Renewable Energy, Cleantech and Climate Change Special Committee

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CLEAN ENERGY FUNDING WORKING GROUP RECOMMENDATIONS REGARDING SOLAR RENEWABLES MARKET AND HEARING

By Phyllis J. Kessler, Esq posted 10-17-2011 05:32 PM

  
The NJ Board of Public Utilities (“BPU” or “Board”), BPU four working groups were established by the BPU to further explore policy proposals made in the draft Energy Master Plan (“EMP”) issued July 7, 2011. The working groups were requested to present recommendations to the BPU to be incorporated in the final EMP. The BPU also established a schedule for hearings to discuss recommendations of the working groups.

This post reviews recommendations made by the Clean Energy Funding Working Group which address issues related to SREC pricing. The working group’s report was issued Monday, October 10, and hearings are scheduled for October 21. At that time, the BPU Commissioners will be present to hear testimony from interested persons on recommendations made in the Clean Energy Funding Working Group’s report. Alternatively, the BPU will take written submissions.

Following is a summary of the Clean Energy Funding working group recommendations regarding the solar energy generation market:

1. The State of New Jersey should focus its efforts towards the transition of renewable energy programs to a market-based system, rather than one that relies on rebates and subsidies. The working group agreed that ratepayers subsidize solar development in the form of SRECs through the price they pay for electricity from third party suppliers or through Basic Generation Service (“BGS”) purchase through their utility. The working group believes that a market-based approach will bring technological advances, and recommends that subsidies be reduced, then removed.

2. The working group was asked to review and comment on the current state of the SREC market and whether its current condition warrants intervention by the BPU. The group was unable to reach agreement on a long term solution, but a majority of the members agreed that accelerating the solar RPS for 2014 of 772 Gwhrs to 2013 (now set at 596 Gwhrs) could stabilize the market in the short term while the BPU seeks a longer term solution.
 
3. The working group agreed that the BPU’s should establish a long term SACP schedule and explore a framework for long term SREC contracts. Some group members support modifying the BGS auction to include a solar tranche or a mix of short and long term contracts to foster longer term solar contracts.

4. The working group recommended that the BPU should not set a floor price for SRECs because it inappropriately guarantees a particular return for the solar developers to the detriment of ratepayers , and it is not feasible to determine what an appropriate floor price should be. However, there were members of the working group that supported a floor price to eliminate the boom or bust cycle and to encourage institutional debt to enter the market to finance solar development.

5. The working group agreed that stability in the SREC market is needed and recommended that the BPU explore options to encourage such stability through modifications to the BGS auction process.


The report can be found at http://nj.gov/emp/pdf/20111011Clean_Energy_Funding.pdf.

Interested persons can either appear in person at the hearings, which will be held at the Rutgers Eco Complex Auditorium (http://ecocomples.rutgers.edu/), 1200 Florence Columbus Rd., Bordentown, NJ 08505 or file written comments to [email protected], or by mail.
 
The notice of the hearing and filing of comments can be found at: http://nj.gov/emp/pdf/2011_oct_nov_publicnoticeddates.pdf


Phyllis J. Kessler, Esq.
Subcommittee Chair for Recent Developments, Renewable Energy, Clean Tech & Climate Change Committee
Energy and Renewable Energy Attorney
Duane Morris, LLP
(212) 471-4713
[email protected]
www.duanemorris.com

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