N.J. regulators deliver setback to planned project
The state’s Board of Public Utilities on Friday rejected a settlement between Fishermen’s Energy, the offshore wind developer, and the New Jersey Division of Rate Counsel, a consumer watchdog agency, to establish the price the company would receive for electricity from its planned 25-megawatt wind farm offshore from Atlantic City.
“We negotiated what we believe is the best deal we’re going to get,” said Stefanie Brand, the Division of Rate Counsel’s director, in an interview Friday.
Brand said the agreed-upon price was 40 percent below what Fishermen’s first sought and was intended to maximize federal support in addition to providing assurances on construction and decommissioning costs.
The BPU decision had not been posted online as of this morning, and spokesmen for the board did not return phone calls or emails requesting comment by press time. According to news reports, board members at the Friday meeting were particularly opposed to a stipulation in the agreement that would have put state ratepayers on the hook for another $19.2 million if federal incentives came in below their expected level.
Fishermen’s is hoping to qualify for a federal investment tax credit that would cover 30 percent of the project’s costs as long as construction on the project begins by the end of this year; the company also could qualify by showing that it has spent at least 5 percent of what it ultimately would cost to build the wind farm this year. It also has received a $4 million initial grant from the Department of Energy, one of six companies to receive funding as part of a broader program in which DOE hopes to spend a total of $168 million over the next six years promoting offshore wind.
The agreement would have effectively enabled Fishermen’s to sell the electricity for $187 per megawatt-hour through the state’s offshore renewable energy credit system, with stipulations that would have increased that price if federal support through grants or tax credits did not materialize as expected.
In a statement Friday, the company said it was disappointed by the BPU’s decision.
“There is a clearly demonstrated record indicating that approval would create hundreds of jobs and inject more than $150 million into New Jersey’s economy,” stated Chris Wissemann, CEO of Fishermen’s Energy. “The proposed price is lower than any offshore wind project in the U.S.”
A spokeswoman for Fishermen’s, Rhonda Jackson, said that the BPU’s decision was not fatal for the project and that negotiations over the rate would continue. The company is aiming to have the wind farm complete by fall 2015.