SENATE, No. 4275

STATE OF NEW JERSEY

218th LEGISLATURE

INTRODUCED DECEMBER 5, 2019

Sponsored by:

Senator  BOB SMITH

District 17 (Middlesex and Somerset)

SYNOPSIS

     Allows BPU to increase cost to customers of Class I renewable energy requirement for energy years 2022 through 2024, under certain conditions.

CURRENT VERSION OF TEXT

     As introduced.

An Act concerning the cost to customers of Class I renewable energy and amending P.L.1999, c.23.

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

      1.   Section 38 of P.L.1999, c.23 (C.48:3-87) is amended to read as follows:

      38.    a.  The board shall require an electric power supplier or basic generation service provider to disclose on a customer's bill or on customer contracts or marketing materials, a uniform, common set of information about the environmental characteristics of the energy purchased by the customer, including, but not limited to:

     (1)   Its fuel mix, including categories for oil, gas, nuclear, coal, solar, hydroelectric, wind and biomass, or a regional average determined by the board;

     (2)   Its emissions, in pounds per megawatt hour, of sulfur dioxide, carbon dioxide, oxides of nitrogen, and any other pollutant that the board may determine to pose an environmental or health hazard, or an emissions default to be determined by the board; and

     (3)   Any discrete emission reduction retired pursuant to rules and regulations adopted pursuant to P.L.1995, c.188.

      b.   Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment and public hearing, interim standards to implement this disclosure requirement, including, but not limited to:

     (1)   A methodology for disclosure of emissions based on output pounds per megawatt hour;

     (2)   Benchmarks for all suppliers and basic generation service providers to use in disclosing emissions that will enable consumers to perform a meaningful comparison with a supplier's or basic generation service provider's emission levels; and

     (3)   A uniform emissions disclosure format that is graphic in nature and easily understandable by consumers.  The board shall periodically review the disclosure requirements to determine if revisions to the environmental disclosure system as implemented are necessary.

     Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."

      c.    (1)   The board may adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment, an emissions portfolio standard applicable to all electric power suppliers and basic generation service providers, upon a finding that:

     (a)   The standard is necessary as part of a plan to enable the State to meet federal Clean Air Act or State ambient air quality standards; and

     (b)   Actions at the regional or federal level cannot reasonably be expected to achieve the compliance with the federal standards.

     (2)   By July 1, 2009, the board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a greenhouse gas emissions portfolio standard to mitigate leakage or another regulatory mechanism to mitigate leakage applicable to all electric power suppliers and basic generation service providers that provide electricity to customers within the State.  The greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage shall:

     (a)   Allow a transition period, either before or after the effective date of the regulation to mitigate leakage, for a basic generation service provider or electric power supplier to either meet the emissions portfolio standard or other regulatory mechanism to mitigate leakage, or to transfer any customer to a basic generation service provider or electric power supplier that meets the emissions portfolio standard or other regulatory mechanism to mitigate leakage.  If the transition period allowed pursuant to this subparagraph occurs after the implementation of an emissions portfolio standard or other regulatory mechanism to mitigate leakage, the transition period shall be no longer than three years; and

     (b)   Exempt the provision of basic generation service pursuant to a basic generation service purchase and sale agreement effective prior to the date of the regulation.

     Unless the Attorney General or the Attorney General's designee determines that a greenhouse gas emissions portfolio standard would unconstitutionally burden interstate commerce or would be preempted by federal law, the adoption by the board of an electric energy efficiency portfolio standard pursuant to subsection g. of this section, a gas energy efficiency portfolio standard pursuant to subsection h. of this section, or any other enhanced energy efficiency policies to mitigate leakage shall not be considered sufficient to fulfill the requirement of this subsection for the adoption of a greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage.

      d.   Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing, renewable energy portfolio standards that shall require:

     (1)   that two and one-half percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class II renewable energy sources;

     (2)   beginning on January 1, 2020, that  21 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I renewable energy sources.  The board shall increase the required percentage for Class I renewable energy sources so that by January 1, 2025, 35 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources, and by January 1, 2030, 50 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources.  Notwithstanding the requirements of this subsection, the board shall ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection shall not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively, and shall not exceed seven percent of the total paid for electricity by all customers in the State in any energy year thereafter ; provided that, if in energy years 2019 through 2021 the cost to customers of the Class I renewable energy requirement is less than nine percent of the total paid for electricity by all customers in the State, the board may increase the cost to customers of the Class I renewable energy requirement in energy years 2022 through 2024 to a rate greater than seven percent, as long as the total costs to customers for energy years 2019 through 2024 does not exceed the sum of nine percent of the total paid for electricity by all customers in the State in energy years 2019 through 2021 and seven percent of the total paid for electricity by all customers in the State in energy years 2022 through 2024 .  In calculating the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection, the board shall not include the costs of the offshore wind energy certificate program established pursuant to paragraph (4) of this subsection.  The board shall take any steps necessary to prevent the exceedance of the cap on the cost to customers including, but not limited to, adjusting the Class I renewable energy requirement.

     An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection;

     (3)   that the board establish a multi-year schedule, applicable to each electric power supplier or basic generation service provider in this State, beginning with the one-year period commencing on June 1, 2010, and continuing for each subsequent one-year period up to and including, the one-year period commencing on June 1, 2033, that requires the following number or percentage, as the case may be, of kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider to be from solar electric power generators connected to the distribution system in this State:

     EY 2011                 306 Gigawatthours (Gwhrs)

     EY 2012                 442 Gwhrs

     EY 2013                 596 Gwhrs

     EY 2014                 2.050%

     EY 2015                 2.450%

     EY 2016                 2.750%

     EY 2017                 3.000%

     EY 2018                 3.200%

     EY 2019                 4.300%

     EY 2020                 4.900%

     EY 2021                 5.100%

     EY 2022                 5.100%

     EY 2023                 5.100%

     EY 2024                 4.900%

     EY 2025                 4.800%

     EY 2026                 4.500%

     EY 2027                 4.350%

     EY 2028                 3.740%

     EY 2029                 3.070%

     EY 2030                 2.210%

     EY 2031                 1.580%

     EY 2032                 1.400%

     EY 2033                 1.100%

     No later than 180 days after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall adopt rules and regulations to close the 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.  The board shall continue to consider any application filed before the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.).  The board shall provide for an orderly and transparent mechanism that will result in the closing of the existing SREC program on a date certain but no later than June 1, 2021.

     No later than 24 months after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall complete a study that evaluates how to modify or replace the SREC program to encourage the continued efficient and orderly development of solar renewable energy generating sources throughout the State.  The board shall submit the written report thereon to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.  The board shall consult with public utilities, industry experts, regional grid operators, solar power providers and financiers, and other State agencies to determine whether the board can modify the SREC program such that the program will:

     -      continually reduce, where feasible, the cost of achieving the solar energy goals set forth in this subsection;

     -      provide an orderly transition from the SREC program to a new or modified program;

     -      develop megawatt targets for grid connected and distribution systems, including residential and small commercial rooftop systems, community solar systems, and large scale behind the meter systems, as a share of the overall solar energy requirement, which targets the board may modify periodically based on the cost, feasibility, or social impacts of different types of projects;

     -      establish and update market-based maximum incentive payment caps periodically for each of the above categories of solar electric power generation facilities;

     -      encourage and facilitate market-based cost recovery through long-term contracts and energy market sales; and

     -      where cost recovery is needed for any portion of an efficient solar electric power generation facility when costs are not recoverable through wholesale market sales and direct payments from customers, utilize competitive processes such as competitive procurement and long-term contracts where possible to ensure such recovery, without exceeding the maximum incentive payment cap for that category of facility.

     The board shall approve, conditionally approve, or disapprove any application for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), no more than 90 days after receipt by the board of a completed application.  For any such application for a project greater than 25 kilowatts, the board shall require the applicant to post a notice escrow with the board in an amount of $40 per kilowatt of DC nameplate capacity of the facility, not to exceed $40,000.  The notice escrow amount shall be reimbursed to the applicant in full upon either denial of the application by the board or upon commencement of commercial operation of the solar electric power generation facility.  The escrow amount shall be forfeited to the State if the facility is designated as connected to the distribution system pursuant to this subsection but does not commence commercial operation within two years following the date of the designation by the board.

     For all applications for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the SREC term shall be 10 years.

     (a)   The board shall determine an appropriate period of no less than 120 days following the end of an energy year prior to which a provider or supplier must demonstrate compliance for that energy year with the annual renewable portfolio standard;

     (b)   No more than 24 months following the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to investigate approaches to mitigate solar development volatility and prepare and submit, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a report to the Legislature, detailing its findings and recommendations.  As part of the proceeding, the board shall evaluate other techniques used nationally and internationally;

     (c)   The solar renewable portfolio standards requirements in this paragraph shall exempt those existing supply contracts which are effective prior to the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.) 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.  This limited exemption for providers' existing supply contracts shall not be construed to lower the Statewide solar sourcing requirements set forth in this paragraph. Such incremental requirements that would have otherwise been imposed on exempt providers shall be distributed over the providers not subject to the existing supply contract exemption until such time as existing supply contracts expire and all providers are subject to the new requirement in a manner that is competitively neutral among all providers and suppliers.  Notwithstanding any rule or regulation to the contrary, the board shall recognize these new solar purchase obligations as a change required by operation of law and implement the provisions of this subsection in a manner so as to prevent any subsidies between suppliers and providers and to promote competition in the electricity supply industry.

     An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection, or compliance with the requirements of this subsection may be demonstrated to the board by suppliers or providers through the purchase of SRECs.

     The renewable energy portfolio standards adopted by the board pursuant to paragraphs (1) and (2) of this subsection shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."

     The renewable energy portfolio standards adopted by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 30 months after such filing, and shall, thereafter, be amended, adopted or readopted by the board in accordance with the "Administrative Procedure Act"; and

     (4)   within 180 days after the date of enactment of P.L.2010, c.57 (C.48:3-87.1 et al.), that the board establish an offshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from offshore wind energy in order to support at least 3,500 megawatts of generation from qualified offshore wind projects.

     The percentage established by the board pursuant to this paragraph shall serve as an offset to the renewable energy portfolio standard established pursuant to paragraph (2) of this subsection and shall reduce the corresponding Class I renewable energy requirement.

     The percentage established by the board pursuant to this paragraph shall reflect the projected OREC production of each qualified offshore wind project, approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), for 20 years from the commercial operation start date of the qualified offshore wind project which production projection and OREC purchase requirement, once approved by the board, shall not be subject to reduction.

     An electric power supplier or basic generation service provider shall comply with the OREC program established pursuant to this paragraph through the purchase of offshore wind renewable energy certificates at a price and for the time period required by the board.  In the event there are insufficient offshore wind renewable energy certificates available, the electric power supplier or basic generation service provider shall pay an offshore wind alternative compliance payment established by the board.  Any offshore wind alternative compliance payments collected shall be refunded directly to the ratepayers by the electric public utilities.

     The rules established by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

     e.     Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing:

     (1)   net metering standards for electric power suppliers and basic generation service providers.  The standards shall require electric power suppliers and basic generation service providers to offer net metering at non-discriminatory rates to industrial, large commercial, residential and small commercial customers, as those customers are classified or defined by the board, that generate electricity, on the customer's side of the meter, using a Class I renewable energy source, for the net amount of electricity supplied by the electric power supplier or basic generation service provider over an annualized period.  Systems of any sized capacity, as measured in watts, are eligible for net metering.  If the amount of electricity generated by the customer-generator, plus any kilowatt hour credits held over from the previous billing periods, exceeds the electricity supplied by the electric power supplier or basic generation service provider, then the electric power supplier or basic generation service provider, as the case may be, shall credit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point the customer-generator will be compensated for any remaining credits or, if the customer-generator chooses, credit the customer-generator on a real-time basis, at the electric power supplier's or basic generation service provider's avoided cost of wholesale power or the PJM electric power pool's real-time locational marginal pricing rate, adjusted for losses, for the respective zone in the PJM electric power pool.  Alternatively, the customer-generator may execute a bilateral agreement with an electric power supplier or basic generation service provider for the sale and purchase of the customer-generator's excess generation. The customer-generator may be credited on a real-time basis, so long as the customer-generator follows applicable rules prescribed by the PJM electric power pool for its capacity requirements for the net amount of electricity supplied by the electric power supplier or basic generation service provider.  The board may authorize an electric power supplier or basic generation service provider to cease offering net metering to customers that are not already net metered whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals 5.8 percent of the total annual kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider during the prior one-year period;

     (2)   safety and power quality interconnection standards for Class I renewable energy source systems used by a customer-generator that shall be eligible for net metering.

     Such standards or rules shall take into consideration the goals of the New Jersey Energy Master Plan, applicable industry standards, and the standards of other states and the Institute of Electrical and Electronics Engineers. The board shall allow electric public utilities to recover the costs of any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs through either their regulated rates or from the net metering customer-generator;

     (3)   credit or other incentive rules for generators using Class I renewable energy generation systems that connect to New Jersey's electric public utilities' distribution system but who do not net meter; and

     (4)   net metering aggregation standards to require electric public utilities to provide net metering aggregation to single electric public utility customers that operate a solar electric power generation system installed at one of the customer's facilities or on property owned by the customer, provided that any such customer is a State entity, school district, county, county agency, county authority, municipality, municipal agency, or municipal authority.  The standards shall provide that, in order to qualify for net metering aggregation, the customer must operate a solar electric power generation system using a net metering billing account, which system is located on property owned by the customer, provided that: (a) the property is not land that has been actively devoted to agricultural or horticultural use and that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, provided, however, that the municipal planning board of a municipality in which a solar electric power generation system is located may waive the requirement of this subparagraph (a), (b) the system is not an on-site generation facility, (c) all of the facilities of the single customer combined for the purpose of net metering aggregation are facilities owned or operated by the single customer and are located within its territorial jurisdiction except that all of the facilities of a State entity engaged in net metering aggregation shall be located within five miles of one another, and (d) all of those facilities are within the service territory of a single electric public utility and are all served by the same basic generation service provider or by the same electric power supplier.  The standards shall provide that in order to qualify for net metering aggregation, the customer's solar electric power generation system shall be sized so that its annual generation does not exceed the combined metered annual energy usage of the qualified customer facilities, and the qualified customer facilities shall all be in the same customer rate class under the applicable electric public utility tariff.  For the customer's facility or property on which the solar electric generation system is installed, the electricity generated from the customer's solar electric generation system shall be accounted for pursuant to the provisions of paragraph (1) of this subsection to provide that the electricity generated in excess of the electricity supplied by the electric power supplier or the basic generation service provider, as the case may be, for the customer's facility on which the solar electric generation system is installed, over the annualized period, is credited at the electric power supplier's or the basic generation service provider's avoided cost of wholesale power or the PJM electric power pool real-time locational marginal pricing rate.  All electricity used by the customer's qualified facilities, with the exception of the facility or property on which the solar electric power generation system is installed, shall be billed at the full retail rate pursuant to the electric public utility tariff applicable to the customer class of the customer using the electricity.  A customer may contract with a third party to operate a solar electric power generation system, for the purpose of net metering aggregation.  Any contractual relationship entered into for operation of a solar electric power generation system related to net metering aggregation shall include contractual protections that provide for adequate performance and provision for construction and operation for the term of the contract, including any appropriate bonding or escrow requirements.  Any incremental cost to an electric public utility for net metering aggregation shall be fully and timely recovered in a manner to be determined by the board.  The board shall adopt net metering aggregation standards within 270 days after the effective date of P.L.2012, c.24.

     Such rules shall require the board or its designee to issue a credit or other incentive to those generators that do not use a net meter but otherwise generate electricity derived from a Class I renewable energy source and to issue an enhanced credit or other incentive, including, but not limited to, a solar renewable energy credit, to those generators that generate electricity derived from solar technologies.

     Such standards or rules shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."

     f.     The board may assess, by written order and after notice and opportunity for comment, a separate fee to cover the cost of implementing and overseeing an emission disclosure system or emission portfolio standard, which fee shall be assessed based on an electric power supplier's or basic generation service provider's share of the retail electricity supply market.  The board shall not impose a fee for the cost of implementing and overseeing a greenhouse gas emissions portfolio standard adopted pursuant to paragraph (2) of subsection c. of this section.

     g.    The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), an electric energy efficiency  program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each electric public utility to implement energy efficiency measures that reduce electricity usage in the State  pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9).  Nothing in this subsection shall be construed to prevent an electric public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.

     h.    The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a gas energy efficiency program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each gas public utility to implement energy efficiency measures that reduce natural gas usage in the State pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9).  Nothing in this subsection shall be construed to prevent a gas public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.

     i.     After the board establishes a schedule of solar kilowatt-hour sale or purchase requirements pursuant to paragraph (3) of subsection d. of this section, the board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, increased minimum solar kilowatt-hour sale or purchase requirements, provided that the board shall not reduce previously established minimum solar kilowatt-hour sale or purchase requirements, or otherwise impose constraints that reduce the requirements by any means.

     j.     The board shall determine an appropriate level of solar alternative compliance payment, and permit each supplier or provider to submit an SACP to comply with the solar electric generation requirements of paragraph (3) of subsection d. of this section.  The value of the SACP for each Energy Year, for Energy Years 2014 through 2033 per megawatt hour from solar electric generation required pursuant to this section, shall be:

     EY 2014     $339

     EY 2015     $331

     EY 2016     $323

     EY 2017     $315

     EY 2018     $308

     EY 2019     $268

     EY 2020     $258

     EY 2021     $248

     EY 2022     $238

     EY 2023     $228

     EY 2024     $218

     EY 2025     $208

     EY 2026     $198

     EY 2027     $188

     EY 2028     $178

     EY 2029     $168

     EY 2030     $158

     EY 2031     $148

     EY 2032     $138

     EY 2033     $128.

     The board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, an increase in solar alternative compliance payments, provided that the board shall not reduce previously established levels of solar alternative compliance payments, nor shall the board provide relief from the obligation of payment of the SACP by the electric power suppliers or basic generation service providers in any form.  Any SACP payments collected shall be refunded directly to the ratepayers by the electric public utilities.

      k.   The board may allow electric public utilities to offer long-term contracts through a competitive process, direct electric public utility investment and other means of financing, including but not limited to loans, for the purchase of SRECs and the resale of SRECs to suppliers or providers or others, provided that after such contracts have been approved by the board, the board's approvals shall not be modified by subsequent board orders.  If the board allows the offering of contracts pursuant to this subsection, the board may establish a process, after hearing, and opportunity for public comment, to provide that a designated segment of the contracts approved pursuant to this subsection shall be contracts involving solar electric power generation facility projects with a capacity of up to 250 kilowatts.

      l.    The board shall implement its responsibilities under the provisions of this section in such a manner as to:

     (1)   place greater reliance on competitive markets, with the explicit goal of encouraging and ensuring the emergence of new entrants that can foster innovations and price competition;

     (2)   maintain adequate regulatory authority over non-competitive public utility services;

     (3)   consider alternative forms of regulation in order to address changes in the technology and structure of electric public utilities;

     (4)   promote energy efficiency and Class I renewable energy market development, taking into consideration environmental benefits and market barriers;

     (5)   make energy services more affordable for low and moderate income customers;

     (6)   attempt to transform the renewable energy market into one that can move forward without subsidies from the State or public utilities;

     (7)   achieve the goals put forth under the renewable energy portfolio standards;

     (8)   promote the lowest cost to ratepayers; and

     (9)   allow all market segments to participate.

      m.  The board shall ensure the availability of financial incentives under its jurisdiction, including, but not limited to, long-term contracts, loans, SRECs, or other financial support, to ensure market diversity, competition, and appropriate coverage across all ratepayer segments, including, but not limited to, residential, commercial, industrial, non-profit, farms, schools, and public entity customers.

      n.   For projects which are owned, or directly invested in, by a public utility pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.

      o.   The board, in consultation with the Department of Environmental Protection, electric public utilities, the Division of Rate Counsel in, but not of, the Department of the Treasury, affected members of the solar energy industry, and relevant stakeholders, shall periodically consider increasing the renewable energy portfolio standards beyond the minimum amounts set forth in subsection d. of this section, taking into account the cost impacts and public benefits of such increases including, but not limited to:

     (1)   reductions in air pollution, water pollution, land disturbance, and greenhouse gas emissions;

     (2)   reductions in peak demand for electricity and natural gas, and the overall impact on the costs to customers of electricity and natural gas;

     (3)   increases in renewable energy development, manufacturing, investment, and job creation opportunities in this State; and

     (4)   reductions in State and national dependence on the use of fossil fuels.

      p.   Class I RECs and ORECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following two energy years.  SRECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following four energy years.

      q.   (1)  During the energy years of 2014, 2015, and 2016, a solar electric power generation facility project that is not: (a) net metered; (b) an on-site generation facility; (c) qualified for net metering aggregation; or (d) certified as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, as provided pursuant to subsection t. of this section may file an application with the board for approval of a designation pursuant to this subsection that the facility is connected to the distribution system.  An application filed pursuant to this subsection shall include a notice escrow of $40,000 per megawatt of the proposed capacity of the facility.  The board shall approve the designation if: the facility has filed a notice in writing with the board applying for designation pursuant to this subsection, together with the notice escrow; and the capacity of the facility, when added to the capacity of other facilities that have been previously approved for designation prior to the facility's filing under this subsection, does not exceed 80 megawatts in the aggregate for each year. The capacity of any one solar electric power supply project approved pursuant to this subsection shall not exceed 10 megawatts.  No more than 90 days after its receipt of a completed application for designation pursuant to this subsection, the board shall approve, conditionally approve, or disapprove the application.  The notice escrow shall be reimbursed to the facility in full upon either rejection by the board or the facility entering commercial operation, or shall be forfeited to the State if the facility is designated pursuant to this subsection but does not enter commercial operation pursuant to paragraph (2) of this subsection.

     (2)   If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility shall be deemed to be null and void, and the facility shall not be considered connected to the distribution system thereafter.

     (3)   Notwithstanding the provisions of paragraph (2) of this subsection, a solar electric power generation facility project that as of May 31, 2017 was designated as "connected to the distribution system," but failed to commence commercial operations as of that date, shall maintain that designation if it commences commercial operations by May 31, 2018.

      r.    (1)  For all proposed solar electric power generation facility projects except for those solar electric power generation facility projects approved pursuant to subsection q. of this section, and for all projects proposed in energy year 2019 and energy year 2020, the board may approve projects for up to 50 megawatts annually in auctioned capacity in two auctions per year as long as the board is accepting applications.  If the board approves projects for less than 50 megawatts in energy year 2019 or less than 50 megawatts in energy year 2020, the difference in each year shall be carried over into the successive energy year until 100 megawatts of auctioned capacity has been approved by the board pursuant to this subsection.  A proposed solar electric power generation facility that is neither net metered nor an on-site generation facility, may be considered "connected to the distribution system" only upon designation as such by the board, after notice to the public and opportunity for public comment or hearing.  A proposed solar power electric generation facility seeking board designation as "connected to the distribution system" shall submit an application to the board that includes for the proposed facility: the nameplate capacity; the estimated energy and number of SRECs to be produced and sold per year; the estimated annual rate impact on ratepayers; the estimated capacity of the generator as defined by PJM for sale in the PJM capacity market; the point of interconnection; the total project acreage and location; the current land use designation of the property; the type of solar technology to be used; and such other information as the board shall require.

     (2)   The board shall approve the designation of the proposed solar power electric generation facility as "connected to the distribution system" if the board determines that:

     (a)   the SRECs forecasted to be produced by the facility do not have a detrimental impact on the SREC market or on the appropriate development of solar power in the State;

     (b)   the approval of the designation of the proposed facility would not significantly impact the preservation of open space in this State;

     (c)   the impact of the designation on electric rates and economic development is beneficial; and

     (d)   there will be no impingement on the ability of an electric public utility to maintain its property and equipment in such a condition as to enable it to provide safe, adequate, and proper service to each of its customers.

     (3)   The board shall act within 90 days of its receipt of a completed application for designation of a solar power electric generation facility as "connected to the distribution system," to either approve, conditionally approve, or disapprove the application. If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility as "connected to the distribution system" shall be deemed to be null and void, and the facility shall thereafter be considered not "connected to the distribution system."

      s.    In addition to any other requirements of P.L.1999, c.23 or any other law, rule, regulation or order, a solar electric power generation facility that is not net metered or an on-site generation facility and which is located on land that has been actively devoted to agricultural or horticultural use that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, shall only be considered "connected to the distribution system" if (1) the board approves the facility's designation pursuant to subsection q. of this section; or (2) (a) PJM issued a System Impact Study for the facility on or before June 30, 2011, (b) the facility files a notice with the board within 60 days of the effective date of P.L.2012, c.24, indicating its intent to qualify under this subsection, and (c) the facility has been approved as "connected to the distribution system" by the board.  Nothing in this subsection shall limit the board's authority concerning the review and oversight of facilities, unless such facilities are exempt from such review as a result of having been approved pursuant to subsection q. of this section.

      t.    (1)  No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall, in consultation with the Department of Environmental Protection and the New Jersey Economic Development Authority, and, after notice and opportunity for public comment and public hearing, complete a proceeding to establish a program to provide SRECs to owners of solar electric power generation facility projects certified by the board, in consultation with the Department of Environmental Protection, as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, including those owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1).  Projects certified under this subsection shall be considered "connected to the distribution system", shall not require such designation by the board, and shall not be subject to board review required pursuant to subsections q. and r. of this section.  Notwithstanding the provisions of section 3 of P.L.1999, c.23 (C.48:3-51) or any other law, rule, regulation, or order to the contrary, for projects certified under this subsection, the board shall establish a financial incentive that is designed to supplement the SRECs generated by the facility in order to cover the additional cost of constructing and operating a solar electric power generation facility on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility.  Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provision of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers. The issuance of SRECs for all solar electric power generation facility projects pursuant to this subsection shall be deemed "Board of Public Utilities financial assistance" as provided under section 1 of P.L.2009, c.89 (C.48:2-29.47).

     (2)   Notwithstanding the provisions of the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.) or any other law, rule, regulation, or order to the contrary, the board, in consultation with the Department of Environmental Protection, may find that a person who operates a solar electric power generation facility project that has commenced operation on or after the effective date of P.L.2012, c.24, which project is certified by the board, in consultation with the Department of Environmental Protection pursuant to paragraph (1) of this subsection, as being located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility, which projects shall include, but not be limited to projects located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), or a person who owns property acquired on or after the effective date of P.L.2012, c.24 on which such a solar electric power generation facility project is constructed and operated, shall not be liable for cleanup and removal costs to the Department of Environmental Protection or to any other person for the discharge of a hazardous substance provided that:

     (a)   the person acquired or leased the real property after the discharge of that hazardous substance at the real property;

     (b)   the person did not discharge the hazardous substance, is not in any way responsible for the hazardous substance, and is not a successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g);

     (c)   the person, within 30 days after acquisition of the property, gave notice of the discharge to the Department of Environmental Protection in a manner the Department of Environmental Protection prescribes;

     (d)   the person does not disrupt or change, without prior written permission from the Department of Environmental Protection, any engineering or institutional control that is part of a remedial action for the contaminated site or any landfill closure or post-closure requirement;

     (e)   the person does not exacerbate the contamination at the property;

     (f)   the person does not interfere with any necessary remediation of the property;

     (g)   the person complies with any regulations and any permit the Department of Environmental Protection issues pursuant to section 19 of P.L.2009, c.60 (C.58:10C-19) or paragraph (2) of subsection a. of section 6 of P.L.1970, c.39 (C.13:1E-6);

     (h)   with respect to an area of historic fill, the person has demonstrated pursuant to a preliminary assessment and site investigation, that hazardous substances have not been discharged; and

     (i)    with respect to a properly closed sanitary landfill facility, no person who owns or controls the facility receives, has received, or will receive, with respect to such facility, any funds from any post-closure escrow account established pursuant to section 10 of P.L.1981, c.306 (C.13:1E-109) for the closure and monitoring of the facility.

     Only the person who is liable to clean up and remove the contamination pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g) and who does not have a defense to liability pursuant to subsection d. of that section shall be liable for cleanup and removal costs.

     u.    No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to establish a registration program.  The registration program shall require the owners of solar electric power generation facility projects connected to the distribution system to make periodic milestone filings with the board in a manner and at such times as determined by the board to provide full disclosure and transparency regarding the overall level of development and construction activity of those projects Statewide.

     v.    The issuance of SRECs for all solar electric power generation facility projects pursuant to this section, for projects connected to the distribution system with a capacity of one megawatt or greater, shall be deemed "Board of Public Utilities financial assistance" as provided pursuant to section 1 of P.L.2009, c.89 (C.48:2-29.47). 

     w.   No more than 270 days after the date of enactment of P.L.2012, c.24, the board shall, after notice and opportunity for public comment and public hearing, complete a proceeding to consider whether to establish a program to provide, to owners of solar electric power generation facility projects certified by the board as being three megawatts or greater in capacity and being net metered, including facilities which are owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), a financial incentive that is designed to supplement the SRECs generated by the facility to further the goal of improving the economic competitiveness of commercial and industrial customers taking power from such projects.  If the board determines to establish such a program pursuant to this subsection, the board may establish a financial incentive to provide that the board shall issue one SREC for no less than every 750 kilowatt-hours of solar energy generated by the certified projects. Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provisions of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers.

     x.    Solar electric power generation facility projects that are located on an existing or proposed commercial, retail, industrial, municipal, professional, recreational, transit, commuter, entertainment complex, multi-use, or mixed-use parking lot with a capacity to park 350 or more vehicles where the area to be utilized for the facility is paved, or an impervious surface may be owned or operated by an electric public utility and may be approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1).

(cf:  P.L.2018, c.17, s.2)

     2.    This act shall take effect immediately.

STATEMENT

     This bill would allow the Board of Public Utilities (BPU) to increase the cost to customers of the State’s Class I renewable energy requirement during energy years 2022 through 2024 above the current limit of seven percent of the total paid for electricity by all customers in the State, under certain conditions.

     Under the bill, the BPU could only make this increase if the cost of the Class I renewable energy requirement is less than nine percent of total energy costs during energy years 2019 through 2021 (the limit set by current law).  In addition, the total amount paid by customers during energy years 2019 through 2024 could not exceed the sum of: (1) nine percent of total energy costs during energy years 2019 through 2021; and (2) seven percent of total energy costs during energy years 2022 through 2024, i.e. the maximum amount allowed by current law over that six-year period.

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Sponsored by:

Assemblyman  JOHN F. MCKEON

District 27 (Essex and Morris)

SYNOPSIS

     Revises law concerning Class I and solar renewable energy portfolio standards, solar renewable energy certificates, and net metering.

CURRENT VERSION OF TEXT

     As introduced.

An Act concerning Class I and solar renewable energy and net metering, and amending P.L.1999, c.23.

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

     1.  Section 38 of P.L.1999, c.23 (C.48:3-87) is amended to read as follows:

     38.  a.  The board shall require an electric power supplier or basic generation service provider to disclose on a customer's bill or on customer contracts or marketing materials, a uniform, common set of information about the environmental characteristics of the energy purchased by the customer, including, but not limited to:

     (1)   Its fuel mix, including categories for oil, gas, nuclear, coal, solar, hydroelectric, wind and biomass, or a regional average determined by the board;

     (2)   Its emissions, in pounds per megawatt hour, of sulfur dioxide, carbon dioxide, oxides of nitrogen, and any other pollutant that the board may determine to pose an environmental or health hazard, or an emissions default to be determined by the board; and

     (3)   Any discrete emission reduction retired pursuant to rules and regulations adopted pursuant to P.L.1995, c.188.

     b.    Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment and public hearing, interim standards to implement this disclosure requirement, including, but not limited to:

     (1)   A methodology for disclosure of emissions based on output pounds per megawatt hour;

     (2)   Benchmarks for all suppliers and basic generation service providers to use in disclosing emissions that will enable consumers to perform a meaningful comparison with a supplier's or basic generation service provider's emission levels; and

     (3)   A uniform emissions disclosure format that is graphic in nature and easily understandable by consumers.  The board shall periodically review the disclosure requirements to determine if revisions to the environmental disclosure system as implemented are necessary.

     Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."

     c.  (1)  The board may adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment, an emissions portfolio standard applicable to all electric power suppliers and basic generation service providers, upon a finding that:

     (a)   The standard is necessary as part of a plan to enable the State to meet federal Clean Air Act or State ambient air quality standards; and

     (b)   Actions at the regional or federal level cannot reasonably be expected to achieve the compliance with the federal standards.

     (2)   By July 1, 2009, the board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a greenhouse gas emissions portfolio standard to mitigate leakage or another regulatory mechanism to mitigate leakage applicable to all electric power suppliers and basic generation service providers that provide electricity to customers within the State.  The greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage shall:

     (a)   Allow a transition period, either before or after the effective date of the regulation to mitigate leakage, for a basic generation service provider or electric power supplier to either meet the emissions portfolio standard or other regulatory mechanism to mitigate leakage, or to transfer any customer to a basic generation service provider or electric power supplier that meets the emissions portfolio standard or other regulatory mechanism to mitigate leakage.  If the transition period allowed pursuant to this subparagraph occurs after the implementation of an emissions portfolio standard or other regulatory mechanism to mitigate leakage, the transition period shall be no longer than three years; and

     (b)   Exempt the provision of basic generation service pursuant to a basic generation service purchase and sale agreement effective prior to the date of the regulation.

     Unless the Attorney General or the Attorney General's designee determines that a greenhouse gas emissions portfolio standard would unconstitutionally burden interstate commerce or would be preempted by federal law, the adoption by the board of an electric energy efficiency portfolio standard pursuant to subsection g. of this section, a gas energy efficiency portfolio standard pursuant to subsection h. of this section, or any other enhanced energy efficiency policies to mitigate leakage shall not be considered sufficient to fulfill the requirement of this subsection for the adoption of a greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage.

     d.    Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing, renewable energy portfolio standards that shall require:

     (1)   that two and one-half percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class II renewable energy sources;

     (2)   beginning on January 1, 2020, that  21 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I renewable energy sources.  The board shall increase the required percentage for Class I renewable energy sources so that by January 1, 2025, 35 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources, and by January 1, 2030, 50 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources. 

     Notwithstanding the requirements of this subsection, the board shall ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection :

     (a)  shall not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively [,] ; and

     (b)  shall not exceed [seven percent] the following percentages of the total paid for electricity by all customers in the State [in any] for energy year [thereafter] 2022 through energy year 2037:

     EY 2022                 8.5%

     EY 2023                 8.5%

     EY 2024                 8%

     EY 2025                 8%

     EY 2026                 7.5%

     EY 2027                 7.5%

     EY 2028                 7%

     EY 2029                 7%

     EY 2030                 6.5%

     EY 2031                 6.5%

     EY 2032                 6%

     EY 2033                 6%

     EY 2034                 5.5%

     EY 2035                 5.5%

     EY 2036                 5%

     EY 2037                 5% . 

     In calculating the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection, the board shall not include the costs of the offshore wind energy certificate program established pursuant to paragraph (4) of this subsection.  The board shall take any steps necessary to prevent the exceedance of the cap on the cost to customers including, but not limited to, adjusting the Class I renewable energy requirement.

     An electric power supplier or basic generation service provider may satisfy the requirements of this subsection for Class I renewable energy by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection or by submitting a Class I alternative compliance payment in the amount of $10 for energy year 2021 through energy year 2037.  Any Class I alternative compliance payment collected pursuant to this paragraph shall be refunded directly to the ratepayers ;

     (3)   that the board establish a multi-year schedule, applicable to each electric power supplier or basic generation service provider in this State, beginning with the one-year period commencing on June 1, 2010, and continuing for each subsequent one-year period up to and including, the one-year period commencing on June 1, [2033] 2037 , that requires the following number or percentage, as the case may be, of kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider to be from solar electric power generators connected to the distribution system in this State:

     EY 2011                 306 Gigawatthours (Gwhrs)

     EY 2012                 442 Gwhrs

     EY 2013                 596 Gwhrs

     EY 2014                 2.050%

     EY 2015                 2.450%

     EY 2016                 2.750%

     EY 2017                 3.000%

     EY 2018                 3.200%

     EY 2019                 4.300%

     EY 2020                 4.900%

     EY 2021                 [5.100%] 5.25%

     EY 2022                 [5.100%] 5.88%

     EY 2023                 [5.100%] 6.05%

     EY 2024                 [4.900%] 6.29%

     EY 2025                 [4.800%] 6.58%

     EY 2026                 [4.500%] 6.39%

     EY 2027                 [4.350%] 6.36%

     EY 2028                 [3.740%] 6.17%

     EY 2029                 [3.070%] 5.82%

     EY 2030                 [2.210%] 5.49%

     EY 2031                 [1.580%] 4.88%

     EY 2032                 [1.400%] 4.36%

     EY 2033                 [1.100%] 3.87%

     EY 2034                 3.87%

     EY 2035                 3.87%

     EY 2036                 3.87%

     EY 2037                 3.87%

     [No later than 180 days after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall adopt rules and regulations to close the 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.  The board shall continue to consider any application filed before the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.).  The board shall provide for an orderly and transparent mechanism that will result in the closing of the existing SREC program on a date certain but no later than June 1, 2021.]

     No later than 24 months after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall complete a study [that evaluates how to modify or replace the SREC program to encourage the continued efficient and orderly development of solar renewable energy generating sources throughout the State.  The board shall submit the written report thereon to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.  The board shall consult with public utilities, industry experts, regional grid operators, solar power providers and financiers, and other State agencies to determine whether the board can modify the SREC program such that the program will:

     -continually reduce, where feasible, the cost of achieving the solar energy goals set forth in this subsection;

     -provide an orderly transition from the SREC program to a new or modified program;

     -] to develop megawatt targets for grid connected and distribution systems, including residential and small commercial rooftop systems, community solar systems, and large scale behind the meter systems, as a share of the overall solar energy requirement, which targets the board may modify periodically based on the cost, feasibility, or social impacts of different types of projects [;

     -establish and update market-based maximum incentive payment caps periodically for each of the above categories of solar electric power generation facilities;

     -encourage and facilitate market-based cost recovery through long-term contracts and energy market sales; and

     -where cost recovery is needed for any portion of an efficient solar electric power generation facility when costs are not recoverable through wholesale market sales and direct payments from customers, utilize competitive processes such as competitive procurement and long-term contracts where possible to ensure such recovery, without exceeding the maximum incentive payment cap for that category of facility] .  The board shall submit a written report thereon to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature . 

     The board shall approve, conditionally approve, or disapprove any application for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), no more than 90 days after receipt by the board of a completed application.  For any such application for a project greater than 25 kilowatts, the board shall require the applicant to post a notice escrow with the board in an amount of $40 per kilowatt of DC nameplate capacity of the facility, not to exceed $40,000.  The notice escrow amount shall be reimbursed to the applicant in full upon either denial of the application by the board or upon commencement of commercial operation of the solar electric power generation facility.  The escrow amount shall be forfeited to the State if the facility is designated as connected to the distribution system pursuant to this subsection but does not commence commercial operation within two years following the date of the designation by the board.

     For all applications for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the SREC term shall be 10 years.

     (a)   The board shall determine an appropriate period of no less than 120 days following the end of an energy year prior to which a provider or supplier must demonstrate compliance for that energy year with the annual renewable portfolio standard;

     (b)   No more than 24 months following the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to investigate approaches to mitigate solar development volatility and prepare and submit, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a report to the Legislature, detailing its findings and recommendations.  As part of the proceeding, the board shall evaluate other techniques used nationally and internationally;

     (c)   The solar renewable portfolio standards requirements in this paragraph shall exempt those existing supply contracts which are effective prior to the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.) 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.  This limited exemption for providers' existing supply contracts shall not be construed to lower the Statewide solar sourcing requirements set forth in this paragraph.  Such incremental requirements that would have otherwise been imposed on exempt providers shall be distributed over the providers not subject to the existing supply contract exemption until such time as existing supply contracts expire and all providers are subject to the new requirement in a manner that is competitively neutral among all providers and suppliers.  Notwithstanding any rule or regulation to the contrary, the board shall recognize these new solar purchase obligations as a change required by operation of law and implement the provisions of this subsection in a manner so as to prevent any subsidies between suppliers and providers and to promote competition in the electricity supply industry.

     An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection, or compliance with the requirements of this subsection may be demonstrated to the board by suppliers or providers through the purchase of SRECs.

     The renewable energy portfolio standards adopted by the board pursuant to paragraphs (1) and (2) of this subsection shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."

     The renewable energy portfolio standards adopted by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 30 months after such filing, and shall, thereafter, be amended, adopted or readopted by the board in accordance with the "Administrative Procedure Act"; and

     (4)   within 180 days after the date of enactment of P.L.2010, c.57 (C.48:3-87.1 et al.), that the board establish an offshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from offshore wind energy in order to support at least 3,500 megawatts of generation from qualified offshore wind projects.

     The percentage established by the board pursuant to this paragraph shall serve as an offset to the renewable energy portfolio standard established pursuant to paragraph (2) of this subsection and shall reduce the corresponding Class I renewable energy requirement.

     The percentage established by the board pursuant to this paragraph shall reflect the projected OREC production of each qualified offshore wind project, approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), for 20 years from the commercial operation start date of the qualified offshore wind project which production projection and OREC purchase requirement, once approved by the board, shall not be subject to reduction.

     An electric power supplier or basic generation service provider shall comply with the OREC program established pursuant to this paragraph through the purchase of offshore wind renewable energy certificates at a price and for the time period required by the board.  In the event there are insufficient offshore wind renewable energy certificates available, the electric power supplier or basic generation service provider shall pay an offshore wind alternative compliance payment established by the board.  Any offshore wind alternative compliance payments collected shall be refunded directly to the ratepayers by the electric public utilities.

     The rules established by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

     e.     Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing:

     (1)   net metering standards for electric power suppliers and basic generation service providers.  The standards shall require electric power suppliers and basic generation service providers to offer net metering at non-discriminatory rates to industrial, large commercial, residential and small commercial customers, as those customers are classified or defined by the board, that generate electricity, on the customer's side of the meter, using a Class I renewable energy source, for the net amount of electricity supplied by the electric power supplier or basic generation service provider over an annualized period.  Systems of any sized capacity, as measured in watts, are eligible for net metering.  If the amount of electricity generated by the customer-generator, plus any kilowatt hour credits held over from the previous billing periods, exceeds the electricity supplied by the electric power supplier or basic generation service provider, then the electric power supplier or basic generation service provider, as the case may be, shall credit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point the customer-generator will be compensated for any remaining credits or, if the customer-generator chooses, credit the customer-generator on a real-time basis, at the electric power supplier's or basic generation service provider's avoided cost of wholesale power or the PJM electric power pool's real-time locational marginal pricing rate, adjusted for losses, for the respective zone in the PJM electric power pool.  Alternatively, the customer-generator may execute a bilateral agreement with an electric power supplier or basic generation service provider for the sale and purchase of the customer-generator's excess generation. The customer-generator may be credited on a real-time basis, so long as the customer-generator follows applicable rules prescribed by the PJM electric power pool for its capacity requirements for the net amount of electricity supplied by the electric power supplier or basic generation service provider.  The board may authorize an electric power supplier or basic generation service provider to cease offering net metering to customers that are not already net metered whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals [5.8] 15 percent of the total annual kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider during the prior one-year period;

     (2)   safety and power quality interconnection standards for Class I renewable energy source systems used by a customer-generator that shall be eligible for net metering.

     Such standards or rules shall take into consideration the goals of the New Jersey Energy Master Plan, applicable industry standards, and the standards of other states and the Institute of Electrical and Electronics Engineers.  The board shall allow electric public utilities to recover the costs of any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs through either their regulated rates or from the net metering customer-generator;

     (3)   credit or other incentive rules for generators using Class I renewable energy generation systems that connect to New Jersey's electric public utilities' distribution system but who do not net meter; and

     (4)   net metering aggregation standards to require electric public utilities to provide net metering aggregation to single electric public utility customers that operate a solar electric power generation system installed at one of the customer's facilities or on property owned by the customer, provided that any such customer is a State entity, school district, county, county agency, county authority, municipality, municipal agency, or municipal authority.  The standards shall provide that, in order to qualify for net metering aggregation, the customer must operate a solar electric power generation system using a net metering billing account, which system is located on property owned by the customer, provided that: (a) the property is not land that has been actively devoted to agricultural or horticultural use and that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, provided, however, that the municipal planning board of a municipality in which a solar electric power generation system is located may waive the requirement of this subparagraph (a), (b) the system is not an on-site generation facility, (c) all of the facilities of the single customer combined for the purpose of net metering aggregation are facilities owned or operated by the single customer and are located within its territorial jurisdiction except that all of the facilities of a State entity engaged in net metering aggregation shall be located within five miles of one another, and (d) all of those facilities are within the service territory of a single electric public utility and are all served by the same basic generation service provider or by the same electric power supplier.  The standards shall provide that in order to qualify for net metering aggregation, the customer's solar electric power generation system shall be sized so that its annual generation does not exceed the combined metered annual energy usage of the qualified customer facilities, and the qualified customer facilities shall all be in the same customer rate class under the applicable electric public utility tariff.  For the customer's facility or property on which the solar electric generation system is installed, the electricity generated from the customer's solar electric generation system shall be accounted for pursuant to the provisions of paragraph (1) of this subsection to provide that the electricity generated in excess of the electricity supplied by the electric power supplier or the basic generation service provider, as the case may be, for the customer's facility on which the solar electric generation system is installed, over the annualized period, is credited at the electric power supplier's or the basic generation service provider's avoided cost of wholesale power or the PJM electric power pool real-time locational marginal pricing rate.  All electricity used by the customer's qualified facilities, with the exception of the facility or property on which the solar electric power generation system is installed, shall be billed at the full retail rate pursuant to the electric public utility tariff applicable to the customer class of the customer using the electricity.  A customer may contract with a third party to operate a solar electric power generation system, for the purpose of net metering aggregation.  Any contractual relationship entered into for operation of a solar electric power generation system related to net metering aggregation shall include contractual protections that provide for adequate performance and provision for construction and operation for the term of the contract, including any appropriate bonding or escrow requirements.  Any incremental cost to an electric public utility for net metering aggregation shall be fully and timely recovered in a manner to be determined by the board.  The board shall adopt net metering aggregation standards within 270 days after the effective date of P.L.2012, c.24.

     Such rules shall require the board or its designee to issue a credit or other incentive to those generators that do not use a net meter but otherwise generate electricity derived from a Class I renewable energy source and to issue an enhanced credit or other incentive, including, but not limited to, a solar renewable energy credit, to those generators that generate electricity derived from solar technologies.

     Such standards or rules shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."

     f.     The board may assess, by written order and after notice and opportunity for comment, a separate fee to cover the cost of implementing and overseeing an emission disclosure system or emission portfolio standard, which fee shall be assessed based on an electric power supplier's or basic generation service provider's share of the retail electricity supply market.  The board shall not impose a fee for the cost of implementing and overseeing a greenhouse gas emissions portfolio standard adopted pursuant to paragraph (2) of subsection c. of this section.

     g.    The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), an electric energy efficiency  program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each electric public utility to implement energy efficiency measures that reduce electricity usage in the State  pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9).  Nothing in this subsection shall be construed to prevent an electric public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.

     h.    The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a gas energy efficiency program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each gas public utility to implement energy efficiency measures that reduce natural gas usage in the State pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9).  Nothing in this subsection shall be construed to prevent a gas public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.

     i.     After the board establishes a schedule of solar kilowatt-hour sale or purchase requirements pursuant to paragraph (3) of subsection d. of this section, the board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, increased minimum solar kilowatt-hour sale or purchase requirements, provided that the board shall not reduce previously established minimum solar kilowatt-hour sale or purchase requirements, or otherwise impose constraints that reduce the requirements by any means.

     j.     The board shall determine an appropriate level of solar alternative compliance payment, and permit each supplier or provider to submit an SACP to comply with the solar electric generation requirements of paragraph (3) of subsection d. of this section.  The value of the SACP for each Energy Year, for Energy Years 2014 through [2033] 2037 per megawatt hour from solar electric generation required pursuant to this section, shall be:

     EY 2014     $339

     EY 2015     $331

     EY 2016     $323

     EY 2017     $315

     EY 2018     $308

     EY 2019     $268

     EY 2020     $258

     EY 2021     [$248] $220.51

     EY 2022     [$238] $188.49

     EY 2023     [$228] $186.71

     EY 2024     [$218] $170.77

     EY 2025     [$208] $144.28

     EY 2026     [$198] $138.82

     EY 2027     [$188] $142.12

     EY 2028     [$178] $135.96

     EY 2029     [$168] $146.34

     EY 2030     [$158] $113.68

     EY 2031     [$148] $129.99

     EY 2032     [$138] $128.28

     EY 2033     [$128] $120

     EY 2034     $120

     EY 2035     $120

     EY 2036     $120

     EY 2037     $120 .

     The board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, an increase in solar alternative compliance payments, provided that the board shall not reduce previously established levels of solar alternative compliance payments, nor shall the board provide relief from the obligation of payment of the SACP by the electric power suppliers or basic generation service providers in any form.  Any SACP payments collected shall first be made available once a year in an auction format approved by the board to owners of solar electric generation facilities possessing unsold SRECs, and following the annual auction any remaining SACP payments shall be refunded directly to the ratepayers by the electric public utilities.

     k.    The board may allow electric public utilities to offer long-term contracts through a competitive process, direct electric public utility investment and other means of financing, including but not limited to loans, for the purchase of SRECs and the resale of SRECs to suppliers or providers or others, provided that after such contracts have been approved by the board, the board's approvals shall not be modified by subsequent board orders.  If the board allows the offering of contracts pursuant to this subsection, the board may establish a process, after hearing, and opportunity for public comment, to provide that a designated segment of the contracts approved pursuant to this subsection shall be contracts involving solar electric power generation facility projects with a capacity of up to 250 kilowatts.

     l.     The board shall implement its responsibilities under the provisions of this section in such a manner as to:

     (1)   place greater reliance on competitive markets, with the explicit goal of encouraging and ensuring the emergence of new entrants that can foster innovations and price competition;

     (2)   maintain adequate regulatory authority over non-competitive public utility services;

     (3)   consider alternative forms of regulation in order to address changes in the technology and structure of electric public utilities;

     (4)   promote energy efficiency and Class I renewable energy market development, taking into consideration environmental benefits and market barriers;

     (5)   make energy services more affordable for low and moderate income customers;

     (6)   attempt to transform the renewable energy market into one that can move forward without subsidies from the State or public utilities;

     (7)   achieve the goals put forth under the renewable energy portfolio standards;

     (8)   promote the lowest cost to ratepayers; and

     (9)   allow all market segments to participate.

     m.   The board shall ensure the availability of financial incentives under its jurisdiction, including, but not limited to, long-term contracts, loans, SRECs, or other financial support, to ensure market diversity, competition, and appropriate coverage across all ratepayer segments, including, but not limited to, residential, commercial, industrial, non-profit, farms, schools, and public entity customers.

     n.    For projects which are owned, or directly invested in, by a public utility pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.

     o.    The board, in consultation with the Department of Environmental Protection, electric public utilities, the Division of Rate Counsel in, but not of, the Department of the Treasury, affected members of the solar energy industry, and relevant stakeholders, shall periodically consider increasing the renewable energy portfolio standards beyond the minimum amounts set forth in subsection d. of this section, taking into account the cost impacts and public benefits of such increases including, but not limited to:

     (1)   reductions in air pollution, water pollution, land disturbance, and greenhouse gas emissions;

     (2)   reductions in peak demand for electricity and natural gas, and the overall impact on the costs to customers of electricity and natural gas;

     (3)   increases in renewable energy development, manufacturing, investment, and job creation opportunities in this State; and

     (4)   reductions in State and national dependence on the use of fossil fuels.

     p.    Class I RECs and ORECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following two energy years.  SRECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following four energy years.

     q.  (1)  During the energy years of 2014, 2015, and 2016, a solar electric power generation facility project that is not: (a) net metered; (b) an on-site generation facility; (c) qualified for net metering aggregation; or (d) certified as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, as provided pursuant to subsection t. of this section may file an application with the board for approval of a designation pursuant to this subsection that the facility is connected to the distribution system.  An application filed pursuant to this subsection shall include a notice escrow of $40,000 per megawatt of the proposed capacity of the facility.  The board shall approve the designation if: the facility has filed a notice in writing with the board applying for designation pursuant to this subsection, together with the notice escrow; and the capacity of the facility, when added to the capacity of other facilities that have been previously approved for designation prior to the facility's filing under this subsection, does not exceed 80 megawatts in the aggregate for each year.  The capacity of any one solar electric power supply project approved pursuant to this subsection shall not exceed 10 megawatts.  No more than 90 days after its receipt of a completed application for designation pursuant to this subsection, the board shall approve, conditionally approve, or disapprove the application.  The notice escrow shall be reimbursed to the facility in full upon either rejection by the board or the facility entering commercial operation, or shall be forfeited to the State if the facility is designated pursuant to this subsection but does not enter commercial operation pursuant to paragraph (2) of this subsection.

     (2)   If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility shall be deemed to be null and void, and the facility shall not be considered connected to the distribution system thereafter.

     (3)   Notwithstanding the provisions of paragraph (2) of this subsection, a solar electric power generation facility project that as of May 31, 2017 was designated as "connected to the distribution system," but failed to commence commercial operations as of that date, shall maintain that designation if it commences commercial operations by May 31, 2018.

     r.  (1) For all proposed solar electric power generation facility projects except for those solar electric power generation facility projects approved pursuant to subsection q. of this section, and for all projects proposed in energy year 2019 and energy year 2020, the board may approve projects for up to 50 megawatts annually in auctioned capacity in two auctions per year as long as the board is accepting applications.  If the board approves projects for less than 50 megawatts in energy year 2019 or less than 50 megawatts in energy year 2020, the difference in each year shall be carried over into the successive energy year until 100 megawatts of auctioned capacity has been approved by the board pursuant to this subsection.  A proposed solar electric power generation facility that is neither net metered nor an on-site generation facility, may be considered "connected to the distribution system" only upon designation as such by the board, after notice to the public and opportunity for public comment or hearing.  A proposed solar power electric generation facility seeking board designation as "connected to the distribution system" shall submit an application to the board that includes for the proposed facility: the nameplate capacity; the estimated energy and number of SRECs to be produced and sold per year; the estimated annual rate impact on ratepayers; the estimated capacity of the generator as defined by PJM for sale in the PJM capacity market; the point of interconnection; the total project acreage and location; the current land use designation of the property; the type of solar technology to be used; and such other information as the board shall require.

     (2)   The board shall approve the designation of the proposed solar power electric generation facility as "connected to the distribution system" if the board determines that:

     (a)   the SRECs forecasted to be produced by the facility do not have a detrimental impact on the SREC market or on the appropriate development of solar power in the State;

     (b)   the approval of the designation of the proposed facility would not significantly impact the preservation of open space in this State;

     (c)   the impact of the designation on electric rates and economic development is beneficial; and

     (d)   there will be no impingement on the ability of an electric public utility to maintain its property and equipment in such a condition as to enable it to provide safe, adequate, and proper service to each of its customers.

     (3)   The board shall act within 90 days of its receipt of a completed application for designation of a solar power electric generation facility as "connected to the distribution system," to either approve, conditionally approve, or disapprove the application.  If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility as "connected to the distribution system" shall be deemed to be null and void, and the facility shall thereafter be considered not "connected to the distribution system."

     s.     In addition to any other requirements of P.L.1999, c.23 or any other law, rule, regulation or order, a solar electric power generation facility that is not net metered or an on-site generation facility and which is located on land that has been actively devoted to agricultural or horticultural use that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, shall only be considered "connected to the distribution system" if (1) the board approves the facility's designation pursuant to subsection q. of this section; or (2) (a) PJM issued a System Impact Study for the facility on or before June 30, 2011, (b) the facility files a notice with the board within 60 days of the effective date of P.L.2012, c.24, indicating its intent to qualify under this subsection, and (c) the facility has been approved as "connected to the distribution system" by the board.  Nothing in this subsection shall limit the board's authority concerning the review and oversight of facilities, unless such facilities are exempt from such review as a result of having been approved pursuant to subsection q. of this section.

     t.  (1) No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall, in consultation with the Department of Environmental Protection and the New Jersey Economic Development Authority, and, after notice and opportunity for public comment and public hearing, complete a proceeding to establish a program to provide SRECs to owners of solar electric power generation facility projects certified by the board, in consultation with the Department of Environmental Protection, as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, including those owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1).  Projects certified under this subsection shall be considered "connected to the distribution system", shall not require such designation by the board, and shall not be subject to board review required pursuant to subsections q. and r. of this section.  Notwithstanding the provisions of section 3 of P.L.1999, c.23 (C.48:3-51) or any other law, rule, regulation, or order to the contrary, for projects certified under this subsection, the board shall establish a financial incentive that is designed to supplement the SRECs generated by the facility in order to cover the additional cost of constructing and operating a solar electric power generation facility on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility.  Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provision of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers. The issuance of SRECs for all solar electric power generation facility projects pursuant to this subsection shall be deemed "Board of Public Utilities financial assistance" as provided under section 1 of P.L.2009, c.89 (C.48:2-29.47).

     (2)   Notwithstanding the provisions of the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.) or any other law, rule, regulation, or order to the contrary, the board, in consultation with the Department of Environmental Protection, may find that a person who operates a solar electric power generation facility project that has commenced operation on or after the effective date of P.L.2012, c.24, which project is certified by the board, in consultation with the Department of Environmental Protection pursuant to paragraph (1) of this subsection, as being located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility, which projects shall include, but not be limited to projects located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), or a person who owns property acquired on or after the effective date of P.L.2012, c.24 on which such a solar electric power generation facility project is constructed and operated, shall not be liable for cleanup and removal costs to the Department of Environmental Protection or to any other person for the discharge of a hazardous substance provided that:

     (a)   the person acquired or leased the real property after the discharge of that hazardous substance at the real property;

     (b)   the person did not discharge the hazardous substance, is not in any way responsible for the hazardous substance, and is not a successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g);

     (c)   the person, within 30 days after acquisition of the property, gave notice of the discharge to the Department of Environmental Protection in a manner the Department of Environmental Protection prescribes;

     (d)   the person does not disrupt or change, without prior written permission from the Department of Environmental Protection, any engineering or institutional control that is part of a remedial action for the contaminated site or any landfill closure or post-closure requirement;

     (e)   the person does not exacerbate the contamination at the property;

     (f)   the person does not interfere with any necessary remediation of the property;

     (g)   the person complies with any regulations and any permit the Department of Environmental Protection issues pursuant to section 19 of P.L.2009, c.60 (C.58:10C-19) or paragraph (2) of subsection a. of section 6 of P.L.1970, c.39 (C.13:1E-6);

     (h)   with respect to an area of historic fill, the person has demonstrated pursuant to a preliminary assessment and site investigation, that hazardous substances have not been discharged; and

     (i)    with respect to a properly closed sanitary landfill facility, no person who owns or controls the facility receives, has received, or will receive, with respect to such facility, any funds from any post-closure escrow account established pursuant to section 10 of P.L.1981, c.306 (C.13:1E-109) for the closure and monitoring of the facility.

     Only the person who is liable to clean up and remove the contamination pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g) and who does not have a defense to liability pursuant to subsection d. of that section shall be liable for cleanup and removal costs.

     u.    No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to establish a registration program.  The registration program shall require the owners of solar electric power generation facility projects connected to the distribution system to make periodic milestone filings with the board in a manner and at such times as determined by the board to provide full disclosure and transparency regarding the overall level of development and construction activity of those projects Statewide.

     v.    The issuance of SRECs for all solar electric power generation facility projects pursuant to this section, for projects connected to the distribution system with a capacity of one megawatt or greater, shall be deemed "Board of Public Utilities financial assistance" as provided pursuant to section 1 of P.L.2009, c.89 (C.48:2-29.47). 

     w.   No more than 270 days after the date of enactment of P.L.2012, c.24, the board shall, after notice and opportunity for public comment and public hearing, complete a proceeding to consider whether to establish a program to provide, to owners of solar electric power generation facility projects certified by the board as being three megawatts or greater in capacity and being net metered, including facilities which are owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), a financial incentive that is designed to supplement the SRECs generated by the facility to further the goal of improving the economic competitiveness of commercial and industrial customers taking power from such projects.  If the board determines to establish such a program pursuant to this subsection, the board may establish a financial incentive to provide that the board shall issue one SREC for no less than every 750 kilowatt-hours of solar energy generated by the certified projects.  Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provisions of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers.

     x.    Solar electric power generation facility projects that are located on an existing or proposed commercial, retail, industrial, municipal, professional, recreational, transit, commuter, entertainment complex, multi-use, or mixed-use parking lot with a capacity to park 350 or more vehicles where the area to be utilized for the facility is paved, or an impervious surface may be owned or operated by an electric public utility and may be approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1).

(cf:  P.L.2018, c.17, s.2)

     2.  This act shall take effect immediately.

STATEMENT

     This bill would amend provisions in current law concerning limits on costs to customers of the Class I renewable energy requirements, solar renewable energy portfolio standards, solar renewable energy certificates (SRECs), solar alternative compliance payments (SACPs), and net metering.

     Under current law, the Board of Public Utilities (“board”) is required to ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to law does not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively, and seven percent of the total paid for electricity by all customers in the State in any energy year thereafter.  This bill would revise this cap on the cost to customers by establishing a schedule for energy year 2022 through energy year 2037.  Under the schedule set forth in the bill, the cost to customers of the Class I renewable energy requirement imposed pursuant to law would not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2021, and would decrease until energy year 2036 when it would not exceed five percent of the total paid for electricity by all customers in the State. 

     Current law provides that an electric power supplier or basic generation service provider may satisfy the Class I renewable energy requirements set forth in law by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection.  Under this bill, an electric power supplier or basic generation service provider would also be able to satisfy the Class I renewable energy requirements by submitting a Class I alternative compliance payment in the amount of $10 for energy year 2021 through energy year 2037.  Any Class I alternative compliance payment collected would be refunded directly to the ratepayers.

     Under current law, electric power suppliers and basic generation service providers must provide a certain percentage of their electricity from solar electric power generators.  The bill would revise the schedule set forth in P.L.2018, c.17.  Beginning in energy year 2021, under this bill, electric power suppliers and basic generation service providers would be required to provide 5.25 percent, rather than 5.1 percent.  In addition, instead of culminating in 5.1 percent in energy year 2021 and gradually decreasing thereafter until energy year 2023 as set forth in current law, this bill would establish the requirement through energy year 2037 when the required percentage would be 3.87 percent.

     Under current law, the board is required to adopt rules and regulations no later than 180 days after the effective date of P.L.2018, c.17 to close the 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 service provider from solar electric power generators connected to the distribution system.  The law further provides for the closing of the SREC program no later than June 1, 2021.  This bill would delete these provisions requiring the closing of the SREC program.

     In addition, current law requires the board to complete a study to evaluate how to modify or replace the SREC program in order to encourage the continued efficient and orderly development of solar renewable generating sources.  This bill would delete these study requirements, except that under this bill, the board would still be required to complete a study to develop megawatt targets for grid connected and distribution systems, including residential and small commercial rooftop systems, community solar systems, and large scale behind the meter systems, as a share of the overall solar energy requirement.

     Under current law, the board may authorize an electric power supplier or basic generation service provider to cease offering net metering to customers that are not already net metered whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals 5.8 percent of the total annual kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider during the prior one-year period.  This bill would increase this threshold from 5.8 percent to 15 percent.

     Lastly, the bill would revise provisions in current law regarding SACPS.  Under this bill, for energy year 2021, the SACP would be reduced from $258 to $220.51.  The bill would establish a revised schedule for SACP payments from energy year 2021 until energy year 2037 when the SACP would be $120.  The bill also would provide that any SACP payments collected would first be made available once a year in an auction format approved by the board to owners of solar electric generation facilities possessing unsold SRECs, and following the annual auction any remaining SACP payments would be refunded directly to the ratepayers by the electric public utilities.  Under current law, all SACP payments are refunded directly to the ratepayers by the electric public utilities.

The Staff of the New Jersey Board of Public Utilities (“BPU”) invites all interested parties and members of the public to participate in the continued public stakeholder process to fully inform the design of the New Jersey solar transition required by P.L. 2018, c.17 (the “Clean Energy Act”). This process will include the comments and input received previously, and will build upon the experience of the State and of other jurisdictions. Likewise, this approach is intended to be completed by the statutory deadline, and to provide stakeholders the certainty necessary for continued success for the solar industry.

On May 23, 2018, Governor Phil Murphy signed the Clean Energy Act, which directs 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. The board shall continue to consider any application filed before the date of enactment of P.L.2018, c.17. The board shall provide for an orderly and transparent mechanism that will result in the closing of the existing SREC program on a date certain but no later than June 1,2021.

Additionally, the Clean Energy Act directs the Board of Public Utilities to:

 

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consider a net benefits test, should other cost impacts be included? Which ones? Why? If other cost impacts should not be included, whynot?

11)What steps should the Board take to implement the cost cap? In particular, please discuss the pros and cons of decreasing the Class I REC Renewable Portfolio Standards. Should any measures implemented differentiate among the different type of Class I renewable energy technologies? Should these measures differentiate among the different market sectors (e.g. utility-scale grid supply versus small residential systems)? Should these measures be technology neutral? Why or whynot?

12)Should the solar industry transition into a true, incentive-free market as the costs of solar begin to approach “grid parity be a goal, or even a consideration, of the SREC Successor Program? If so, how can a SREC Successor Program assist that transition? Should a transition also encompass changes to the net metering program (cf. ongoing FERC/PJM review of DERaggregation)?

13)Please provide comments on any significant issues not specifically addressed in the questions above, making specific reference to their applicability in the New Jersey context. Please do not reiterate previously madecomments.

Implementationof Act 40 of 2017                         

Public Meeting held April 19, 2018 2631527-LAW

Docket No. M-2017-2631527

JOINT MOTION OF CHAIRMAN GLADYS M. BROWN & VICE CHAIRMAN ANDREW G. PLACE

Before the Commission is the Final Implementation Order (Implementation Order) regarding Act 40 of 2017. Act 40, signed by Governor Tom Wolf on October 30, 2017, inter alia, amends the qualifications to certify Tier I solar photovoltaic share facilities under Pennsylvania's Alternative Energy Portfolio Standards (AEPS) Act. Numerous comments were filedin responsetotheTentativeImplementationOrder(TIO)adoptedonDecember 21,2017,in addition to the Supplemental Interpretation the Vice Chairman and I offered in our Joint Statement. These comments have provided helpful guidance, specifically regarding legislative intent,forourdeliberationsin thisproceeding;therefore,wethankallofthosewhotookthetime to help inform the record. Today, the Commission issues this Final Implementation Order to guide the AEPS marketplace toward compliance with Act40.

The core issues in this proceeding are the Commission's interpretations of Sections 2804(2)(i) and 2804(2)(ii). These read:

 (2)   Nothingunderthissectionorsection4ofthe"AlternativeEnergy Portfolio Standards Act" shall affect any of thefollowing:

(i)    A certification originating within the geographical boundaries of this Commonwealth granted prior to the effective date of this section of a solar photovoltaic energy generator as a qualifying alternative energy source eligible to meet the solar photovoltaic share of this Commonwealth's alternativeenergyportfoliocompliancerequirementsunderthe"Alternative Energy Portfolio StandardsAct."

(ii)   Certification of a solar photovoltaic system with a binding written contractforthesaleandpurchaseofalternativeenergycreditsderivedfrom solar photovoltaic energy sources entered into prior to the effective date of thissection.

Interpretation of these sections has been challenging for the Commission, particularly because the verbiage in Section 2804(2)(i) is not precise. The question here is whether or not this statute is intended to 'grandfather' out-of-state facilities certified before October 30, 2017, to generate

Tier I Solar credits. Given this lack of clarity, we issued a Joint Statement in conjunction with adoption of the TIO offering supplemental statutory interpretations to spur comments in an effort to inform the record.1

The Office of Consumer Advocate (OCA) succinctly states the challenge in interpreting Section 2804(2)(i) of Act 40.

The OCA submits that the language as written in Act 40 is unclear and the OCA is unable to discern the intent of the section as written. 2

Likewise, the comments of Citizens for Pennsylvania's Future (PennFuture) share similar sentiments as OCA, stating:

 Section 2804(2)(i) of Act 40 is ambiguous in regard to how and when the qualification of a facility as an alternative energy generator originates.3

We too agree that the language of Section 2804(2)(i) is unclear. Consequently, we are obligated, under the rules of statutory construction, to ascertain the intent of the General Assembly. The Rules of Statutory Construction at 1 Pa. C.S. § 1921(b) provide that:

When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.

Since, as the OCA and PennFuture point out, the verbiage here is unclear, we must now refer to 1 Pa. C.S. § 1921(c) which provides:

When the words of a statute are not explicit, the intention of the General Assembly may be ascertained by considering, among other matters:

 (2)  The circumstances under which it wasenacted.

(3)  The mischief to beremedied.

(4)  The object to beattained.

(6)  The consequences of a particularinterpretation

(7)  The contemporaneous legislativehistory.

(8)  Legislativeandadministrativeinterpretationsofsuchstatute.

The comments filed in response to the TIO have proven instructive in regard to why the General Assembly drafted this legislation, why the Governor signed it into law, and the mischief to be remedied.

1 Joint Statement of Chairman Gladys M. Brown and Vice Chairman Andrew G. Place entered December 21, 2017 at the instant Docket.

2 Comments ofOCA at page 5 filed February 5, 2018.

3 Comments of PennFuture at page I filed January 18, 2018.

Comments filed by Governor Tom Wolf, Senators Mario M. Scavello, Tom Killion, John

T. Yudichak, Jay Costa, John M. DiSanto, Steward J. Greenleaf, David G. Argall, Wayne D. Fontana, Guy Reschenthaler, and Representatives Michael B. Carroll, Eric M. Roe, Ronald S. Marsico, and Sue Helm are particularly insightful. As lawmakers who effectuated Act 40, these commenters are uniquely qualified to provide the Conunission with information regarding the intent of the statute. Each of the comments provided by lawmakers states that their intent to 'close the borders' for Tier I solar credit qualifications was consistent with the design utilized by a number of our neighboring states to promote economic development. This interpretation is consistent with the supplemental interpretation provided in our Joint Statement and contrary to the proposal of the Conunission in its TIO. Senators Jay Costa and John T. Yudichak descriptively summarize the sentiments and intentions of these lawmakers, stating the following:

The Commission's proposed interpretation under the Tentative Implementation Order published in the Pennsylvania Bulletin on January 6, 2018, would "grandfather" systems that are certified in Pennsylvania, rather than physically located in this state. We must respectfully disagree with this interpretation, which we find counter to the intentions of the General Assembly and especially of our colleagues who supported and voted in favor of this legislation.

Instead, the joint statement submitted by Chairperson Gladys M Brown and Vice Chairperson Andrew G. Place better reflects our intentions in approving this legislation. Please know that legislation to "close our solar borders" for the purposes of satisfying the Alternative Energy Standards Portfolio Act has been considered in recent sessions and discussions have been exclusive to the physical locations of systems.

While we certainly recognize the potential need to address and honor existing contracts, the long-term and primary goals set forth by this legislation have been clear. Specifically, we seek to join our neighboring states that similarly have "closed solar borders" and to advance our commitment to promoting economic and job growth within Pennsylvania's solar energy industry.4

In further support of interpreting Sections 2804(2)(i) and 2804(2)(ii) consistent with our Joint Statement, the Department of Environmental Protection (DEP) states that the intention of this provision was to provide certainty that solar photovoltaic energy facilities located within the Commonwealth would not be affected by the changes implemented elsewhere in Act 40.5 DEP also submits that the interpretation outlined in the TIO would essentially nullify the purpose of Act 40 by grandfathering enough currently-certified sources to prevent the law from having any environmental or other co-benefit whatsoever. Comments from the Pennsylvania Farm Bureau also echo this sentiment, stating that TIO interpretation would limit farmers' options for compliance with ever-increasing environmental protection standards.6

4 Comments of Senator John T. Yndichak and Senator Jay Costa filed on February 2, 2018.

5 Joint comments of the DEP and Governor Tom Wolf (DEP section at page 1) filed February 5, 2018.

6 Comments of the Pennsylvania Fann Bureau submitted February 5, 2018.

Further, ET Capital Solar Partners submits that the Commission's tentative interpretation of Section 2804(2)(i) would make the additional language of Section 2804(2)(ii) redundant.7 ET Capital Solar Partners states that if the legislative intent of Section 2804(2)(i) follows the Commission's tentative interpretation, there would be no need for the additional language of Section 2804(2)(ii) to further protect existing facilities that have entered into agreements with Pennsylvania electric-distribution companies (EDCs) and electric generation suppliers (EGSs) participating in the Pennsylvania markets. Therefore, ET Capital Solar Partners contends that the language of Section 2804(2)(ii) is further evidence that the legislative intent of Act 40 of2017 is to stimulate further investment in solar facilities within the Commonwealth. Again, the rules of statutory construction are guiding here. 1 Pa. C.S. § 1922(2) states the following:

In ascertaining the intention of the General Assembly in the enactment of a statute the following presumptions, among others, may be used:

(2) That the General Assembly intends the entire statute to be effective and certain.

Case law further clarifies the interpretation of this provision, stating that the General Assembly does not intend words to be "mere surplusage." 8

When reviewing the totality of comments described above, it becomes evident that Sections 2804(1)(i), 2804(1)(ii), and 2804(1)(iii) explicitly describe the qualifications for Tier I Solar facilities after passage of Act 40; Section 2804(2)(i) clarifies that all Tier I Solar facilities certified before passage of Act 40 that are located within the geographic boundaries of Pennsylvania are to be held harmless from this legislation; and Section 2804(2)(ii) enjoins the legislation from breaching existing contracts from out-of-state Tier I Solar facilities which were entered into before passage to serve the AEPS needs of Pennsylvania entities. Therefore, we believe we must support the adoption of our interpretations of Sections 2804(2)(i) and 2804(2)(ii) in a manner consistent with our Joint Statement to the TIO. These interpretations are as follows:

Sections 2804(2)(i) - We interpret the phrase "[a] certification originating within the geographicalboundariesofthisCommonwealth..."asafacilitylocatedwithinPennsylvania havingreceivedanAEPsTierIsolarphotovoltaic sharecertification.

2804(2)(ii)- We interpret this section to only permit out-of-state facilities that are (a) alreadycertifiedasAEPSTierISolarPhotovoltaicandthat(b)haveenteredintoacontractwith a Pennsylvania EDC or EGS serving Pennsylvania customers, for the sale of solar credits, to maintain certification until the expiration of the contract. We further wish to clarify that, consistentwiththecommentsprovidedbyETCapital SolarPartners,thismaintained

7 Comments of ET Solar Capital Partners submitted January 17, 2018.

8 Thomas Jefferson University Hospitals, Inc. v. Pa. Department of Labor and Industry, 162 A.3d 384, 393 (Pa.

2017), see also Holland v. March, 883 A.2d 449, 455-56 (Pa. 2005); Green Acres Contracting Comp. v. Commonwealth, 163 A.3d 1147 (Pa. Cmwlth. 2017) and Pa. State Police, Bureau of Liquor Control Enforcement v. Legion Post 304 Home Assoc., 164 A.3d 612,619 (Pa. Cmwlth. 2017) (holding that the rules of statutory constructionrequirethatcourts,wheneverpossible,giveeachwordinastatutorysectionmeaningandnottreatany word as surplusage).

certification should only be applicable to the amount of credits contractually committed to by an out-of-state certified facility to an EDC or EGS.9 EDCs and EGSs seeking to qualify credits under this provision are required to file a Petition within 60 days of the entry date of this order. Procedures for the 2804(2)(ii) contract approval process will be provided by the Commission at this docket.

Given this interpretation, we are also required to provide implementation procedures associated with banked credits. The AEPS Act permits EDCs and EGSs to bank, or place in reserve, credits produced in one reporting year for compliance in the next two reporting years.10 Implementation procedures are necessary to address handling of a credit generated by an out-of­ state Tier I solar qualified facility before October 30, 2017, and not retired in PJM's Generation Attribute Tracking System before October 30, 2017. Since Act 40 omits any directive expressly empowering the Commission to modify the attributes of such credits, we believe that these credits should retain the tier attribute assigned at the time the credit was generated. To do otherwise would appear to modify the legal status, or tier attribute, of a credit without explicit statutory authority. The Statutory Construction Act does not presume retroactive effect of statutes. 1 Pa. C.S. § 1926 provides:

 No statute shall be construed to be retroactive unless clearly and manifestly so intended by the General Assembly.

Further, the Commonwealth Court case provides guidance here when it determined the following:

A retroactive law is one which relates back to and gives a previous transaction a legal effect different.from that which it had under the law in effect when it transpired. This Court has held that "[a} law is given retroactive effect when it is used to impose new legal burdens on a past transaction or occurrence. " R & P Services, Inc. v. Commonwealth, Department of Revenue, 541 A.2d 432, 434

(Pa.Cmwlth.1988).However,section1926oftheStatuto1yConstructionAct providesthat"nostatutemaybeconstruedtoberetroactiveunlessclearlyand manifestlysointendedbythe GeneralAssembly."  1 Pa.CS.§19261.1

Therefore, given Act 40's omission of any directive to change the attribute of these banked credits, we submit that any out-of-state Tier I solar credit generated before October 30, 2017, should retain its Tier I solar attribute for the banking life span enumerated in AEPS. This interpretation is supported by the comments of the Retail Energy Supply Association, who states that EGSs may elect to procure varying vintage credits for use in future years in accordance with the prevailing banking rules, thus, the ability to rely on banked credits is an important component necessary for EGSs to effectively manage and satisfy their AEPS Act obligations.12

9 For purposes of implementation, any alteration, such as a change, update, or extension to a contract applicable

under this provision, and, entered into after October 30, 2017, would not be recognized under 2804(2)(i).

10 The Alternative Energy Portfolio Standards Act of 2004, 73 P.S. §§ 1648.3(e)(6)

ll Kuziakv. Borough of Danville, 125 A.3d470 (Pa. Cmwlth. 2015).

12 Comments of the Retail Energy Supply Association at 7.