Bill > S1593

Introduced Session

This bill would establish the "New Jersey Town Center Microgrid Pilot Program Act," for the purpose of facilitating implementation of a program currently before the New Jersey Board of Public Utilities (BPU). The BPU initiated the Town Center Distributed Energy Resources (TCDER) Microgrid program after Superstorm Sandy in order to help New Jersey become more energy resilient, particularly with respect to critical facilities. A TCDER Microgrid is a cluster of critical facilities within a municipal boundary, which facilities may operate as shelter for the public during and after an emergency event or provide services that are essential to function during and after an emergency situation. A microgrid connects critical facilities with distributed energy resources, which can operate when the main electric grid suffers a power outage. During 2018, the BPUs "Phase I" TCDER Microgrid Feasibility Study Incentive Program funded thirteen Feasibility Studies. During 2019, BPU informed twelve Feasibility Study applicants that their studies met program requirements and that they were eligible to apply for the "Phase II" TCDER Microgrid incentive program (one Feasibility Study applicant withdrew from the program). The BPU limited eligibility to apply for the Phase II TCDER Microgrid Incentive Program to those applicants who met the Feasibility Study program requirements. The Phase II TCDER Microgrid Incentive Program provides funding, on a competitive basis, for the design of a TCDER Microgrid, in order to help move projects towards the development and construction phase. Phase II TCDER Microgrid Incentive Program guidelines require applicants to certify that projects are legally permissible, i.e., that they conform to existing law, code, and standing Board Orders. This bill establishes a framework to enable program participants that are unable to move their projects forward due to legal or statutory impediments to do so consistent with this process. Those program participants, defined as "pilot agencies" in the bill, are Atlantic City, Camden County and its utilities authority, Galloway Township, Highland Park Borough, Hoboken City, Hudson County, Middletown Township, Montclair Township, Neptune Township, Paterson City, Trenton City (together with the State Department of Treasury), and Woodbridge Township. Under the bill, a pilot agency may enter into a project agreement, concerning the development of a TCDER Microgrid, and a power purchase agreement, concerning the procurement of electrical power supply for critical facilities. A pilot agency and a developer may enter into a power purchase agreement, for a term not to exceed 20 years, subject to the review and approval of the Division of Local Government Services (DLGS) and the BPU. The DLGS would have power to review and approve financial matters and risks associated with a proposed power purchase agreement. The BPU would have power to: review and approve electrical supply and distribution matters for a proposed power purchase agreement; provide guidance concerning offtaker rates and fees that are necessary for a proposed power purchase agreement; and adopt specifically authorized microgrid tariffs affecting the electrical distribution company in order to facilitate the development of a TCDER Microgrid project. The bill sets forth a procurement process, outside of the "Local Public Contracts Law," for a pilot agency to solicit a developer, with whom it would enter into a project agreement and a power purchase agreement. After completing a request for proposals process, the bill authorizes a pilot agency to select a prospective developer, by resolution, and to enter into negotiations for a power purchase agreement with the selected developer. A pilot agency that intends to enter into a project agreement and a power purchase agreement with a developer must conduct a public hearing on the proposed agreements. Within 30 days after the public hearing, the pilot agency would submit: · an application for review of the proposed project agreement and for review and approval of the proposed power purchase agreement to the DLGS;· an application for review of the proposed project agreement and for review and approval of the proposed power purchase agreement and proposed microgrid tariff to the BPU; and · a copy of each application to the Department of Environmental Protection (DEP) for the department's review and comment. A pilot agency must submit initial applications within three years of the effective date of this bill. The bill directs BPU and DLGS to specify application forms and processes for a pilot agency to seek approvals under the bill. The DLGS would assist pilot agencies in developing procurement processes and requests for proposals. The BPU would assist pilot agencies in evaluating provisions of proposed power purchase agreements and tariffs. The bill would allow a pilot agency to submit to the DLGS a request for a waiver of specific provisions of law that are within the division's jurisdiction. The division may grant a request for a waiver and may adopt alternative provisions upon a finding of public need for the project and general consistency with the applicable provisions of law, if the division determines that enforcing the requirements sought to be waived: is not necessary to protect the overall public interest and may compromise viability of the proposed TCDER microgrid project. The bill would empower the BPU and the DLGS to each take actions not specifically authorized under the bill which the board or division deems reasonable, prudent, and necessary to accomplish the bill's purposes if those actions are consistent with the bill's purposes and address issues not specifically covered by the bill. For this purpose, the bill specifies that the purposes of the bill are to encourage energy efficiency, reliability, resiliency, sound technical development and operation, while ensuring fiscal integrity of each pilot agency and its power purchase or related agreements with a TCDER microgrid developer. The bill directs the DLGS, the BPU, and the DEP to coordinate their reviews, insofar as practicable, and to engage in discussions with each other and the pilot agency to address any concerns. Within 60 days of receipt of an application, the board and the division must each either approve, disapprove, or conditionally approve the application. The board and the division shall disapprove an application unless it was initially submitted for review within three years of the effective date of this act. If the board or division does not approve, disapprove, or conditionally approve an application within 60 days of receipt, the application would be deemed approved, unless the public agency has agreed to an extension of the review period or the application was not submitted within three years of the effective date of this act. If the board or division conditionally approve an application, the board or division must provide the pilot agency suggested language for a required revision to the proposed agreement or tariff, in writing, inclusion of which would enable the board or division to approve the proposed agreement or tariff. If the board or division determines that the required revision is substantial, the pilot agency must hold a public hearing on the revision. The bill provides that a substantial revision would be a change that materially changes the terms and conditions of the proposed agreement or tariff. If the board or division determines that the required revision is not substantial, the pilot agency must submit the proposed revision to the board and the division for approval and to the department for review. The board and the division would approve the proposed revision, if it is found to be consistent with the conditions set forth in the conditional approval, or disapprove the application with a written explanation as to why the revision is not consistent with the conditions set forth in the conditional approval. The bill sets forth criteria that the BPU and the DLGS would apply when determining whether to approve a proposed power purchase agreement and tariff. The bill directs BPU in consultation with the DLGS and the DEP, to prepare a report describing implementation of the bill, and submit the report to the Governor and to the Legislature within four years of the bill's effective date.

Committee Categories

Andrew Zwicker (D)*, 

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee (on 01/09/2024)

Official Document