New Jersey, PJM team up on offshore wind transmission development planning

New York and Washington — The New Jersey Board of Public Utilities Nov. 18 approved an order to align its offshore wind transmission goals within PJM Interconnection's transmission planning process to help meet New Jersey's 7.5 GW offshore wind power capacity by 2035 goal.

"Today is an important day for PJM because it marks the first time a state in PJM has initiated a provision in our Operating Agreement called the State Agreement Approach and this enables New Jersey to continue to leverage PJM's regional transmission planning expertise," Manu Asthana, PJM's president and CEO, said on a conference call with reporters.

"New Jersey has an ambitious offshore wind agenda and I'm really proud to be working with the BPU to help integrate this generation," Asthana said.

New Jersey Board of Public Utilities' president Joseph Fiordaliso agreed, saying the board "took a major step to secure New Jersey's pathway to 100% clean energy." The board has authorized PJM to include New Jersey's plan to build 7.5 GW of offshore wind capacity into its Regional Transmission Expansion Plan, he said.

The board expects the competitive proposal window will open in the first quarter of 2021. Importantly, he highlighted the announcement does not authorize any construction or transmission project costs but authorizes the competitive solicitation process to begin.

Abe Silverman, NJBPU general counsel, provided further clarification regarding the process going forward, explaining this "will start a process where we will go in and make a series of Federal Energy Regulatory Commission filings with PJM."

"The initial play would be that New Jersey bears the costs, but if others come in and other states join and we end up with a regional grid then everybody is better off because it makes for more clean energy coming onto the grid and helps share the costs," Silverman said.

In terms of what to watch for next at the PJM stakeholder process level, Ken Seiler, PJM's vice president of planning, said "this will be a hot topic of discussion as you can imagine going into 2021. We'll be discussing this with the Planning Committee coming up and likely in other meetings as well."

PJM will begin to prepare for the open window solicitation in early 2021 so it can go out with needs to enhance the transmission system in New Jersey and following that PJM will go through an extensive evaluation of the proposals received, the results of which will be revealed later in the year to determine needed upgrades, Seiler said.

The NJBPU's Fiordaliso also said he hopes there will be a "much more functional FERC in Washington" under a Biden presidential administration.

"We expect here in New Jersey a much friendlier environment as far as [offshore wind] lease areas ... and a much more cooperative federal government in proceeding to establish our wind farms and that's so important. It makes the progress we're trying to achieve a little bit easier," he said.

"Maybe I'm naïve, but I'm seeing a brighter sky down the road here," Fiordaliso said.

NJBPU order

The order making the request to PJM and directing board staff to work with the grid operator, said the board took the step "to confirm the state's commitment to the development of offshore wind generation, in a manner that may lead to more efficient and cost-effective incorporation of offshore wind generation into New Jersey's transmission grid and avoid transmission-related delays."

Both New Jersey's energy master plan and offshore wind strategic plan have pointed to the role transmission will play as the state works to reach Murphy's goal. The strategic plan, released in September, said meeting the goal requires collaboration with PJM "to assure transmission infrastructure accommodates renewable energy such as offshore wind."

Per the board's order, staff will work with PJM to look for potential solutions for three interrelated components of an open access offshore wind transmission facility.

The first involves upgrades to the onshore PJM regional transmission system to accommodate increased power flows from the offshore wind projects. The second deals with soliciting bids from transmission developers to permit and construct beach crossings and connect new or existing onshore substations to new offshore collector stations. The last involves an offshore wind backbone to connect different collector stations serving various offshore wind lease areas to network the lease areas.

While the board is exploring potential transmission options, regulators said ratepayers are not yet on the hook for any costs.

The board can pick one or more proposed projects or decide to close the process without building any transmission facilities should none "provide a compelling value to consumers," the order said. But if one or more projects are picked, then ratepayers would be assigned the costs of the transmission upgrades pursuant to a FERC-accepted cost allocation that is agreed to by the board.

Regulators also stressed that Ørsted's 1,100-MW Ocean Wind project, which won New Jersey's first offshore wind solicitation, along with any project or projects selected in the state's second solicitation will have to follow interconnection requirements set out in previous orders and guidance documents.