Former Board of Utilities member questions logic of NJ’s solar requirements

Former Board of Utilities member questions logic of NJ’s solar requirements Lance Miller, the former chief of policy and planning for New Jersey's Board of Public Utilities (BPU)  from 2007 through 2009, designed the framework and lead development of the 2008 New Jersey Energy Master Plan (EMP).

And the solar renewable energy credits (SRECs) in Governor Christie’s recently adopted EMP are in question.

“As usual, the devil is in the details,” said Miller. “ If we look at what they’re saying, they’re going to accelerate the renewable portfolio standard. It talks about increasing the RPS over the next three years, but it doesn’t say which three years they are. Do they mean energy years 2013, 2014 and 2015 or 2014, 2015 and 2016?”

The solar energy needs for Energy Year 2013 (EY13) is around 500 megawatts, EY14 around 640 megawatts, and EY15 around 800 megawatts. The latest forecast by BPU has EY12 between 640 and 700 megawatts. According to Miller, this takes care of EY13, puts the market at about EY14 and raises questions on existing contracts.

“There’s no adjustment in there for BSG suppliers—third party contracts,” said Miller. “Are they going to be required to meet this…are they going to be grandfathered? All this has impacts.”

BGS suppliers purchased capacity in the February 2011 auction for EY12, EY13, and EY14. Pricing was based on solar requirements at that time.

“If you come in and put more solar requirements in place for EY13, that changes what the bid price would have been,” said Miller. “In the past, those changes have been exempt from the requirements. If you do that, then the question becomes: ‘is that made up for…is that portion just ignored?’ If that’s the case, then the changes aren’t going to have a big impact on the solar increase.”

According to Miller, the same holds true for third-party-supplier contracts that are negotiated at one and two years. If a supplier enters into a contract on Jan. 1, 2012, it runs to Dec. 31, 2013. What will be included as the solar requirement?

While the New Jersey solar market makes its transition, count on the questions being as abundant as the sun’s rays.