Ocean City, through which transmission from the first offshore wind project in New Jersey would run, argued Friday that the Board of Public Utilities (BPU) should delay the project while an administrative hearing and environmental studies of the line’s route are conducted.

The city made its argument during an online public hearing on a petition filed by developer Ørsted asking the BPU to approve an easement for the line to run underground across land developed with state Green Acres money, which funds the development of parkland and natural areas.

Ørsted is seeking approval under a new law passed by the legislature last year and enacted in July that gives the BPU authority to over-ride local government officials in land-use questions concerning offshore wind projects if the board finds that the land is “reasonably necessary” for the project’s construction.

The case is the first test of the law, and the dispute over the easement is one of the most prominent challenges so far for the 1,100-MW Ocean Wind 1, the first of three offshore projects approved to date by the BPU.

Dorothy F. McCrosson, solicitor for the city, questioned the legitimacy of the law, saying it has “not yet been tested in the courts” and said the petition should be heard by the Office of Administrative Law.

“It remains to be seen whether it will survive judicial scrutiny,” she said.

Ørsted is seeking a 30-foot-wide easement running the length of the city’s main island, which is about 8 miles long, for a 275-kV cable that will connect Ocean Wind’s turbines, about 15 miles offshore, to the PJM grid at a substation, sited on a closed coal-fired power plant in neighboring Upper Township.

Ocean City opposes the project, which was approved in 2019, as do local residents, who say the nearly 100 turbines will tarnish their ocean view. Also opposed are commercial fishermen, who say it will hurt their ability to fish, and tourism interests, who fear fewer visitors will come to enjoy a shoreline with turbines on the horizon. (See Ørsted NJ Wind Project Faces Local Opposition.)

Pristine Beach and Wetlands

BPU President Joseph Fiordaliso told speakers, however, that the hearing focused only on the narrow issue of whether the easement was reasonably necessary. Aside from attorneys from Ocean City and Ørsted, the only speaker was the director of the New Jersey Division of Rate Counsel, Brian O. Lipman. As in a court trial, each speaker was allowed an opening statement and time to rebut other speaker’s comments.

The BPU made no decision on the issue Friday, and Fiordaliso said the board will evaluate all the evidence presented and make a decision at a future, as yet undetermined, date.

McCrosson noted that the U.S. Bureau of Ocean Energy Management (BOEM), which last week released a draft environmental impact statement (DEIS), the National Marine Fisheries Service (NMFS) and Army Corps of Engineers are working on environmental impact statements.

“Any one of these agencies might determine that the environmental impact of the proposed route through Ocean City is unacceptable,” McCrosson said. “In which case, the easements would not be reasonably necessary. Waiting until the environmental impacts can be addressed and understood would be prudent.”

She argued that Ocean Wind 1 could avoid the conflict with Ocean City if it opted to send the transmission through a different route, which would go through nearby Egg Harbor instead. She said the route would present no disruption to Ocean City, but Ørsted had dismissed it earlier because it would be more expensive.

“The overwhelming benefit of utilizing the Egg Harbor route is the utter lack of disturbance to the citizenry of Ocean City,” McCrosson said. “The city’s pristine beach and wetlands would not be disturbed. The streets would not be excavated.”

But attorney Gregory Eisenstark, representing Ocean Wind 1, said the developer has provided extensive testimony on the environmental and construction reasons why the Egg Harbor route was not suitable.

“The impacts to Ocean City and its residents will be minimal,” he said. “The line will be underground. Once the construction is completed, you won’t see it and you won’t hear it. And quite frankly, it will be no different than the underground facilities that are already in Ocean City.

“I suggest to you that Ocean City’s feigned objection to the route that we’ve selected has nothing to do with the actual onshore route. But it has to do with Ocean City’s overall objection to offshore wind.”

Eisenstark said the cost of the different routes evaluated had no bearing on the hearing because Ørsted will pay for it as part of its bid for the project and not ratepayers. He added that the “reasonable necessity” standard doesn’t mean that the easement has to be “absolutely necessary” to the project.

“It doesn’t mean it’s the only alternative,” he said. “It doesn’t even mean it’s the best alternative. It just means that the project evaluated different alternatives, and the alternative it has proposed is a reasonable one. It doesn’t have to be the best one. It doesn’t have to be the lowest-cost one.”

Appraisal Offer

The three offshore wind projects approved by the BPU so far total about half the state’s target of 7,500 MW by 2035. The other two, the 1,148-MW Ocean Wind 2 and 1,510-MW Atlantic Shores, were approved in June 2021. The state expects the first of three more solicitations to begin early in 2023. (See NJ Awards Two Offshore Wind Projects.)

BOEM’s DEIS concluded that the project would not have a major impact on most of the 19 environmental and related categories scrutinized in the report. But the 1,408-page report did find that it would likely have a significant, and in some cases major, impact on marine navigation and vessel traffic. (See BOEM Draft EIS Finds Potential Major Impacts from 1st NJ OSW Project).

Eisenstark said Ørsted has discussed the needs of the project with Ocean City officials for three years. The developer filed its petition asking for the easement after sending a formal letter on Aug. 11 seeking the town’s blessing for the easement. Ørsted also obtained an appraisal of the value of the easement and offered to buy it for 10 times the amount, but it has not received a response from the city, he said.

“Ocean Wind would prefer to reach a voluntary agreement with Ocean City,” he said. “But unfortunately, we have not been able to reach an agreement.”

In May, the New Jersey Division of Rate Counsel told a hearing on the plan that it had concerns about the Ocean City route and believes there was an acceptable alternative that would be longer but would result in fewer disturbances.

But on Friday, Rate Counsel Lipman said he would like to contribute to the evaluation of the easement but could not because the division had not been able to obtain sufficient insight. He questioned the process behind the hearing.

“We have not had the opportunity to fully probe that issue,” he said. “There was no discovery in this matter. We asked Ocean Wind if they would ask answer some questions, and they did answer some of our questions. But not all of our questions. And they didn’t have to because there was no discovery in this process.

“Ocean City raises a number of issues that, quite frankly, we would have liked to have resolved if we’d known about them through discovery,” he said. The cost of each route is relevant, and that is recognized by the state Supreme Court so that the board can determine whether it is reasonably necessary for the developer to opt for one route over another, he said.

“I understand this is the first case of its type. And so the process was going to be somewhat different,” he said, adding, “We don’t believe there’s sufficient evidence in the record for that decision to be made.”