Offshore wind farm rejected in N.J.

New Jersey's energy regulation agency on Wednesday rejected the funding mechanism for a $188 million offshore wind farm, essentially blocking a proposal that supporters said could have made the state a leader in offshore wind.

At a meeting Wednesday in Trenton, the four commissioners of the state Board of Public Utilities voted unanimously, in support of board staff's recommendation, to reject the proposal. The funding was the final necessary piece of the proposed Atlantic City Offshore Windfarm project, developer Fishermen's Energy said. Without it, the project remains dead in the water.

The plan involved five turbines almost three miles off the coast of Atlantic City in a pilot program generating about 25 megawatts of electricity.

But the proposal depended on a mix of subsidies and federal grants that the BPU said it was not sure the company would receive. Without them, staff and commissioners noted, the BPU could not ensure that ratepayers wouldn't get stuck with higher bills.

"It's an unfortunate decision in that it's probably compounded because it appears that the BPU simply had its facts wrong," Chris Wissemann, CEO of Fishermen's Energy, said Wednesday evening. "It's unexplainable."

The company plans to appeal in court.

Wissemann said the board staff's analysis was based on old information, a power price of $263 per megawatt-hour. At that price, the board staff said, the project would have had a net economic cost.

That analysis was no longer accurate, Wissemann said. The number the company ultimately proposed: $199 per megawatt-hour.

"It's as if they're evaluating the project a year ago," Wissemann said.

Dianne Solomon, board president, said at the meeting that she was not convinced the company could guarantee the lower price.

"I disagree with Fishermen's contention. . . . This price is only sustainable with the full receipt of federal grants and tax incentives, which the company may or may not be entitled to receive," she said.

"Fishermen's has testified that the project would have net benefits over the lifetime of the project," she added later. "However, those benefits rely on assumptions which Fishermen's fails to adequately demonstrate."

A spokesman for the board declined to comment.

The project had been hailed by environmental groups as a means of propelling New Jersey to the forefront of offshore wind farming.

"The rejection of this project is not a good sign," said Doug O'Malley, director of Environment New Jersey. The state "can't be an offshore wind leader if we're not building the turbines."

In October 2008, then-Gov. Jon Corzine announced plans to make New Jersey a world leader in wind energy, calling for the state to triple the amount of wind power it planned to use by 2020 to 3,000 megawatts. That would be 13 percent of New Jersey's total energy, enough to power 800,000 to almost one million homes.

The state's current energy master plan calls for developing 1,100 megawatts of offshore power by 2020.

An approval Wednesday could have advanced the project toward becoming the first grid-connected offshore wind farm in the nation, Wissemann said.

"The real issue with being first is attracting the industry investment and supply chain. And so, unfortunately, New Jersey, by saying no, just makes it clear it's not interested in those jobs and that investment," Wissemann said. "You take a state that was unequivocally a policy leader two years is now taken to task by, for instance, Maryland."