March 20, 2014
The NJ Board of Public Utilities ('BPU') simply has their facts wrong. They based their rejection of the Fishermen's Atlantic City Windfarm ('FACW') on the wrong power price. The price proposed by Fishermens Energy (Fishermen's') to the BPU is $199.17 per MWh. The BPU apparently evaluated the project with a price of power at $263 per MWh, a figure that is not supported by the record. Without that misstep the BPU vote should have led to a positive outcome.
Fishermen's Energy August 9 2013 Testimony stated unequivocally:
'In order to remove any perceived ambiguity with regard to the OREC pricing and to provide the lowest possible OREC Price, 1 FACW proposes that the price to be evaluated in this Petition 2 and Amended Application is $199.17 per MWH '
Every other reason for denial stems from the BPU's misinterpretation of the record. At the mistaken higher $263/MWh rate, the BPU claims the project failed to meet the net benefits test. 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, stating:
'With documented economic benefits and lower OREC price , even if FACW's claimed benefits for tourism environmental impacts, merit order effect and lessons learned are excluded, the Project provides net benefits of $33.4 million (net present value). The Project then meets the requirement to demonstrate net benefits to the State as required under the Act.'
'Fishermen's hopes that despite the decision, the BPU will eventually review all the evidence before the board and understand that the package offered by Fishermen's is a strong, financially sound, and economically beneficial proposal and should result in an eventual approval' stated Chris Wissemann, CEO Fishermen's.
The proposal demonstrated:
- Creation of more than 400 jobs
- Commitment to inject more than $150 million in capital directly into New Jersey's economy
- An electricity price lower than other demonstration scale projects in Maine and Rhode Island
- An electricity price as low as full commercial scale projects - there is no premiumassociated with getting going today
- No risk at all to ratepayers - power is only paid for when delivered
- Minimal overall cost to ratepayers - less than a cup of coffee a year, a minuscule amountto start an industry
- No costs to the State of New Jersey or to New Jersey Taxpayers
- All financial risk for construction and operation is borne by the developers with the State of New Jersey insulated from all financial risk
- The case that has proven that benefits exceed cost of the electricity
- Commitment to making this project home-grown by bringing the maximum amount of jobs to NJ
- Brings almost $100 million in federal incentives in to New Jersey
'This project offers NJ the opportunity to build on a small scale years, in full compliance with the statute, in advance of full commercial scale projects, learn and optimize' said Wissemann.
'It is common sense - like training before you attempt to run a marathon. Just showing up on race day without practice would be foolhardy. Offshore wind holds great promise for New Jersey, we now just need the BPU to honor the intent of the Offshore Wind Economic Development Act and take action to approve this project. Just as Iowa has become the center of jobs for the on-shore wind industry, approval of the Fishermen's Energy Project - instead of rejection -- can be the first step in making New Jersey the center of the new American offshore wind industry.' Wissemann continued.
'The Legislature acted in an overwhelming and bipartisan manner to pass this legislation [OWEDA]. The Governor signed the Law but his Administration has failed to implement it. Now we must turn to the Courts to give meaning to the Rule of Law which we believe will ultimately result in an approval of this project' stated Paul Gallagher, COO and General Counsel, Fishermen's Energy.
The Atlantic City Offshore Wind Demonstration Scale Project Context
The Offshore Wind Economic Development Act has set the stage for New Jersey to be first, and sets the stage for New Jersey to win the lion's share of economic development benefits as the industry develops in the United States. Being first is the key to securing economic benefits for New Jersey. Just like Iowa taking a leadership position in the land-based wind business a decade ago garnered it more than 80 new suppliers and generated more than 3,200 jobs, New Jersey can win the offshore wind supply chain. As states compete for the supply chain up and down the East coast, all eyes are on New Jersey. The Atlantic City project is the bell-weather. Approval shows New Jersey is serious about capturing the industry and creating jobs. The Atlantic City project has been specifically configured to maximize New Jersey content and job creation and sets the standard for approving projects on sound economic grounds.
The BPU's litigious process has kept the true value of the proposal and the sponsor's commitment from coming to light.
The Proposed Project
The proposed 5-turbine demonstration scale offshore wind project has the following features:
- Lowest cost of electricity for a US demonstration project. The proposed $199.17 power price is lower than any domestic offshore wind demonstration projects (Rhode Island and Maine).
- No risk to ratepayers or the state. Proposal includes payment only for power produced. Proposal also includes a pre-funded decommissioning fund so that NJ and ratepayers are completely isolated from construction cost risk, performance risk, and decommissioning risk.
- Minimal cost to ratepayers. The entire cost of implementing this project, excluding any benefits, is under a dollar a year for the average consumer - less than the cost of a cup of coffee, a minuscule amount to start an industry.
- Job creation. The project has been specifically configured to bring jobs to New Jersey. Over 200 direct construction jobs will be created and almost 500 total jobs just from this project. In addition there will be long term operations and maintenance jobs. Project sponsors are willing to commit to documenting job creation.
- Economic Benefits far exceed ratepayer costs. Benefits from construction, operations and maintenance, pollution reduction, and ancillary benefits have been documented to exceed costs by more than two to one. Direct spending in New Jersey is almost $100,000,000. These benefits make the project unequivocally a boost to New Jersey's economy. Project sponsors and key contractors are willing to commit to New Jersey content that ensures benefits exceed costs.
- Manufacturing commitment. The turbine manufacturer, XEMC Darwind, has agreed to build a factory in New Jersey. An executed agreement awaits approval by the South Jersey Port board of directors. This commitment includes commitment to creating 1,000 jobs and $100,000,000 in spending. This is foreign direct investment in New Jersey - both for the demonstration project and the factory. This is one of the true prizes of being first - a prize that is virtually unobtainable without being first.
About Fishermen's Energy
Fishermen's Energy is a developer of offshore wind energy projects, founded by New Jersey commercial fishermen to respond to the public's need to develop the ocean for renewable wind energy. Fishermen's goal is to turn Atlantic coastal waters into an unmatched source of clean energy, while maintaining a vibrant commercial fishing industry. Fishermen's Energy has partnered with experienced professionals in the renewable energy and the offshore wind business community to propose, plan, and build responsible projects to serve the public's need for safe renewable energy. Fishermen's Energy intends to harvest the wind and the sea, side by side, in an environmentally responsible and sustainable manner.
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