The New Jersey superior court appellate division sided with the BPU in its decision to block the Fishermen's Atlantic City Windfarm (FACW) on grounds it is financially unviable and called into question the financial integrity of Chinese manufacturer XEMC.
XEMC had agreed to own 70% of the project and supply its 5MW turbines. The developer said it intends to appeal the decision to New Jersey's supreme court.
The appeal court said a November 2014 decision by the BPU should stand due to a lack of evidence to overrule it. It said it was unable to change the ruling by a board, which has been authorised to make such a decision, and can only question whether the verdict was lawful.
In March 2014, the BPU unanimously ruled against the FAWC on the grounds that it was not financially viable. It also said the project's backers, which include Chinese turbine manufacturer XEMC, showed "a lack of financial integrity" during the application process.
Project developer Fishermen's Energy then appealed to the court after the BPU denied a motion to reconsider the proposals. In August 2014, the appeals court found in favour of Fishermen's claim, ruling BPU should rethink the plans.
However, in November 2014, BPU rejected the project once again, on the same grounds. In a statement at the time, the BPU said the project "does not provide a net economic and environmental benefit to New Jersey ratepayers".
In February 2015, the state's senate approved a law allowing the demonstration project to proceed without a cost-benefit analysis. The bill would also require the BPU to approve the offshore project, located 4.5 kilometers from Atlantic City.
The developer said it has all the federal and state permits it needs to start construction, and only requires the BPU's approval.
Fishermen's Energy was also awarded a $47 million grant by the Department of Energy in May 2014 as part of a package to help spur offshore wind development.