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Transmission bill a signal on which way wind is blowing

Project to connect offshore energy farms to land could create jobs, but needs legislative support for a mostly stagnant industry in N.J.

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The planned route of the New Jersey Energy Link, which needs legislative support to move forward.
The planned route of the New Jersey Energy Link, which needs legislative support to move forward. - (COURTESY ATLANTIC WIND CONNECTION)

A bill before the state Senate could help make a highly publicized offshore electric transmission line a reality, but the proposal is raising plenty of questions — both about New Jersey's wind energy future and the potential cost to ratepayers.

Senate President Stephen M. Sweeney (D-West Deptford) introduced a bill last month that would ask the regional grid operator, PJM Interconnection, to incorporate an offshore transmission line into its regional transmission expansion plan.

Passage of the bill is a crucial step for Atlantic Wind Connection, a company hoping to connect offshore wind farms to terrestrial power grids from northern New Jersey to southern Virginia.

“It would have huge advantages for wind developers, because now they do not have to build their own transmission lines onto shore,” said Bob Mitchell, Atlantic Wind Connection's CEO. “It simplifies their permitting process.”

The New Jersey section of the transmission line, dubbed the New Jersey Energy Link, is slated to be built first.

PJM has said it will add a transmission project to its expansion plan if a state's governor, regulator, Legislature or utility regulator instructs the grid operator to do so. But, according to Mitchell, the state also must “agree that the ratepayers of the state will cover the cost of that transmission line, just like they cover the transmission costs for other transmission lines.”

Mitchell met with the governor's office, the Board of Public Utilities and legislators. Sweeney volunteered to introduce the bill; he “understands that if we take advantage of the possibilities that wind energy offers, it can be a huge boost for job creation and economic growth in New Jersey,” said Christopher Donnelly, a spokesman for the senator, in an e-mail.

Sweeney's offshore wind optimism was echoed three years ago, when Gov. Chris Christie signed the state's Offshore Wind Economic Development Act. But since then, progress has been minimal. The BPU has yet to release guidelines for the wind industry incentive created by the act. In the meantime, other states, most recently Maryland, have passed their own wind incentives.

Nonetheless, one project is moving forward here.

Fishermen's Energy has applied to BPU to build a 25-megawatt wind farm pilot project off the coast of Atlantic City. The BPU is expected to rule by June 30.

Rhonda Jackson, a Fishermen's spokesman, said her company's wind farm would be in the water long before the Atlantic Wind Connection. It's also closer to the shoreline than projects like Atlantic Wind's, but Jackson said she believes there's potential for other projects in the future that could utilize the offshore line.

Proponents of offshore wind note that wind turbine manufacturing is based in Europe, but a domestic industry would likely need nearby manufacturers.

“If and when offshore wind becomes a reality, the first state to take advantage will be a leading candidate for manufacturing,” Donnelly said. “The Senate president believes Paulsboro is an ideal location for that.”

Mitchell said building the Energy Link and 3,400 megawatts of offshore wind power would create 20,000 jobs, pump $9 billion into the state's economy and bring in $2.2 billion in new state and local tax revenue.

However, if Sweeney's bill is enacted, that economic growth would come at a cost to ratepayers.

Mitchell was reluctant to estimate the cost of the New Jersey Energy Link, but published reports have pegged it at $2 billion. Mitchell said it won't add more than the cost of “a cheap cup of coffee” to ratepayers' monthly bills pointing to a survey his company commissioned showing 64 percent of New Jerseyans are willing to pay an extra $5 per month to get offshore wind.

But some question whether the offshore transmission line is even necessary.

“It's not a good idea,” said Tim Fagan, director of public policy at Public Service Enterprise Group, the parent company of the state's largest utility. “From the perspective of helping jump-start wind, it certainly isn't necessary. … And from a transmission perspective, without the wind farms, it's simply an expensive proposition which provides really no benefit to consumers whatsoever.”

PSEG was an early backer of offshore wind, forming a joint venture to develop wind farms, before putting the plans on hold. A spokesman said the company is monitoring state and federal policy, and hopes to some day become an active participant in the industry.

Jeff Tittel, director of the Sierra Club of New Jersey, worries the offshore transmission line could be put to inferior uses if the wind farms never materialize.

“Our biggest concern about Atlantic Wind Connection is if windmills do not get built, it could end up bringing coal power from Virginia,” he said.

Mitchell dismissed that concern in part because he said coal power will play a minor role in the United States by the time the full transmission line is built in 10 to 15 years.

He said the line has reliability benefits, but the intent is to transport wind energy.

“If the state decided not to do wind, the line probably would not be built,” he said.

E-mail to: jaredk@njbiz.com
On Twitter: @jaredkaltwasser

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