State Faces Triple Energy Challenge in New Year

By Tom Johnson

Even with a revamped Energy Master Plan in place, the Christie administration faces tough challenges and tougher decisions in the New Year, ones that could affect the future of solar energy in the state and determine if offshore wind farms get built along the Jersey coast.

The state also faces an uphill battle in its efforts to develop new power plants here, a strategy that has suffered setbacks in the federal courts, as well as from a federal regulatory agency and the PJM Interconnection, the regional operator of the nation's largest power grid.

In all three areas, the choices the administration makes, largely guided by a new president of the Board of Public Utilities, could either undermine or further the primary goal of the new master plan: driving down electricity prices and making New Jersey more competitive with neighboring states.

In some cases, the decisions will have to be made quickly. The Democratic-controlled legislature is poised to act on a few bills on the last day of the lame duck session next week that are aimed at stabilizing New Jersey's once fast-growing solar sector.

Fixing the Solar Sector

With mounting pressure from New Jersey's deeply fractured solar sector, lawmakers appear ready to act on a pair of bills supporters believe may stop a slide in the price of solar renewable energy certificates (SRECs), which has dropped by more than half in the past year. The certificates are one of the primary means solar companies have built the more than 11,000 solar systems installed in New Jersey, a total second only to California. The certificates are earned from the electricity produced by solar panels.

With the drop in prices for the certificates, however, solar advocates worry investment in the sector will dry up unless some action is taken. Lawmakers are poised to act on a bill (A-4426/S-2371) that would accelerate the schedule that requires power suppliers to buy more of their electricity from solar systems. Proponents say that would soak up the excess supply of SRECs and boost prices modestly for the certificates, increasing investment in the sector.

The other measure would approve a conditional veto of a bill (A-2529) that aims to limit which solar projects are eligible to receive SRECs. The rationale is to prevent utility-scale projects from swallowing up all of the certificates, squeezing out smaller firms that put systems on homes and small businesses.

Despite a consensus that something needs to be done, there is still a lot of debate about some provisions in the bills, particularly over how much oversight should the BPU exercise over large solar projects and how many existing projects should be grandfathered and avoid the review.

Assemblyman Upendra Chivukula (D-Somerset), the sponsor of the two bills, remains optimistic. "It has to be done. It will be done,'' he said in an interview late last year. "The question is how do you do it?''

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