A developer hoping to build America’s first offshore wind farm is taking another look at its costs after reports attacked its plans as too expensive, technically unproven, and likely to have a negative effect on the local economy.

Fishermen’s Energy, a consortium of fishing companies, plans to build the wind farm in New Jersey waters three miles off the coast in a five-turbine pilot project that it hopes will pave the way for a bigger installation in federal waters farther offshore.

But the group received two setbacks in February when separate reports for the New Jersey Board of Public Utilities and the state’s Division of Rate Counsel questioned the project’s viability, and in one case further recommended that regulators reject the plan.

Stephanie Brand, director of the Division of Rate Counsel, told a hearing of the New Jersey legislature’s Assembly Telecommunications and Utilities Committee on Monday that the body has “significant concerns” about the plan which she called “the most expensive offshore wind project in the world.”

Wish You Were Here?

Brand also questioned the company’s assertion that a leading economic benefit of the wind farm would be tourism from people coming to see the turbines, which would be built off Atlantic City.

“Those tourists would have to be attracted in the same numbers as tourists to the Washington Monument in order for those numbers to work,” she said.

Now, the company is re-examining its costs.

“We will be sharpening our pencils so that we will not be deemed the most expensive however you measure it,” Fishermen’s Energy President Daniel Cohen told lawmakers. The group is seeking more time for submission of its revised plan with the BPU.

But it still plans for the farm, which would generate up to 25 MW, to be the first in US waters.

“Our goal is to make Atlantic City the birthplace of offshore wind for this country and for North and South America,” Cohen said.

Fishermen’s Energy has not disclosed its cost projections, and all references to them are redacted in the reports by Boston Pacific Company for the BPU, and Acadian Consulting Group for the Division of Rate Counsel.

The Feds Step In

Unlike in Europe and some parts of Asia, the US still has no working farms despite the long-delayed Cape Wind project off Massachusetts. But the industry got a boost on March 1 when the federal Department of Energy said it would provide $180 million over six years to support innovative installations, including $20 million this year for up to four farms.

The government estimates that US offshore wind resources total 4,000 gigawatts, and development would allow the country to meet future environmental and economic challenges.

A plan to build a wind farm off the coast of Delaware failed in December when its developer, NRG Bluewater Wind, said it had been unable to find investors despite securing the first US agreement with a local utility to purchase power from an offshore facility. Read more about that project, and the failure to secure financing, on Breaking Energy here.

The company blamed the coming expiration of federal tax credits for its inability to secure financing.

Low natural gas prices, which are driving down retail electricity rates in some areas, may also be deterring investors’ interest in costly offshore wind projects, said Brand of the Division of Rate Counsel.

The Acadian Consulting report, issued on February 3, estimated the Fishermen’s Energy project would require ratepayer support totaling $347 million, and cost the state more than 29,000 jobs because of the increased cost to ratepayers.

“The [Fishermen’s] project is estimated to result in negative net economic impacts,” it said.