HURDLE FOR GOOGLE’S OCEAN WIRES

Offshore Wind Transmission System Raises Red Flag at State Agencies; State officials worry that Atlantic Wind Connection's underwater backbone could spike already high power prices
Tom Johnson, February 22, 2011 (New Jersey Spotlight)

"…In filings with the Federal Energy Regulatory Commission (FERC), both the state Board of Public Utilities (BPU) and the New Jersey Division of Rate Counsel expressed concern about the Atlantic Wind Connection project, a $5 billion submarine high-voltage transmission backbone…[T]he two agencies argued that the project, stretching from Virginia to New Jersey, could adversely affect the rates paid by consumers and also place much of the risk on the ratepayer instead of the developers.

"The Atlantic Wind Connection is a 350-mile underwater transmission line, which aims to connect the spate of offshore wind farms being developed by New Jersey and other states. Its backers include Google, and Trans-Elect, a transmission company…[It] has been viewed warily in New Jersey by both regulators and offshore wind developers, who already have lined up their own interconnections with the regional power grid, and at a far lower cost than what Atlantic Wind Connection envisions…"

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"Robert Mitchell, chief executive officer of Trans-Elect [recently] argued…the project would bring down electricity costs to consumers by reducing congestion on the regional power grid, a problem blamed for spiking consumers’ bills in New Jersey by more than $1 billion a year…6,000 megawatts of offshore wind…could result in a savings of $17 billion for ratepayers up and down the eastern seaboard over the next two decades…[and] could reduce [climate change-inducing] carbon dioxide emissions…by 16 million tons…

"New Jersey officials, however, remain unconvinced…Consumers already pay some of the highest electric bills in the nation, a burden some argue could increase as the state shifts to cleaner sources of energy, such as solar and wind power. According to the Rate Counsel, if current state policies remain in effect, subsidies to develop solar and wind power projects could cost consumers an additional $5 billion over the next two decades."

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"…[New Jersey officials say] the project ought to go through the same planning process as other transmission proposals…[and question] the ultimate viability of the Atlantic Wind Connection proposal, which seeks a return on equity of 13.58 percent, the highest possible under the FERC’s rules…In particular, the Rate Counsel objects to the project's seeking special incentive ratemaking remedies, including allowing the project to begin collecting from customers even before construction on the transmission backbone begins…[which, it says,] side-steps state regulatory ratemaking and fails to balance risk between the developer and ratepayers…

"…[The Atlantic Wind Connection’s] Mitchell said the developer hopes to clear the federal agency review within a couple of months."