The RPS bill includes a 2 gigawatt energy storage target and
sets higher goals for solar. The nuclear bill includes a lot of controversy.
The New Jersey state legislature passed three bills on
Thursday that are designed to maintain and enhance access to low-carbon
resources in the Garden State.
One piece of legislation (A3723/S2314)
boosts New Jersey’s renewable portfolio standard to 35 percent by 2025 and 50
percent by 2030 — putting the state in line with clean energy leaders, New
York and California. The same bill also increases New Jersey’s solartarget,
enables the launch of a community solar program and establishes a process to
deploy 2 gigawatts of energy storage by 2030.
Another bill (S1217) directs
the New Jersey Board of Public Utilities to accept applications for an offshore
wind project near Atlantic City with up to 25 megawatts in nameplate capacity.
The third bill (S2313)
approves a $300 million annual subsidy for the state’s remaining nuclear power
plants, a move Public Service Enterprise Group and Exelon say is necessary to
keep their plants in operation. The bill specifically allows for cost recovery
of up to $0.004 per kilowatt-hour within 180 days of enactment. Financial
assistance is offered for up to four years, but does not specify a sunset date.
All three bills passed by a wide margin and Gov. Phil
Murphy (D) is expected to sign them. However, the he could choose to
conditionally veto or amend parts of either bill, sending it back to the
legislature for another vote. A full veto would require lawmakers to pass the
bill again with a two-thirds majority.
If S2313 holds up, New Jersey will become the latest state
to implement a zero-emission certificate (ZEC) program for struggling nuclear
plant operators, following in the steps of New York and
Illinois. ClearView Energy Partners said it expects opponents to challenge
the ZEC program in the U.S. District Court for New Jersey on grounds similar to
lawsuits filed in other states.
So far, however, nuclear subsidy programs in Illinois and
New York have stood
up to legal threats. Furthermore, ClearView says the New Jersey bill was
designed with legal challenges in mind.
Competitive energy suppliers came out strongly opposed to
the New Jersey bill, calling it a “bailout” for the state’s nuclear plants,
which currently make up around 40 percent of the state's energy mix, at the
expense of consumers and fair market practices.
The Electric Power Supply Association said the nuclear
subsidies would “undermine competition in the broader PJM markets and thus
unfairly harm competitors who depend on those markets.” The group called on
Gov. Murphy to veto the new legislation and urged the Federal Energy Regulatory
Commission to swiftly implement “effective countermeasures” to protect the
integrity of PJM’s energy and capacity markets.
PJM has filed two proposals with the FERC seeking to reform
its capacity market, in order to minimize the impact of electricity subsidies
on wholesale market prices — specifically calling out ZEC programs. The
grid operator has asked FERC to choose a policy proposal or suggest an
alternative by June 29.
Separately, the Department of Energy is weighing whether or
not to take emergency action to shore up U.S. nuclear power plants at the
request of Ohio utility FirstEnergy. Secretary Rick Perry said this week an
emergency declaration may
not be “the most appropriate” wayto address the issue, but indicated the
Trump administration is still looking for ways to help struggling coal and
nuclear plants.
Clean energy advocates, meanwhile, had mixed reactions to
New Jersey’s nuclear bill. The Natural Resources Defense Council said it did
not oppose the legislation, while the Sierra Club argued it could undermine the
aims of New Jersey’s renewable energy goals.
“It’s going to put a chilling effect on spending more for
renewable energy, because to build out renewable will cost much more,” said
Jeff Tittel, director of the New Jersey Sierra Club, told the New York
Times. “This bill is about a nuclear subsidy, and that’s the primary purpose.
And that’s the diversion to make you think you’re getting something that you’re
not.”
S2313 is expected to cost ratepayers an additional $30 to
$41 a year, although a portion of those costs could be offset by
savings stemming from the federal tax bill.
Solar supporters were focused largely on celebrating the passage
of the New Jersey RPS bill this week, which they say helped to avoid a market
crash and grow the more than 7,000 solar jobs in the state.
According to Vote Solar, the New Jersey bill will stabilize
the solar market by increasing the behind-the-meter solar target to 5 percent
by 2021, and ending the current solar renewable energy credit trading program
in an orderly way. The bill will also reduce the overall cost of the current
solar RPS by lowering the Solar Alternative Compliance Payment, and commence a
process for determining the next generation of solar incentives in the Garden
State.
"The New Jersey legislature took a major step today
toward protecting thousands of solar jobs that were at risk,” said Sean
Gallagher, vice president of state affairs for the Solar Energy Industries
Association. “We urge Gov. Murphy to swiftly sign the bill into law and get the
state on a path to meet its ambitious clean energy goals."
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