demonstration” aspect of the project is not to show they work but to show sufficient subsidies and political gain can be lined up to do a lot more windmill development off the East Coast.
The state on Friday again rejected a pilot wind farm project off the New Jersey coast, arguing that the company's financial plan is unsound and would require a state subsidy so large it would make the energy produced too costly for ratepayers. The company vowed to appeal.
Backers view the bill as a marker that will be eventually accepted by a new administration, once Christie’s term ends in January 2018 -- or sooner, if the governor decides to run for president and resigns his office. “We are talking about policy over the next 36 years.’’
BPU commissioners have said the “Offshore Renewable Energy Certificates” (ORECs) — which are required to recoup the millions of dollars investors would spend on the wind farm — may be costlier than projected. That would leave ratepayers on the hook for hundreds of millions of dollars, the BPU contends.
The rules, allowing developers to earn Offshore Renewable Energy Credits (ORECs) for the electricity their wind turbines produce, were supposed to be in place by March 2011. ...BPU and offshore developers cannot agree on how the financing mechanism should be structured.
“We were not involved in those conversations [about the lease areas] during the call period,” Dillingham said. “Stakeholders of all types, not simply industry or developers, [should be] included in these conversations about the decisions that are going to be made.
The federal government has awarded $47 million to sweeten the deal for a $188 million project the Garden State has deemed too risky for ratepayers.
Despite receiving a harsh blow from New Jersey regulators in March, offshore wind developer Fishermen's Energy is showing more signs that it intends to keep pushing forward with its 25 MW Atlantic City demonstration project.
A New Jersey company is appealing the state's rejection of its plan to build a wind farm off the coast of Atlantic City. Fishermen's Energy filed an appeal Monday with the state Board of Public Utilities, saying the agency erred when it rejected the plan last month.
The company claimed those costs would amount to $199 per megawatt hour, but that rate was dependent on it receiving up to $100 million in federal subsidies. The BPU’s staff questioned that aid, part of which was based on a federal tax investment credit, which expired at the end of 2013. Without the subsidies, the cost of credits to consumers would balloon to $263 a megawatt hour. “It’s simply too high a price for ratepayers,’’ said BPU President Diane Solomon.
Fishermen's Energy, the Cape May firm that pushed for a wind farm off Atlantic City, says the state Board of Public Utilities used an incorrect calculation when it rejected the project. The board unanimously voted down the project Wednesday, citing concerns that it would increase utility costs for residents.
The BPU decided the project placed too much potential risk of soaring electric bills for ratepayers. They said the project depended on a mixture of subsidies and federal grants to make sure ratepayers didn't get stuck with sky-high bills.
The three-year effort by a coalition to build the country's first offshore wind farm in waters off Atlantic City appears dead in the water after the state Board of Public Utilities rejected the proposal today. The unanimous decision by the BPU followed a recommendation by its staff, which said the $188 million proposed project was not financially viable because it left ratepayers on the hook for too much money if expected federal grants did not materialize.
That tab, according to BPU staff, could be about $187 million if outside financing falls through. Staff members have argued in board documents that because federal grants are not certain, the project would pose technical and economic risks as proposed. A spokesman at the BPU said this does not mean staff members there oppose the project outright, as has been reported by other news outlets.
The state Board of Public Utilities is expected next Wednesday to vote on a proposal by Fishermen’s Energy, LLC to build a 25-megawatt wind farm about three miles off Atlantic City. Several sources told NJ Spotlight that the staff is currently recommending the commissioners kill the project, which has been pending before the agency for three years.
Beyond urging the federal government to delay its lease auction, the letter urges the administration and Legislature to force the BPU adopt the necessary regulations to move the process forward and select the developers who will receive ORECs. Unless that happens and federal lease process moves forward, the letter warns that New Jersey will have no say as to which developers receive leases for offshore wind farms off its coast.
The New Jersey Division of Rate Counsel, which represents utility customers, initially opposed the project ...But the counsel agreed to support Fishermen's Energy's application in July after the company reduced its certificate price from $310 to $187, which reduces the hundreds of millions of dollars extra that electric customers would have to pay for power to fund the project.
The Legislature is trying to jumpstart offshore wind farms, a move spurred by frustration with the Christie administration’s failure to adopt regulations to make it happen in New Jersey. A bill (A-4538) introduced last Thursday by the deputy speaker of the Assembly John Burzichelli (D-Gloucester) proposes to have offshore wind projects financed by the state’s four electric utilities, which would recover the money from consumers -- and then some.
Economics, however, seemed to be the biggest factor in the state agency’s opposition. Fishermen’s Energy project relies on lucrative federal tax credits to make the project viable from a business and ratepayer perspective, but those incentives expire at the end of this year, unless renewed by Congress, and that appears to be a long-shot prospect, at best. “Most importantly, FACW has failed to credibly demonstrate that it will actually receive, at this late date, all of the federal subsidies,’’ the staff said in its brief.
The clock is quietly winding down on Fishermen’s Energy offshore wind project, a proposal its backers say could propel New Jersey into becoming a hub for offshore wind farms, and potentially create hundreds, if not thousands of new manufacturing jobs in the state. The 25-megawatt pilot, located 2.8 miles off Atlantic City, is the first to come under review by state regulators, but its prospects of moving forward are looking bleaker by the week, if not by the day.