A proposal to build an off-shore wind farm three miles off Atlantic City was unanimously rejected Wednesday by New Jersey's Board of Public Utilities as too financially risky.

The application by the Cape May-based Fishermen's Energy had been awaiting the board's approval — which would have allowed construction to begin — for three years.

The $188 million plan would have situated five turbines with a combined capacity of 25 megawatts off South Jersey. Atlantic City had issued an easement for the project in 2011.

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The BPU decided the project placed too much potential risk of soaring electric bills for ratepayers. They said the project depended on a mixture of subsidies and federal grants to make sure ratepayers didn't get stuck with sky-high bills.

Rhonda Jackson, a spokeswoman for the company, said a statement was forthcoming, but none was available Wednesday night.

The project had received the support from a number of local agencies and governing bodies, most recently the Atlantic county Board of Chosen Freeholders and the Greater Atlantic City Chamber.

Doug O’Malley, executive director of the advocacy group Environment New Jersey, called the board's decision "foolhardy" in a written statement.

"Gov. (Chris) Christie said New Jersey would be an off-shore wind leader, but this is a blow for off-shore wind in the state," he said. "We are quickly becoming a laggard on off-shore wind and we’re now watching other Atlantic coastal states moving ahead without us."

The New Jersey Division of Rate Counsel, which represents utility customers, initially opposed the Fishermen's Energy's project after a state consultant concluded it would lead to higher electric bills and hurt job growth.

But the rate counsel agreed to support the application last July after the company addressed how much electric customers would have had to pay for power to fund the project. The rate counsel also found that the project met the company's obligation to provide net benefits to the public, including an estimated $150 million in manufacturing, construction and investment dollars.

Atlantic County Utilities Authority President Rick Dovey said he's disappointed by the board's decision.

"Offshore wind is something whose time in the United States will come and it'd be great if it would start in New Jersey," he said. "There are over 75 offshore wind farms in Europe and around the world that have operated safely."

Dovey said the ACUA's own wind farm off the White Horse Pike near Atlantic City generates about 7.5 megawatts, providing 60 percent of the power to run its waste water treatment plan. The balance of its energy is sold to the grid.

"It's been very beneficial economically and environmentally for the ACUA," he said. "It saves us about $500,000 to $600,000 a year in electric costs."

Jeff Tittel of the New Jersey Sierra Club says the board did not consider the benefits of reduced air pollution. He also noted that the company reached an agreement last year with the state Rate Payer Advocate that would reduce project costs by about $20 million.

In October 2008, then-Gov. Jon Corzine announced plans to make New Jersey a world leader in wind energy, calling for the state to triple the amount of wind power it plans to use by 2020 to 3,000 megawatts. That would be 13 percent of New Jersey's total energy, enough to power between 800,000 to just under 1 million homes.

The state's current energy master plan calls for it to develop 1,100 megawatts of offshore power by 2020.

Fishermen's Energy, which launched a test buoy into the ocean in 2010 to gather data on wind conditions and environmental resources in the area, said at the time it had hoped to eventually place 66 turbines offshore, capable of powering 50,000 homes.

The company is considering an appeal.

The Associated Press contributed to this report.

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