The New Jersey Board of Public Utilities (BPU) has denied a settlement agreement between Fishermen's Energy and the New Jersey Division of Rate Counsel (DRC), causing the developer to push back the planned commercial operation date for its pilot project.
The BPU's decision represents a major blow for Fishermen's Energy, which is planning to use New Jersey's offshore renewable energy certificates (ORECs) to support the financing and construction of its Atlantic City Windfarm, a 25 MW pilot project located off the coast of Atlantic City.
The ORECs are part of the New Jersey Offshore Wind Economic Development Act (OWEDA), which was introduced as part of Gov. Chris Christie's Energy Master Plan.
The act directs the BPU to develop an OREC program to support at least 1,100 MW of generation from qualified offshore wind projects. OWEDA also authorizes the BPU to accept applications for qualified offshore wind projects; sets forth the criteria to be used by the BPU in reviewing the projects' applications; and authorizes OWEDA to provide up to $100 million in tax credits for qualified wind energy facilities in wind energy zones.
According to a BPU spokesperson, the staff took issue with certain elements of the Fishermen's Energy proposal. To meet OWEDA criteria, applicants – among other provisions- must submit a complete application, demonstrate access to financing and prove that the project provides net economic benefits for the state.
The spokesperson says BPU staff were concerned about a $19.2 million shortfall that New Jersey ratepayers would be forced to shoulder if federal incentives, such as the investment tax credit or grants from the U.S. Department of Energy, do not materialize.
The DRC, which represents ratepayers in the setting of electricity rates, initially opposed the Fishermen's project, saying it was too costly. However, in a $187 million deal reached with the developer, the settlement featured a reduction in the wind farm's projected rates, therefore lowering costs and lessening potential impact to ratepayers.
The BPU board of directors is expected to formally issue a ruling later this week.
‘Fishermen's Energy is very disappointed by the NJ Board of Public Utilities' decision to not approve the settlement,’ said Chris Wissemann, CEO of Fishermen's Energy, in a statement. The developer also says it plans to continue working with the BPU to help make the project successful.
Jim Lanard, president of the Offshore Wind Development Coalition, says the two parties could still resolve their issues.
‘While the NJ Board of Public Utilities rejected a set of stipulations between Fishermen's Energy and the Rate Council, the board itself has directed its staff to continue discussions with Fishermen's," he tells NAW. "This is a good sign and gives both parties the opportunity to find common ground. Fishermen's has made significant progress since its first submission to the board, and the gap between the parties can be closed."
Nonetheless, rather than achieving a commercial operation date in 2014 – which the project developer had hoped – Fishermen's is delaying the expected date of commercial operation until fall 2015.
If the pilot project is successful, Fishermen's Energy intends to build a larger offshore wind farm, Fishermen's Offshore New Jersey, a 330 MW wind farm located in federal waters.