New Jersey BPU directs staff to initiate rulemaking process involving offshore wind

The New Jersey Board of Public Utilities (BPU), in a Feb. 28 order, directed its staff to initiate the rulemaking process to establish the Offshore Wind Renewable Energy Credit (OREC) funding mechanism.

The BPU further directed its staff, within 30 days of the order, to initiate an Interagency Offshore Wind Taskforce by convening a meeting with the executive leadership of the stage agencies responsible for the implementation of the Offshore Wind Economic Development Act (OWEDA), as well as of Executive Order No. 8 (EO8) – which New Jersey Gov. Phil Murphy signed on Jan. 31 – and to develop the Offshore Wind Strategic Plan.

As noted in the order, EO8 calls for the BPU, in collaboration with other state agencies, to fully implement the OWEDA and to begin the process of moving the state toward a minimum goal of 1,100 MW of offshore wind energy capacity consistent with the OWEDA.

EO8 further calls upon the BPU, within 60 days, to “initiate the administrative rulemaking process to establish the OREC funding mechanism, through which rules and regulations shall describe the flow of payments for ORECs from suppliers to offshore wind developers. The OREC funding mechanism regulations shall also define the administrative steps to ensure, verify, and account for OREC payments to offshore wind developers.”

The BPU also noted that the New Jersey Legislature in June 2010 passed the OWEDA, which was signed into law in August of that year.

OWEDA mandated that the BPU, within 180 days after the date of enactment of OWEDA, establish an offshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in New Jersey by each electric power supplier and each basic generation service provider be from offshore wind energy in order to support at least 1,100 MW of generation from qualified offshore wind projects.

The BPU also said that in February 2011, it adopted a measure that provided an application process and a framework under which the BPU would review any application and ultimately approve, conditionally approve, or deny the application. By a May 2011 order, the BPU opened an application window for 30 days for offshore wind projects in New Jersey territorial waters. The BPU added that it received one application, which eventually was determined not to be a qualified offshore wind project.

The BPU in January 2013 readopted the measure with amendments and, to date, has not yet promulgated rules on the funding mechanism.

The BPU added that the Interior Department’s Bureau of Ocean Energy Management (BOEM) in November 2015 held a competitive lease sale for renewable energy in federal waters, which offered nearly 344,000 acres offshore New Jersey for potential wind energy development.

BOEM in February 2016 signed the commercial wind energy leases, which went into effect in March of that year. One lease in the northern zone was assigned to US Wind Inc., the BPU added. In April 2016, BOEM received an application to assign 100% of another commercial lease in the southern zone to Ocean Wind LLC, which is owned by Orsted, the BPU said, noting that BOEM approved the assignment in May of that year.

Those leases are now available for development subject to the federal and state laws and regulations governing offshore wind development, the BPU said.

In support of the BPU fully implementing OWEDA and initiating the Offshore Wind Strategic Planning Process, the Department of the Treasury is directed to work with the BPU and the DEP “to ensure that necessary resources and expertise, including an offshore wind economic consultant, are available to advise and assist in the implementation of OWEDA and” EO8, the BPU said.

Among other things, the BPU said that within 60 days, staff is to recommend to the BPU plans for a Regional Offshore Wind Energy Roundtable to initiate discussions with sister states in the Northeast and Mid-Atlantic region, as well as such other stakeholders as Rate Counsel and PJM Interconnection, to explore the potential benefits of regional collaboration on offshore wind.

About Corina Rivera-Linares 3058 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.