The New Jersey Board of Public Utilities has opened an investigation into "how the State can best achieve its reliability, clean energy, and environmental objectives, while keeping costs to consumers as low as possible." Like many states, New Jersey’s utilities participate in a
federally regulated regional transmission organization’s capacity
market, but are also subject to state clean energy laws -- a tension
that has caused the state's energy regulators to consider whether to
leave the PJM regional capacity market.
At issue is whether New Jersey can "achieve its long-term clean energy and environmental objectives under the current resource adequacy procurement paradigm" -- the regional electric capacity market operated by PJM Interconnection -- or whether it should adopt an alternative mechanism to "meet New Jersey’s resource adequacy needs in a manner consistent with
the State’s clean energy and environmental objectives, while considering
costs to utility customers."
New Jersey electric utilities currently participate in the PJM regional markets, including a capacity market. The state has adopted a 2019 Energy Master Plan: Pathway to 2050, establishing a series of state-focused clean energy goals such as 7,500 MW of offshore wind by 2035 and 100% clean energy by 2050. Other states in the PJM region have adopted different clean energy goals.
At the same time, PJM's regional market is federally regulated. In December 2019, the Federal Energy Regulatory Commission directed PJM to modify its "Minimum Offer Price Rule" or MOPR, governing the capacity
market. Designed to counteract excessive market power, the federal ruling directed PJM to modify its MOPR to also counteract the pricing effects of state clean energy
policies. In its state Energy Master Plan, New Jersey described FERC's action as "actively attempting to support fossil fuel interests in the [PJM] region under the guise of promoting ‘fair’ competition."
In response to the FERC's MOPR order, on March 27, the New Jersey Board of Public Utilities issued an Order Initiating Proceeding in Docket No. EO20030203. Citing the federal order, the Board characterized it as "a direct attack on the State’s clean energy programs" and expressed concern that continued participation in the federally-regulated PJM market could frustrate New Jersey's ability to achieve its clean energy goals. The Board thus initiated a proceeding to consider whether to retain the current PJM market paradigm, or whether an alternative could achieve the state's climate and environmental goals at a lower cost to consumers.
Withdrawing from a regional transmission organization can be done under certain circumstances, but federally regulated tariffs and territories spanning multiple states with their own laws can complicate the path toward a clean break. As envisioned by the Board, possible alternatives for New Jersey might include using a "fixed resource requirement" or FRR approach under the PJM tariff to effectively withdraw one or more service areas from the broader PJM capacity market, or adopting a statewide clean energy standard that would require load-serving entities to source increased percentages of renewable or other clean energy.
Board staff subsequently issued a Request for Written Comments in the proceeding, soliciting written comments on four sets of topics by April 29. Issues raised in the request for comment include whether New Jersey could utilize the Fixed Resource Requirement alternative to satisfy its resource adequacy needs and accelerate its clean energy goals, whether modifications to the Board's Basic General Service construct could facilitate resource adequacy procurements aligned with the state's Energy Master Plan, and whether other mechanisms such as a clean energy standard or clean energy market could facilitate achievement of the state's clean energy goals.
Staff have suggested the Board's investigation will be completed later this year.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label NJ. Show all posts
Showing posts with label NJ. Show all posts
NJ approves offshore wind funding mechanism, rejects demonstration project
Thursday, December 20, 2018
On December 18, the New Jersey Board of Public Utilities took two actions affecting offshore wind: approving the state’s Offshore Wind Renewable Energy Certificate (OREC) funding mechanism, but rejecting a petition by Nautilus Offshore Wind, LLC to install a 25 MW offshore wind demonstration project in state waters off the coast of Atlantic City. Meanwhile, developers have formed a new joint venture to develop offshore wind in federal waters farther offshore New Jersey.
New Jersey Governor Phil Murphy has set a goal of 3.5 gigawatts of offshore wind capacity by 2030, and in May 2018 he signed into law a renewable energy bill codifying that goal into statute. On September 17, 2018, the NJBPU opened the nation’s largest single-state solicitation to date, seeking 1,100 megawatts of offshore wind. Applications will be accepted through December 28, 2018. Winning projects will be compensated through the OREC mechanism approved this week, which requires electric companies to buy defined quantities of ORECs from offshore wind developers, much like a traditional renewable portfolio standard mechanism.
Also on December 18, the BPU rejected a 25 megawatt demonstration project proposed by Nautilus (under development by EDF Renewables and Fishermen’s Energy). The Nautilus project would feature three turbines in state waters about 2.8 miles offshore Atlantic City. But the BPU found the Nautilus project did not demonstrate the economic and environmental benefits required under the Offshore Wind Economic Development Act for the state to commit ratepayer funds. In particular, the BPU found that Nautilus didn’t provide sufficient information to substantiate claimed economic benefits, and further that Nautilus demanded a price that was too high given the unsubstantiated benefits.
But offshore wind development may soon occur farther offshore New Jersey. On December 19, 2018, EDF Renewables North America and Shell New Energies US LLC announced the formation of a 50/50 joint venture, Atlantic Shores Offshore Wind, LLC to co-develop offshore wind generation in federal waters offshore New Jersey. The site is about 8 miles offshore Atlantic City. At issue is the 183,353-acrea OCS-0499 lease area, the rights to which were initially auctioned by the federal Bureau of Ocean Energy Management in 2015. That auction was won by Toto Holding Group subsidiary US Wind Inc., with a winning bid of $1,006,240.
More recent federal auctions for offshore wind site leasing rights have brought much higher winning bids -- for example, a December 2018 auction for sites offshore Massachusetts brought in about $135 million for each of three lease areas, totaling over $405 million in winning bids for about 390,000 acres.
New Jersey Governor Phil Murphy has set a goal of 3.5 gigawatts of offshore wind capacity by 2030, and in May 2018 he signed into law a renewable energy bill codifying that goal into statute. On September 17, 2018, the NJBPU opened the nation’s largest single-state solicitation to date, seeking 1,100 megawatts of offshore wind. Applications will be accepted through December 28, 2018. Winning projects will be compensated through the OREC mechanism approved this week, which requires electric companies to buy defined quantities of ORECs from offshore wind developers, much like a traditional renewable portfolio standard mechanism.
Also on December 18, the BPU rejected a 25 megawatt demonstration project proposed by Nautilus (under development by EDF Renewables and Fishermen’s Energy). The Nautilus project would feature three turbines in state waters about 2.8 miles offshore Atlantic City. But the BPU found the Nautilus project did not demonstrate the economic and environmental benefits required under the Offshore Wind Economic Development Act for the state to commit ratepayer funds. In particular, the BPU found that Nautilus didn’t provide sufficient information to substantiate claimed economic benefits, and further that Nautilus demanded a price that was too high given the unsubstantiated benefits.
But offshore wind development may soon occur farther offshore New Jersey. On December 19, 2018, EDF Renewables North America and Shell New Energies US LLC announced the formation of a 50/50 joint venture, Atlantic Shores Offshore Wind, LLC to co-develop offshore wind generation in federal waters offshore New Jersey. The site is about 8 miles offshore Atlantic City. At issue is the 183,353-acrea OCS-0499 lease area, the rights to which were initially auctioned by the federal Bureau of Ocean Energy Management in 2015. That auction was won by Toto Holding Group subsidiary US Wind Inc., with a winning bid of $1,006,240.
More recent federal auctions for offshore wind site leasing rights have brought much higher winning bids -- for example, a December 2018 auction for sites offshore Massachusetts brought in about $135 million for each of three lease areas, totaling over $405 million in winning bids for about 390,000 acres.
New Jersey FERC license surrender and dam removal
Monday, August 15, 2016
U.S. energy regulators have accepted an application to surrender the licensee for a New Jersey hydropower project. Earlier this month, the Federal Energy Regulatory Commission accepted Great Bear Hydropower Inc.'s application to surrender its license for the Columbia Dam Project, located on the Paulins Kill. While the Commission decision to accept license surrender does not necessarily mean the dam will be removed, it represents a significant step toward letting the dam owner pursue dam removal if it wishes. The case also illustrates tensions between hydropower development and dam removal, which remain active in U.S. policy discussions, and the consequences of state jurisdiction following FERC license surrender.
On January 15, 1986, the Commission issued a 40-year license for the construction, operation, and maintenance of hydroelectric facilities at the existing Columbia Dam. The project includes a 20-foot-high, 330-foot-long concrete dam, originally built by a utility in 1909. The site was sold to the state in 1955, after which the original electric generation was discontinued. Following the project's 1986 licensing by FERC, the licensee added a powerhouse containing two generating units with a total installed generating capacity of 530 kilowatts.
The dam remains owned by the state of New Jersey as part of the Columbia Wildlife Management Area, and the licensee has been operating the project under a long-term lease with the state. But significant efforts are under way to improve water quality in the Delaware River basin. The Nature Conservancy has described a strategy for watershed restoration that features the Columbia Dam's removal as a key component. After the state and The Nature Conservancy entered into an agreement to remove the dam, the licensee ultimately agreed to surrender its license and remove only its hydroelectric facilities originally added to the dam, leaving the state to perform any future dam removal.
Because the Columbia Dam Project is subject to Part 1 of the Federal Power Act, its license could not be surrendered without approval of the Federal Energy Regulatory Commission. The licensee applied for surrender in October 2015. The Commission granted that approval on August 10, 2016.
The FERC license surrender does not necessarily mean that the dam itself will be removed, although it does provide for decommissioning of the hydropower equipment. The Commission accepted the licensee's proposal to remove the generating equipment, transformers from the powerhouse, and disconnect the electric connection to the local utility. The license surrender will not be effective until the Commission agrees that the project’s facilities have been decommissioned in accordance with this surrender order.
As for the dam, the Commission noted, "It will be up to the state of New Jersey, the dam owner, to decide whether to remove the Columbia Dam, once the hydroelectric facilities have been decommissioned. Dam removal would have some ecological, social, and economic benefits for the Paulins Kill watershed." Following the effectiveness of license surrender, safety matters would primarily be state jurisdictional, and any dam removal would proceed primarily under state law.
While hydropower continues to play a significant role in the overall U.S. energy mix, with new and ongoing federal initiatives to increase hydropower generation, in some cases economics and environmental considerations may lead to the surrender of some project licenses. This may be particularly true for some relatively small dams with fish passage issues facing relicensing in coming years.
On January 15, 1986, the Commission issued a 40-year license for the construction, operation, and maintenance of hydroelectric facilities at the existing Columbia Dam. The project includes a 20-foot-high, 330-foot-long concrete dam, originally built by a utility in 1909. The site was sold to the state in 1955, after which the original electric generation was discontinued. Following the project's 1986 licensing by FERC, the licensee added a powerhouse containing two generating units with a total installed generating capacity of 530 kilowatts.
The dam remains owned by the state of New Jersey as part of the Columbia Wildlife Management Area, and the licensee has been operating the project under a long-term lease with the state. But significant efforts are under way to improve water quality in the Delaware River basin. The Nature Conservancy has described a strategy for watershed restoration that features the Columbia Dam's removal as a key component. After the state and The Nature Conservancy entered into an agreement to remove the dam, the licensee ultimately agreed to surrender its license and remove only its hydroelectric facilities originally added to the dam, leaving the state to perform any future dam removal.
Because the Columbia Dam Project is subject to Part 1 of the Federal Power Act, its license could not be surrendered without approval of the Federal Energy Regulatory Commission. The licensee applied for surrender in October 2015. The Commission granted that approval on August 10, 2016.
The FERC license surrender does not necessarily mean that the dam itself will be removed, although it does provide for decommissioning of the hydropower equipment. The Commission accepted the licensee's proposal to remove the generating equipment, transformers from the powerhouse, and disconnect the electric connection to the local utility. The license surrender will not be effective until the Commission agrees that the project’s facilities have been decommissioned in accordance with this surrender order.
As for the dam, the Commission noted, "It will be up to the state of New Jersey, the dam owner, to decide whether to remove the Columbia Dam, once the hydroelectric facilities have been decommissioned. Dam removal would have some ecological, social, and economic benefits for the Paulins Kill watershed." Following the effectiveness of license surrender, safety matters would primarily be state jurisdictional, and any dam removal would proceed primarily under state law.
While hydropower continues to play a significant role in the overall U.S. energy mix, with new and ongoing federal initiatives to increase hydropower generation, in some cases economics and environmental considerations may lead to the surrender of some project licenses. This may be particularly true for some relatively small dams with fish passage issues facing relicensing in coming years.
NJ board to decide on offshore wind project
Wednesday, March 19, 2014
Will New Jersey regulators approve key support for an offshore wind project proposed off the Jersey shore?
Many coastal states and nations are placing new focus on energy projects designed to generate electricity from offshore winds. A project off New Jersey, first proposed in 2011, appeared to make some initial progress, but has since seemed to stall -- due in part to regulatory delays at the state level. With a decision by the state Board of Public Utilities (BPU) expected this week, will the Fishermen's Energy offshore wind project move forward?
The New Jersey coast offers a fairly unique combination of wind resources and proximity to customer demand. To capitalize on this combination, the New Jersey legislature and government adopted measures promoting the development of the state's offshore wind resource. For example, New Jersey's Energy Master Plan calls for an ambitious target of 1,100 megawatts of offshore wind installed by 2020.
In response to the opportunity, in May 2011, Fisherman's Energy submitted an application to the BPU under the Offshore Wind Economic Development Act for an offshore wind demonstration project. The Cape May, New Jersey-based developer proposed five, five-megawatt wind turbines in state waters about 2.8 miles off the Atlantic City coast, with a total capacity of 25 megawatts and an estimated cost of $200 million to $300 million. By the end of 2012, the project had won substantially all of the permits necessary for its development and operation, including approvals by the New Jersey Department of Environmental Protection and Army Corps of Engineers -- but a key piece of the regulatory and financing puzzles remains missing.
Under New Jersey law, the BPU may select one or more qualified offshore wind projects for financial support in the form of a long-term contract to buy Offshore Wind Renewable Energy Certificates, or ORECs, from the developer. This revenue stream is viewed as essential to enable a developer to finance and construct a project.
But nearly 3 years later, the state OREC review process remains ongoing. Last year, BPU Staff recommended the BPU reject Fishermen’s project on the grounds that it demonstrated no economic benefits but bore unnecessary technology risk due to its selection of XEMC turbines. But project advocates, including the New Jersey Rate Counsel, support the project for its apparent consumer benefits. Nevertheless, the BPU has yet to approve an OREC program.
Meanwhile, crucial federal tax incentives such as the renewable energy business investment tax credit have ended. Many renewable project developers have found these credits essential in building financing packages for their projects over the last years; while the credits may be reenacted in some form, their loss may mean Fishermen's Energy needs to revise its financial projections.
Fishermen's Energy -- and the many other stakeholders following the project -- may soon learn the project's fate. The New Jersey BPU is scheduled to vote today on whether to approve the project and authorize it to produce and sell ORECs. Will the BPU grant Fishermen's Energy's request?
Many coastal states and nations are placing new focus on energy projects designed to generate electricity from offshore winds. A project off New Jersey, first proposed in 2011, appeared to make some initial progress, but has since seemed to stall -- due in part to regulatory delays at the state level. With a decision by the state Board of Public Utilities (BPU) expected this week, will the Fishermen's Energy offshore wind project move forward?
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| Fishing boats in a small harbor along Maine's midcoast. |
The New Jersey coast offers a fairly unique combination of wind resources and proximity to customer demand. To capitalize on this combination, the New Jersey legislature and government adopted measures promoting the development of the state's offshore wind resource. For example, New Jersey's Energy Master Plan calls for an ambitious target of 1,100 megawatts of offshore wind installed by 2020.
In response to the opportunity, in May 2011, Fisherman's Energy submitted an application to the BPU under the Offshore Wind Economic Development Act for an offshore wind demonstration project. The Cape May, New Jersey-based developer proposed five, five-megawatt wind turbines in state waters about 2.8 miles off the Atlantic City coast, with a total capacity of 25 megawatts and an estimated cost of $200 million to $300 million. By the end of 2012, the project had won substantially all of the permits necessary for its development and operation, including approvals by the New Jersey Department of Environmental Protection and Army Corps of Engineers -- but a key piece of the regulatory and financing puzzles remains missing.
Under New Jersey law, the BPU may select one or more qualified offshore wind projects for financial support in the form of a long-term contract to buy Offshore Wind Renewable Energy Certificates, or ORECs, from the developer. This revenue stream is viewed as essential to enable a developer to finance and construct a project.
But nearly 3 years later, the state OREC review process remains ongoing. Last year, BPU Staff recommended the BPU reject Fishermen’s project on the grounds that it demonstrated no economic benefits but bore unnecessary technology risk due to its selection of XEMC turbines. But project advocates, including the New Jersey Rate Counsel, support the project for its apparent consumer benefits. Nevertheless, the BPU has yet to approve an OREC program.
Meanwhile, crucial federal tax incentives such as the renewable energy business investment tax credit have ended. Many renewable project developers have found these credits essential in building financing packages for their projects over the last years; while the credits may be reenacted in some form, their loss may mean Fishermen's Energy needs to revise its financial projections.
Fishermen's Energy -- and the many other stakeholders following the project -- may soon learn the project's fate. The New Jersey BPU is scheduled to vote today on whether to approve the project and authorize it to produce and sell ORECs. Will the BPU grant Fishermen's Energy's request?
NJ declares NRG Bluewater abandoned offshore wind project
Thursday, October 11, 2012
Finding that the developer has abandoned the project, New Jersey regulators have withdrawn $3 million in financial support for an offshore wind project proposed by NRG Bluewater Wind.
Bluewater Wind New Jersey Energy LLC proposed a 350 megawatt wind project off the New Jersey coast. In 2008, the company won a $4 million grant from the state to install an offshore meteorological tower as part of a state-sponsored offshore wind grant solicitation. The grant agreement required Bluewater to install the tower by 2010, and took the form of a rebate: if Bluewater installed the tower by the deadline, it would receive $4 million back from the state.
NRG Energy - a Fortune 250 wholesale power generation company controlling nearly 26 gigawatts of capacity - acquired Bluewater in 2009. Also in 2009, Bluewater asked for and received a one-year extension of the met tower deadline.
In October 2010, Bluewater requested another extension, this time for two years. Bluewater pointed to difficulties in obtaining federal permits for the project. The NJ BPU granted the extension on April 27, 2011, requiring regular progress reporting and installation of the met towers by January 9, 2013. The BPU also lowered the rebate amount to $3 million.
According to the BPU's October 4, 2012 order cancelling the rebate, Bluewater filed progress reports with the BPU in 2011 and January 2012, but ultimately stopped reporting. But in December 2011, NRG announced that it was putting active development of offshore wind projects on hold. By September 2012, BPU staff put NRG on notice that they planned to recommend that the Board cancel its rebate commitment "due to project abandonment and lack of reporting". According to the BPU's order, "the company did not object or otherwise respond when advised of staff's recommendation to withdraw the rebate commitment".
As a result, last week the BPU found that the company had not complied with the order requiring status updates, and thus "that NRG Energy and Bluewater have abandoned the project and will not meet the rebate commitment requirements." The Board cancelled the met tower rebate, and directed BPU staff to reallocate the funding to other New Jersey Clean Energy Programs.
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| The U.S. and New Jersey flags, flying in the sea breeze at Cape May, NJ. |
Bluewater Wind New Jersey Energy LLC proposed a 350 megawatt wind project off the New Jersey coast. In 2008, the company won a $4 million grant from the state to install an offshore meteorological tower as part of a state-sponsored offshore wind grant solicitation. The grant agreement required Bluewater to install the tower by 2010, and took the form of a rebate: if Bluewater installed the tower by the deadline, it would receive $4 million back from the state.
NRG Energy - a Fortune 250 wholesale power generation company controlling nearly 26 gigawatts of capacity - acquired Bluewater in 2009. Also in 2009, Bluewater asked for and received a one-year extension of the met tower deadline.
In October 2010, Bluewater requested another extension, this time for two years. Bluewater pointed to difficulties in obtaining federal permits for the project. The NJ BPU granted the extension on April 27, 2011, requiring regular progress reporting and installation of the met towers by January 9, 2013. The BPU also lowered the rebate amount to $3 million.
According to the BPU's October 4, 2012 order cancelling the rebate, Bluewater filed progress reports with the BPU in 2011 and January 2012, but ultimately stopped reporting. But in December 2011, NRG announced that it was putting active development of offshore wind projects on hold. By September 2012, BPU staff put NRG on notice that they planned to recommend that the Board cancel its rebate commitment "due to project abandonment and lack of reporting". According to the BPU's order, "the company did not object or otherwise respond when advised of staff's recommendation to withdraw the rebate commitment".
As a result, last week the BPU found that the company had not complied with the order requiring status updates, and thus "that NRG Energy and Bluewater have abandoned the project and will not meet the rebate commitment requirements." The Board cancelled the met tower rebate, and directed BPU staff to reallocate the funding to other New Jersey Clean Energy Programs.
NJ tweaks solar energy law
Wednesday, July 25, 2012
New Jersey Governor Chris Christie has signed into law a bill designed to support the Garden State's solar energy industry. The bill, which amends New Jersey's electric renewable portfolio standard, is hoped to remedy a perceived oversupply in the state market for solar renewable energy certificates, or SRECs.
Under New Jersey law, electric public utilities are required to source a specified portion of their power from solar electric generating facilities. This solar-produced power is represented by SRECs, a tradable commodity issued by the New Jersey Board of Public Utilities to generators for each megawatt hour of solar energy they generate from grid-connected facilities.
New Jersey's renewable portfolio standard requires utilities need to procure a specified amount of SRECs. When the law first took effect, New Jersey had a shortage of eligible installed solar generation compared to this legislative demand, so SREC prices were high -- over $600 per MWh. These prices were a significant incentive to develop solar capacity. New Jersey installed more solar capacity in the first quarter of 2012 than any other state, and led the nation in solar installations on commercial and industrial properties in 2011. Today there are over 16,000 solar installations throughout the state, totaling over 800 MW in installed solar capacity. Another 600 MW of solar capacity is in various stages of installation.
As New Jersey experienced significant growth in solar capacity, SREC supplies grew to the point where they exceeded the level of utility demand required by the renewable portfolio standard. SREC prices fell below $200 on spot markets. These low prices hurt solar developers and other stakeholders whose financing is reliant on REC sales and assumed higher prices.
The bill signed into law this week, "An Act concerning certain electric customer metering and solar renewable portfolio standards requirements and amending P.L.1999, c.23" (available as Senate Bill 1925 and Assembly Bill 2966), is designed to fix this problem. It increases the amount of solar energy utilities must buy in the near-term. As of June 1, 2013, the state’s solar energy mix will change from a fixed megawatt-hour requirement to a percentage-based requirement. In proximate years, the change will represent an increase over the current solar carve-out; over time, it will return to the currently-planned arc of solar requirements.
The exact effect of the new law on SREC markets remains to be seen. With a short-term increase in SREC demand, prices may rise, leading more projects to come online. Will the short-term accelerated increase in demand lead to long-term price support, more development, both - or neither?
Under New Jersey law, electric public utilities are required to source a specified portion of their power from solar electric generating facilities. This solar-produced power is represented by SRECs, a tradable commodity issued by the New Jersey Board of Public Utilities to generators for each megawatt hour of solar energy they generate from grid-connected facilities.
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| Solar photovoltaic panels on the roof of Gallagher's Auto Parts, in Patten, Maine. |
New Jersey's renewable portfolio standard requires utilities need to procure a specified amount of SRECs. When the law first took effect, New Jersey had a shortage of eligible installed solar generation compared to this legislative demand, so SREC prices were high -- over $600 per MWh. These prices were a significant incentive to develop solar capacity. New Jersey installed more solar capacity in the first quarter of 2012 than any other state, and led the nation in solar installations on commercial and industrial properties in 2011. Today there are over 16,000 solar installations throughout the state, totaling over 800 MW in installed solar capacity. Another 600 MW of solar capacity is in various stages of installation.
As New Jersey experienced significant growth in solar capacity, SREC supplies grew to the point where they exceeded the level of utility demand required by the renewable portfolio standard. SREC prices fell below $200 on spot markets. These low prices hurt solar developers and other stakeholders whose financing is reliant on REC sales and assumed higher prices.
The bill signed into law this week, "An Act concerning certain electric customer metering and solar renewable portfolio standards requirements and amending P.L.1999, c.23" (available as Senate Bill 1925 and Assembly Bill 2966), is designed to fix this problem. It increases the amount of solar energy utilities must buy in the near-term. As of June 1, 2013, the state’s solar energy mix will change from a fixed megawatt-hour requirement to a percentage-based requirement. In proximate years, the change will represent an increase over the current solar carve-out; over time, it will return to the currently-planned arc of solar requirements.
The exact effect of the new law on SREC markets remains to be seen. With a short-term increase in SREC demand, prices may rise, leading more projects to come online. Will the short-term accelerated increase in demand lead to long-term price support, more development, both - or neither?
Will NJ stay in RGGI?
Wednesday, March 21, 2012
The New Jersey Senate has passed a bill which would require the state to remain a member of the Regional Greenhouse Gas Initiative, the carbon cap-and-trade compact covering the Northeast and mid-Atlantic states. The bill, S. 1322, is described as clarifying the legislature's intent regarding NJ’s required participation in RGGI.
RGGI is the first major market-based greenhouse gas regulatory program in the United States. RGGI represents a cooperative effort by Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. These ten states agreed to cap and reduce their electrical energy sector's greenhouse gas emissions by 10% by 2018. Each state was free to develop its own implementation of the compact, including both how carbon allowances would be allocated and how proceeds from their sale would be used. For example, Maine chose to invest its share of RGGI auction proceeds in energy efficiency, managed by the Efficiency Maine Trust. A February 2012 report found that, for every dollar of RGGI auction revenues that was invested in energy efficiency in 2010, participating states received $1.3 to $6.8 in total energy benefits, with a weighted average of $2.3 in return on investment.
Last year, NJ Governor Chris Christie vowed to remove New Jersey from RGGI, arguing that RGGI participation represents a tax without producing any measurable impact on the environment. Democrats in the state legislature introduced legislation (A4108/S2946) to require NJ to remain in RGGI, but in August 2011 Gov. Christie vetoed that bill.
S. 1322 now faces debate before the New Jersey Assembly. If it passes out of the Assembly, it will then face an anticipated veto from the governor. Will New Jersey remain in RGGI?
RGGI is the first major market-based greenhouse gas regulatory program in the United States. RGGI represents a cooperative effort by Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. These ten states agreed to cap and reduce their electrical energy sector's greenhouse gas emissions by 10% by 2018. Each state was free to develop its own implementation of the compact, including both how carbon allowances would be allocated and how proceeds from their sale would be used. For example, Maine chose to invest its share of RGGI auction proceeds in energy efficiency, managed by the Efficiency Maine Trust. A February 2012 report found that, for every dollar of RGGI auction revenues that was invested in energy efficiency in 2010, participating states received $1.3 to $6.8 in total energy benefits, with a weighted average of $2.3 in return on investment.
Last year, NJ Governor Chris Christie vowed to remove New Jersey from RGGI, arguing that RGGI participation represents a tax without producing any measurable impact on the environment. Democrats in the state legislature introduced legislation (A4108/S2946) to require NJ to remain in RGGI, but in August 2011 Gov. Christie vetoed that bill.
S. 1322 now faces debate before the New Jersey Assembly. If it passes out of the Assembly, it will then face an anticipated veto from the governor. Will New Jersey remain in RGGI?
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