New Jersey BPU Releases Solar REC Transition Straw Proposal
The New Jersey BPU has released a straw proposal developed by Staff concerning changes to the solar REC market and rules due to recent legislation
The Clean Energy Act requires the BPU to adopt rules and regulations to close the [Solar Renewable Energy Certificate] SREC program to new applications upon the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system.
For purposes of the straw proposal, "attainment" means that 5.1% of the actual kilowatt-hours sold in the state are being generated by solar electric power generators. This would result in the following categorization of SRECs:
• Legacy SRECs: SRECs created by projects that filed an SRP [SREC Registration Program] Registration and entered into operation prior to the attainment of the 5.1% transition point.
• Pipeline SRECs: SRECs created by projects that filed an SRP Registration but which have not entered into commercial operation prior to the attainment of the 5.1% transition point.
• Successor SRECs: SRECs created by projects that filed an SRP Registration (or replacement mechanism) after the attainment of the 5.1% transition point. The SREC Successor Program is the program for the allocation and valuation of Successor SRECs. The current SREC program is designated as "current SREC program".
In addition to seeking comment on a series of questions (see questions here), Staff also set forth the following proposal for discussion and consideration:
• Defining attainment as being met when 5.1% of the actual kilowatt-hours sold in the state come from solar electric power generators.
• Recognizing that, based on the definitions proposed above, Pipeline SRECs are those projects that have filed an SRP Registration but have not entered into commercial operation prior to the attainment of the 5.1% trigger. Recognizing that those Pipeline SRECs will not be used for satisfaction of the RPS of the Legacy SRECs, in order to ensure that the current market does not become over-supplied. [sic]
• Developing a process whereby the Pipeline SRECs are eligible for either a transitional program or able to roll into the SREC Successor Program, as developed. As part of the design process, the Board would consider how to ensure that Pipeline SRECs are considered and provided value (including whether to develop a separate program for Pipeline SRECs, or roll those Pipeline SRECs into the SREC Successor Program, as developed).
• Over an 18-month period, closely monitor the price cap to ensure that it is not exceeded, with the recognition that the Board could exercise its authority to reduce the Class I RECs in the event of the cap being exceeded.