New Hampshire, USA — One of a handful of fledgling U.S. offshore wind projects is still in limbo seeking state support in New Jersey, and the clock’s ticking.
This summer Fishermen’s Energy officially submitted its offshore wind proposal, the Fishermen’s Atlantic City Windfarm (FACW), to the New Jersey Board of Public Utilities (BPU) after lengthy back-and-forth and a number of compromises with the State of New Jersey’s Division of Rate Counsel, particularly in lowering the prices by around 40 percent. Last month, however, the BPU rejected the proposal detailing a number of concerns about establishing a ~$19 million risk backstop, lack of clarity in escrow, and a lack of clarity and confidence in the evaluation of turbine technologies and suppliers.
Rate Counsel responded that the newest FACW proposal strikes a balance between ratepayers’ needs and the project’s attractiveness to future private investment: “The provisions of the Stipulation adhere to the statute’s language and intent, while taking into account the real-world requirements for building and financing offshore wind.” More broadly, BPU’s approval of FACW would stamp the state’s commitment to “move forward with its energy policy goals of developing offshore wind” — and with the agreed-upon amendments, at a significantly reduced cost to ratepayers than the original project proposal.
A month later, two of the BPU’s concerns have already been addressed: achieving Type B certification for the wind turbines, to be supplied by XEMC, and some reassurance of XEMC’s financial viability. FACW also has offered to further amend its proposal to fold that $19 million back into the price, but Rate Counsel is mulling to what extent that will affect ratepayers and whether it could accept that change, according to its division director Stefanie A. Brand.
“The fundamental question is: do you want ratepayers assisting in funding these types of projects? If yes, that will cost a lot of money,” Brand told REW.com. Still, “for offshore wind to get established in the U.S., there probably needs to be a ratepayer contribution to help the industry get going.” What could ultimately amount to hundreds of millions of dollars isn’t an easy pill for ratepayers or Rate Counsel to swallow, she acknowledged, “but that doesn’t mean it’s not worth paying for, if it helps us move from fossil fuel-based energy supply to more renewable energy.”
Evidentiary hearings scheduled for late August, mainly involving back-and-forth between FACW and BPU, were postponed and now are tentatively planned for the end of October. Once that finally happens all sides will file more briefs and then await a final BPU decision. Having already accepted multiple extensions and delays, FACW has to start thinking toward some end-of-year deadlines to meet federal tax credits, and benchmarks before next spring when the DoE “down-selects” its funding for offshore wind demonstrations from seven projects to three, confirms FACW spokesperson Rhonda Jackson. Getting BPU’s stamp of approval would give FACW a big boost toward the latter, especially given the uncertainty surrounding other DOE offshore wind candidates.
Lead image: Boardwalk to Winter Beach, New Jersey, via Shutterstock