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NJ lawmakers split nuclear, clean energy package into 3 bills

Legislation encompassing a nuclear plant subsidy and changes to clean energy programs in New Jersey has been split into three separate bills: one on nuclear, a second on clean energy and a third on offshore wind.

The original proposal, companions S. 877 and A. 2850, packaged the nuclear and clean energy language together. The bills got mixed support at a Feb. 22 joint committee hearing but were still able to pass. A vote in the Senate, however, stalled Feb. 26, which prompted Senate President Stephen Sweeney, one of the sponsors, to call for an additional review.

In addition to nuclear, S. 877/A. 2850 cover solar, energy efficiency and energy storage and incorporated the governor's target for 3,500 MW of offshore wind by 2030. Now, the nuclear provisions are included in S. 2313, the clean energy provisions are in S. 2314 and other offshore wind provisions are in S. 1217. State Sen. Bob Smith, one of the bills' sponsors, said in an interview March 23 that he expects the three Senate bills, along with their companions in the Assembly, to get committee reviews in the next two weeks and hopes that they will pass the legislature by April.

Smith said there are large changes to the solar renewable energy credit, or SREC, portion of clean energy bill. One change is phasing out of the SREC program in the next 2.5 years. "The reason for that is we think there are better and more efficient ways to provide a subsidy for solar that will be less expensive to ratepayers," he said, citing New York's block pricing model as an example.

Solar target advanced

S. 2314/A. 3723 accelerates the state's solar target to have 5.1% of electric sales come from solar in 2021. Current law requires that solar form about 4.1% of sales by 2028. Under the bill, the annual solar target also steps down each year through 2031 instead of steadily rising as it has in the past. Unlike S. 877, however, the bills require regulators within six months of enactment to adopt rules to close the SREC program to new applicants after the state achieves the 5.1% solar target. S. 877 required the state Board of Public Utilities to finish a study within two years on how to modify or replace the SREC program.

Nuclear assistance unchanged

The nuclear bills, S. 2313/A. 3724, are largely unchanged from the language in the original, broader proposals. They offer nuclear plants additional cost recovery by allowing them to generate zero-emission certificates, or ZECs, which represent the value nuclear plants provide the state in terms of fuel diversity and reduced air pollution. Under the bills, retail distribution companies are required to purchase the ZECs for compliance and can pass the costs through tariffs to customers. The bills allow distribution companies to charge up to 0.4 cent/KWh to recover the costs of the certificates. Smith said the bills maintain consumer protections by allowing the board to revise the ZEC price annually if nuclear plants get subsidized on a federal or regional level.

The ZEC program would aid struggling nuclear plants including Public Service Enterprise Group Inc.'s 1,172-MW Hope Creek and 2,328-MW Salem, which it co-owns with Exelon Corp. The state's three nuclear plants — Salem, Hope Creek and Oyster Creek — provide about 40% of New Jersey's electric generation but are at risk of retirement given competition from natural gas and low wholesale power prices. Under the bill, Oyster Creek would not be eligible for ZECs because Exelon plans to retire the plant in October.

Offshore wind bill tries to revive rejected project

Smith said the bill on offshore wind would no longer require a project to submit a cost-benefit test to the BPU to get approval. S. 1217/A. 2485, introduced Jan. 25, requires the board within a month of the bill's enactment to reconsider the application of a 25-MW offshore wind project proposed by Fishermen's Energy LLC, which the BPU previously rejected in part because of expected costs. Similar legislation Smith proposed in 2015 was vetoed by then-Gov. Chris Christie, a Republican. Phil Murphy, a Democrat who became governor this year, has called for having all of the state's electricity come from clean sources by 2050.