The New Jersey Board of Public Utilities, in a Sept. 17 order, opened an application window beginning on Sept. 20 and ending on Dec. 28 for offshore wind projects in federal waters off the outer continental shelf of the coast of New Jersey, consistent with the Offshore Wind Economic Development Act (OWEDA) of 2010.
The board invites “any and all interested parties to submit applications for offshore wind projects in federal waters off the coast of New Jersey that are able to interconnect to the transmission system in New Jersey,” the board said.
The board said that it may recover reasonable costs related to its review of an offshore wind application, including consulting services. The board also said that it approves the use of a “guidance document,” which provides guidance on the preparation of the application, standards, and assumptions to be used in calculating net economic benefits, the formats to be used for submittal of the information required under the rules, evaluation criteria stipulated under the rules, the solicitation schedule, and key dates.
In addition, the board said that it directs applicants to place $150,000 on deposit with the state, and that staff is authorized to require the applicant to place additional amounts of deposit in the offshore wind reimbursement fund, as necessary.
As noted in the order, New Jersey Gov. Phil Murphy’s Executive Order No. 8 (EO8) – which Murphy signed in January – calls upon the board to fully implement OWEDA. The solicitation of 1,100 MW of offshore wind capacity will be the nation’s largest solicitation of offshore wind capacity to date, and will spur the development of new, clean energy sources that will create new jobs, while reducing greenhouse gases that cause global warming and climate change, the board said.
New Jersey has a goal of 3,500 MW of offshore wind capacity by 2030, the board said.
The application window will allow offshore wind project developers to submit applications consistent with the requirements established under OWEDA and in compliance with certain rules that specify an application process, as well as application requirements, for an offshore wind project to be deemed eligible by the board to receive state subsidies in the form of offshore wind renewable energy certificates (ORECs), the board said.
The board also noted that by acting now, it can help ensure that offshore wind projects built off the coast of New Jersey qualify for federal investment tax credits (ITCs) that expire in 2019, and thus save New Jersey ratepayers 12% of the total project costs, or an estimated $300m.
The board noted that former Gov. Chris Christie in August 2010 signed into law OWEDA, which amended and supplemented the Electric Discount and Energy Competition Act. The board said that in February 2011, it adopted rules that provided an application process, as well as a framework, under which the board will review any application and ultimately approve, conditionally approve, or deny the application. The board said that it readopted the rules with amendments in January 2013. The rules include application requirements, the ability for the board to designate the application windows, the ability for the board to impose appropriate conditions upon any OREC grant, and offshore wind renewable portfolio standards, the board said.
Among other things, the board noted that in July, it proposed new rules and amendments to establish the OREC funding mechanism. The purpose of this rulemaking is to set forth the method and processes by which ratepayers will fund an offshore wind project in accordance with all applicable laws, rules, executive orders, and board orders, and how all revenues earned from an offshore wind project will be delivered to ratepayers, the board said.
Under the existing rules, each basic generation service supplier or provider that sells electricity to retail customers in New Jersey must ensure that the electricity it sells each reporting year in the state includes at least the minimum percentage of offshore wind energy required for that energy year, as set by the board, following the approval of a qualified offshore wind project.
The board added that the proposed new rules describe the method by which suppliers will meet that obligation and how funds from the sale of ORECs will flow to the qualified offshore wind projects. The new rules and amendments also describe how revenues earned by offshore wind projects, including the sale of electricity, capacity, and other services, will be refunded to ratepayers as required under OWEDA. The board also said that the rule is subject to a 60-day comment period, at which point it may be adopted if there are no substantial changes.
Discussing the application process, the board said that its rules, consistent with OWEDA, establish the timeframe for an application process as such:
- An entity seeking to receive ORECs in connection with an offshore wind project is to submit an application to the board for approval as a qualified offshore wind project. The application must meet certain requirements, including of applicable state and federal laws
- The board will announce the open and close dates for all application periods, which are to be set at the board’s discretion
- The board is to approve, conditionally approve, or deny the application within 180 days of the receipt of a completed application. The parties may consent to an extension beyond 180 days
- The applicant is to meet with board staff and representatives of the Division of Rate Counsel no less than 30 days prior to submission of an application to discuss all aspects of the application
- All applications must be consistent with board application standards
Board staff must notify the applicant within 30 days of the submission if the application is administratively complete or is deficient. If the application is deficient, then the applicant will be advised which items must be remedied to correct the deficiency or deficiencies, the board added. Within 180 days of the receipt of a completed application, the board is to then approve, conditionally approve, or deny the application.
The board also said that applications are due on Dec. 28, and will be reviewed for a determination of completeness by Jan. 28, 2019. The board then has 180 days, or until June 28, 2019, to evaluate, deliberate, and make a determination on the application. Offshore wind developers need about six months from the date of a board decision to qualify for the ITC, which expires Dec. 31, 2019, the board added.
The board said that it finds that the proposed OREC Funding Mechanism Rules provide the necessary regulatory framework to enable project financing; that it is in the best interest of the state and its ratepayers to act now to open an application window so that offshore wind projects may have the opportunity to qualify for the federal ITC and thus save the state and ratepayers 12% off the total cost of projects; and that it has taken all the appropriate steps called for by Murphy under EO8 to implement OWEDA and is now prepared to proceed with a solicitation of 1,100 MW.