Fishermen's weighs response to BPU
Fishermen’s Energy is weighing how to respond to New Jersey regulators on Wednesday having rejected the developer’s proposal to have ratepayers subsidize its 25MW pilot offshore wind farm.
“We’re assessing our options and that includes a legal appeal,” says Rhonda Jackson, spokeswoman for Fishermen’s, which would be filed in the Appellate Division of the Superior Court.
Analysts say other alternatives are on the table, although Jackson declined comment.
Fishermen’s could file a motion of reconsideration with the state Board of Public Utilities (BPU), whose four commissioners unanimously voted against the project qualifying for offshore wind renewable energy certificates (ORECs).
Timing of such a move could hinge on whether the project wins a $46.6m grant from the US Department of Energy (DOE), a decision expected in mid-May.
If Fishermen’s is selected from among six projects, it would address a key concern of commissioners who believe that without the funding, the developer cannot guarantee its proposed $199.71 per MWh OREC price and ratepayers would have to cover the difference.
In a statement Thursday, Fishermen’s contends that the commissioners had their facts wrong in apparently evaluating the project with a power price of $263 per MWh, a level at which the project is not financially viable, according to BPU staff. “Without that misstep the BPU vote should have led to a positive outcome,” the developer asserts.
Jackson says the price differential is a moot point because Fishermen’s is on record that it would be responsible for any additional cost to ratepayers above its proposed OREC price if federal funding does not materialize. “That’s the risk we are willing to take. They didn’t accept, look at or consider that,” she says.
Fishermen’s is the first developer to apply for New Jersey’s subsidy programme that will incentivize 1.1GW of offshore wind energy by 2020. It will award ORECs to operators of wind farms on a megawatt-hour production basis.
Investor-owned utilities in the state will be obliged to purchase electricity from the offshore facilities and also ORECS, which they can use to help comply with New Jersey’s renewable portfolio standard.
To qualify for the OREC programme, which BPU will oversee, Fishermen’s must show that its project will provide a “net economic benefit” to New Jersey through job creation, economic development and other performance metrics. The commissioners’ vote was partly based BPU staff saying that the project will not do this, a conclusion that Fishermen’s strongly disputes.
“If the BPU had evaluated the project based on the actual proposed rate of $199/MWh even the BPU’s own consultants Boston Pacific agreed the project passed the net benefit test,” the statement says. Fishermen’s asserts that it will generate almost $100m in direct spending in the state.
The project’s future will also hinge on how XEMC – its turbine supplier and reported source of 70% of its financing – reacts to the BPU decision. Jackson says the developer will send a delegation next week to China to huddle with XEMC executives. The vendor has proposed locating a turbine assembly plant in New Jersey if it can win enough orders for US offshore projects.