United States: New Jersey Governor Signs Clean Energy Act

Last Updated: May 25 2018
Article by Florence K.S. Davis, David T. Doot and Paul N. Belval

On May 23, New Jersey Governor Phil Murphy signed into law the Act Concerning Clean Energy (the act), Bill A-3723, establishing new clean energy and energy efficiency programs and modifying New Jersey's renewable energy portfolio standards (RPS). The act, which is effective immediately, directs the Board of Public Utilities (Board) to (i) increase the current RPS requirements; (ii) modify or replace the solar renewal energy credit (SREC) program; (iii) establish a process for achieving new energy storage goals; (iv) adopt energy efficiency and peak demand reduction programs; and (v) adopt community solar and remote net energy metering programs.

RPS Modifications

The act provides for significant increases to the New Jersey Class I RPS, which requires electricity suppliers in the state to source a portion of their load from solar, wind, geothermal, wave or tidal, landfill gas, renewable-fueled fuel cell, or certain biomass or small hydroelectric facilities. Beginning January 2020, the Class I requirement will increase from just over 16 percent to 21 percent. The requirement will continue to increase in the following years, to 35 percent by 2025 and 50 percent by 2030. The offshore wind carve-out, which requires that a portion of the Class I requirement be met with Renewable Energy Credits (RECs) from qualified offshore wind projects (ORECs), is also increased, from 1,100 MW to 3,500 MW across all load by 2030.

The Board is required to determine the specifics of how the RPS will be increased from current levels to those required by the act. In addition, the act requires the Board to ensure that the cost to customers of the Class I requirement, excluding the cost of ORECs, does not exceed 9 percent of the total paid for electricity by all customers in New Jersey for energy years 2019, 2020 and 2021, and does not exceed 7 percent of the total paid for electricity by all customers in New Jersey in any year thereafter. The Board is authorized to adjust the Class I requirement to ensure those caps are not exceeded.

The act also amends the RPS requirements so Class I resources may no longer be used to satisfy the Class II requirement, which means that the Class II RPS requirement of 2.5 percent can now be satisfied only through the use of large hydroelectric facilities.

Solar Incentive Transition 

In the case of solar-specific incentives, the act accelerates the schedule of increases to solar RPS requirements beginning in 2019. However, it also ramps down those requirements beginning in 2023. In addition, it reduces the Solar Alternative Compliance Payment (SACP) from $300 to $268 in 2019. As was the case previously, the new SACP will decline each subsequent year, through 2023.

The act also requires the Board to complete a study by May 2020, that evaluates how to modify or replace the solar RPS program. The Board is required to close the SREC program to new applications once suppliers have met the solar RPS requirement of 5.1 percent, and to close the SREC program completely by June 1, 2021. Projects with a nameplate capacity greater than 25 kW applying for the SREC program will be required to post a notice escrow of $40 per kW, not to exceed $40,000, which would be forfeited if the project does not achieve commercial operation within two years following the date of designation by the Board. The act decreases SREC terms for new projects from 15 to 10 years.

The study required by the act provides that the Board will consult with stakeholders to determine whether the Board can modify the SREC program to:

  • reduce costs of achieving solar energy goals;
  • provide for an orderly transition to new/modified program;
  • develop targets for different types of solar (on-site, community, grid-scale, etc.);
  • establish and update market-based maximum incentive payment caps periodically;
  • encourage market-based cost recovery through longer-term contracts and market sales; and
  • use competitive processes (procurements, long-term contracts) if necessary to ensure cost recovery for any portion of solar facility.

Energy Storage 

The act adds New Jersey to the growing number of states implementing energy storage requirements. By May 2019, the Board is required to submit a written report to the governor and the legislature concerning energy storage needs and opportunities in New Jersey. Six months after completing the report, the Board is required to initiate a proceeding to establish a process for achieving the goal of 600 MW of energy storage by 2021, and 2,000 MW of energy storage by 2030.

Energy Efficiency and Demand Reductions

In the area of load reduction, each utility will be required to establish energy efficiency programs and peak demand reduction programs to be approved by the Board, following guidance that the Board is required to adopt by May 2020. The utilities will be required to reduce the use of electricity or natural gas, as applicable, by customers within their territories. For electric utilities, reductions of at least 2 percent of the average annual usage in the prior three years must be achieved within five years of implementing the electric energy efficiency program. Gas utilities will be required to achieve reductions of at least 0.75 percent. The Board may increase those percentages based on a study it is required to complete to review energy savings targets every three years. Utilities will receive incentives for meeting reduction targets or be assessed penalties for failing to meet such targets.

Community Solar; Remote Net Metering

Finally, the act provides for the establishment of community solar and remote net metering programs in New Jersey. By December 19 (210 days after the act was enacted), the Board is required to adopt the rules establishing a community solar pilot program, to be converted into a permanent program within 36 months. The details of implementation have been left to the Board, although the act provides for a maximum project size of 5 MW and requires that projects be located within the same service territory as participating customers. The act also requires the Board to establish an application and approval process to certify public entities to act as a host customer for remote net metering generating facilities.

Conclusion

New Jersey has been a leader in the area of renewable energy for many years. The act has the potential to provide for continued, sustained development of renewables in the state and, along with the bill providing for support of nuclear generating facilities through Zero Emission Credit requirements signed by the governor the same day, has the potential to reshape the New Jersey energy market for years to come.

Click here to read further Insights from Day Pitney

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions