1. The U.S.
   Department of Interior has declared that the greatest offshore wind energy potential–some 1,000 gigawatts of electricity, or one
   quarter of national demand– lies off the Atlantic Coast
   
2. In 2010, New Jersey adopted a robust
   package of financial incentives for offshore wind development, setting a target
   of a minimum of 1,100 MW of wind generation off the state’s  with a more
   ambitious goal of attaining 3000 MW by 2020, and
3. Those financial incentives encouraged several major developers to propose plans for wind farms off the state’s coast.

1. The cost of the energy that the projects would deliver to the regional grid appear to be much higher than expected.
   
2. The booming development of the Marcellus Shale natural gas play in neighboring Pennsylvania (and perhaps some day in New York) promises a competing source of energy at lower prices than what currently planned offshore wind farms can deliver.
3. The Administration of New Jersey Governor Chris Christie, who championed offshore wind energy earlier in his tenure, is sounding less enthusiastic about it today. New Jersey businesses pay some of the highest energy rates in the country and public subsidies for offshore wind would drive those prices even higher. Christie’s mission is to offer business reasons to stay in New Jersey. Even higher rates for electricity undercuts that mission.

Two recent consulting studies undertaken for the state raise serious questions about the project furthest along in the competition for state financial support– Fishermen’s Atlantic City Windfarm (FACW).

The most damaging of the two, prepared for the New Jersey Division of Rate Counsel by Acadian Consulting Group, recommended that the state turn down the project. It includes the chart below addressing Fishermen’s projected electric rates and economic effects.

Page  4 of Arcadian Study Group evaluates economic impact of energy rates

A second study, prepared by Boston Pacific, a Washington D.C.-based firm and OutSmart,
a Dutch firm
specializing in offshore wind farms, did not recommend that the project
be rejected, but questioned a number of assumptions made by
the developers.

Assembly Committee will meet tomorrow to test the winds

Assembly
Telecommunications and Utilities Committee Chairman Upendra J. Chivukula will take testimony from wind energy developers and other interested parties at a hearing scheduled for 10 a.m. Monday, March 5, in Trenton.

Presenters will include: Stephanie A.
Brand, Director of N.J. Division of Rate Counsel; Matt Elliott, Global Warming
and Clean Energy Associate for Environment New Jersey; Robert Gibbs, Vice
President, Garden Shore Offshore Energy and Manager, Development Renewable
Energy for PSEG; Daniel Cohen, President of Fisherman’s Energy; Stephanie McClellan,
Director of Strategic Initiatives Outreach for Atlantic Wind Connection, and
David Roncinske of Local 454 Wharf and Dock Builders.

In light of the chilling effect that the two studies likely had in the investment community, the hearing will be an important opportunity for offshore wind advocates to balance the picture. As a prime sponsor of the Offshore Wind and Economic Development Act, Chairman Chivukula is among them. 

In a news release announcing the hearing, he said: