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NJ Passes Nuclear Subsidy Bill Limiting Purchase Obligations To Distribution Utilities

April 13,2018

The New Jersey House and Senate both passed S2313, a bill providing subsidies to nuclear units via zero emissions certificates, with the ZEC purchase obligation placed only on electric distribution companies

S2313 provides that, "Each electric public utility in the State shall be required to begin to purchase ZECs on a monthly basis from each selected nuclear power plant with payment to follow within 90 days after the conclusion of the first energy year in which selected nuclear power plants receive ZECs and within 90 days after the conclusion of each subsequent energy year."

S2313 provides that "electric public utility" shall have the same meaning as provided in section 3 of P.L.1999, c.23 (C.48:3-51). That cited section of the public laws defines "electric public utility" as, "a public utility, as that term is defined in R.S.48:2-13, that transmits and distributes electricity to end users within this State." R.S.48:2-13 provides that the term "public utility" shall, "include every individual, copartnership, association, corporation or joint stock company, their lessees, trustees or receivers appointed by any court whatsoever, their successors, heirs or assigns, that now or hereafter may own, operate, manage or control within this State any railroad, street railway, traction railway, autobus, charter bus operation, special bus operation, canal, express, subway, pipeline, gas, electricity distribution, water, oil, sewer, solid waste collection, solid waste disposal, telephone or telegraph system, plant or equipment for public use, under privileges granted or hereafter to be granted by this State or by any political subdivision thereof."

In contrast, 3 of P.L.1999, c.23 (C.48:3-51) also sets forth the definition of an "electric power supplier", which means, "a person or entity that is duly licensed pursuant to the provisions of this act to offer and to assume the contractual and legal responsibility to provide electric generation service to retail customers, and includes load serving entities, marketers and brokers that offer or provide electric generation service to retail customers." The term electric power supplier excludes an electric public utility that provides electric generation service only as a basic generation service

S2313 also provides that, "The board [BPU] shall order the full recovery of all costs associated with the electric public utility’s required procurement of ZECs, and with the board’s implementation of the ZEC program under this act, through a non-bypassable, irrevocable charge imposed on the electric public utility’s retail distribution customers."

Both the New Jersey House and Senate also passed A3723 which increases the RPS and solar RPS, and establishes a community solar pilot program

A3723 accelerates the schedule to require retail electric power suppliers and basic generation service providers to provide a greater percentage of solar energy each year, culminating in 5.1 percent by energy year 2021 and then gradually reducing the schedule thereafter until energy year 2033. The bill also reduces the solar alternative compliance payments (SACP) beginning in energy year 2019 until energy year 2033. For energy year 2019, the SACP is reduced to $268 and is gradually reduced by $10 per year until 2033.

A3723 retains existing statutory language stating that the new solar renewable portfolio standards requirements shall exempt those existing supply contracts which are effective prior to the date of enactment from any increase beyond the number of SRECs mandated by the solar renewable energy portfolio standards requirements that were in effect on the date that the providers executed their existing supply contracts. A3723 further provides that the BPU shall recognize the new solar purchase obligations as a change required by operation of law

A3723 also requires that by January 1, 2020, 21 percent of the kilowatt hours sold in the state by each retail electric power supplier and each basic generation service provider be from Class I renewable energy sources. A3723 requires the BPU to initiate a proceeding to establish renewable energy portfolio standards of 35 percent by energy year 2025 and 50 percent by energy year 2030. The bill imposes a cap, excluding the costs of the offshore wind renewable energy certificate program, on the cost to customers for those requirements for three energy years beginning in energy year 2019, of nine percent of the cost to customers of the total number of kilowatt hours sold in the State, and seven percent of the cost to customers of the total number of kilowatt hours sold in the State in any year thereafter.

See the text of A3723 here

New Jersey   RPS   Solar   Community Solar   Nuclear  

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