Christie Administration Releases Final Energy Master Plan

December 9, 2011

On December 6, 2011, the Christie Administration released its final Energy Master Plan (EMP), which details the Administration’s vision for the use, management, and development of energy in the State. The Administration initially released the EMP in draft form in June. Following the release of the draft EMP, the Board of Public Utilities (BPU) hosted three public hearings that were attended by over 400 individuals who provided verbal and written comments on the draft. The BPU then formed four technical working groups to provide specific recommendations on clean energy funding, alternate fueled vehicles, innovative technologies, and biomass. Many of the public comments and recommendations have been incorporated into the EMP. Several provisions adopted in the final version were maintained from the draft, but certain changes are identified below. A notable difference between the final EMP and the draft EMP relates to renewable energy systems and stabilization of the SREC market. Other changes include recommendations to investigate innovative renewable energy technologies (such as tidal power); investigate building controls that can significantly reduce energy use; improve natural gas energy efficiency; promote high efficiency gas appliances; and expand outreach to consumers about conservation measures. The recommendations found in the EMP are policy statements of the Administration that may, in certain instances, require legislation to implement. The EMP addresses four key areas: (1) the expansion of in-State generation; (2) the promotion of cost-effective renewable resources; (3) the support for innovative technologies; and (4) the promotion of energy efficiency and conservation. Expansion of In-State Generation: The final EMP, much like the draft EMP, envisions achieving this goal by: constructing new generation (as supported by the Long Term Capacity Agreement Pilot Program (LCAPP)); improving PJM rules and processes; assessing the implications of lost nuclear power in the State; expanding distributed generation; supporting combined heat and power or cogeneration; supporting behind-the-meter renewable energy installations; promoting biomass and waste-to-energy projects; and promoting the safe expansion of the natural gas pipeline system. Promotion of Cost Effective Renewable Resources: Although both documents support the development of offshore wind technology, the final EMP differs from the draft EMP in its attempt to address the current drop in the market price of solar renewable energy certificates (SRECs) to encourage industry growth and provide needed financial certainty while minimizing the impact on ratepayers. The recommended solar development plan includes the following:
  • Accelerating the Renewable Portfolio Standard (RPS) (over the next three years) to provide immediate relief, while reducing the outlier years of the RPS schedule and reducing the Solar Alternative Compliance Payment (SACP) to minimize ratepayer impacts.
  • Amending the Solar Advancement and Fair Competition Act to eliminate the fixed GWh requirements in the solar RPS and allow the return to the percentage obligation model that existed previously.
  • Offering priority for approval to projects that provide a "dual benefit" (both economic and environmental benefits) so that those projects will profit from an expansion of SREC eligibility, for example, through legislation defining “distribution system.”
  • Providing the BPU with the ability to review and approve subsidies for grid-supply projects to ensure compatibility with land use, environmental and energy policies, such as ensuring that solar projects do not impact the preservation of open space or farmland.
  • Expanding long-term contracting programs offered by the electric distribution companies in order to provide SREC price stability for further investments.
  • Encouraging all proposed solar developments to register with the State to facilitate planning and forecasting.
Support the Development of Innovative Energy Technologies: The final EMP’s recommendations for achieving this goal are similar to what was stated in the draft EMP. In particular, the EMP proposes: improving transportation efficiency and emissions reductions; monitoring the future of fuel cell and energy storage technologies; evaluating smart grid technology demonstration projects; as well as considering dynamic pricing and smart metering. In addition, the final EMP includes recommendations to investigate other renewable energy technologies (such as tidal power), new building materials, and building controls that can significantly reduce energy use. The EMP also supports partnerships with higher educational institutions to promote the testing and development of new technologies. Promotion of Cost-Effective Energy Efficiency and Conservation: To achieve this goal, the final EMP, much like the draft EMP, recommends: promoting energy efficiency and demand reduction in State buildings; incorporating aggressive energy efficiency standards into building codes; redesigning State energy efficiency programs; and monitoring PJM’s demand response initiatives. The final EMP also includes recommendations for improving natural gas energy efficiency, promoting high efficiency gas appliances, and expanding education and outreach to consumers about conservation measures. For more information on the Energy Master Plan, contact Cynthia L. M. Holland, Esq.