Distributed Energy Resources

N.J. governor signs sweeping energy legislation

New Jersey Gov. Phil Murphy on May 23 signed two pieces of legislation that make sweeping changes to the state’s energy policy, including setting a 50 percent renewable energy requirement by 2030 and adopting nuclear power plant subsidies.

Murphy also signed an executive order that requires state agencies to update a master energy plan by June 2019 so that New Jersey will get all its power from clean energy sources by 2050.

New Jersey lawmakers passed the bills in April.

The first piece of legislation sets renewable portfolio standard targets of 21 percent by 2020, 35 percent by 2025 and 50 percent by 2030. A cap on costs provides additional protections for consumers, the governor’s office said.

Currently, including a solar carveout, New Jersey has a renewable requirement of 24.4 percent by 2028.

The legislation (A-3723) also codifies the governor’s goal of having 3,500 MW of offshore wind by 2030. It also reinstates an expired tax credit program for offshore wind manufacturing activities.

The New Jersey Board of Public Utilities will create a community solar program under the legislation.

Also, the measure reforms the state’s solar program by making near-term structural changes to ensure that the program is sustainable over the long term.

Energy storage could get a major boost. The BPU is required to analyze, with input from the PJM Interconnection, a range of energy storage issues including how renewable energy storage systems could benefit ratepayers by providing emergency back-up power, offsetting peak loads and stabilizing the distribution system.

The BPU has a year to file a report on storage opportunities in New Jersey and potential incentives that could support energy storage. Then, within six months, the BPU must develop a plan for getting 600 megawatts of storage by 2021 and 2,000 MW by 2030.

Murphy said New Jersey lags in energy storage development, which is needed to support the state’s clean energy ambitions. “With these [storage] technologies, we can continue to draw clean energy even when there is no sun to shine or when the winds slow,” Murphy said.

The legislation also requires utilities in the state to implement energy efficiency measures to reduce electricity usage by 2 percent and natural gas usage by 0.75 percent.


On the nuclear side, a second bill (S-2313) creates a "zero emission certificate" program to support nuclear generation in the state -- the 2,468-MW Salem plant and the 1,240-MW Hope Creek facility.

New Jersey needs to keep the plants open to reach the state’s clean energy goals, Murphy said, noting they provide 40 percent of the state’s electricity and 90 percent of its emissions-free energy.

Public Service Electric and Gas Nuclear owns the Hope Creek plant and has a majority share of the Salem plant, which it co-owns with Exelon Generation. PSEG officials have said the nuclear plants will close if they don't receive extra financial support.

To be eligible for the subsidies, PSEG will have to show the BPU the plants could be forced to retire within three years because of revenue shortfalls or an unexpected increase in operating costs. If one of these plants were to retire early and not apply for the credits, an out-of-state nuclear plant could then apply. Zero emissions credits are capped 40 percent of the state’s total electric usage.

Plants determined by the BPU to be eligible will receive the credits for three years and the balance of the first energy year following selection. After that initial period of time, the BPU can determine whether to approve zero emission credits for additional three-year periods.

The New Jersey Board of Public Utilities will be able to hire outside experts to analyze nuclear power plant financial information and ZEC program applications, and to adjust the ZEC payments to meet a plant’s actual financial need, according to Murphy. 

A plant seeking to participate in the program would be required to certify that it is not receiving funding from any other federal, regional, or state source that would negate the need for the ZEC. Employees at plants participating in the ZEC program would further be protected from layoffs for reasons other than underperformance or misconduct.