Bill Text: NJ SCR159 | 2012-2013 | Regular Session | Introduced
Bill Title: Urges BPU to coordinate with PJM Interconnection to facilitate development of New Jersey Energy Link in phases; recommends that BPU and EDA conduct economic studies to determine benefits of project.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2013-06-27 - Substituted by ACR197 (1R) [SCR159 Detail]
Download: New_Jersey-2012-SCR159-Introduced.html
Sponsored by:
Senator STEPHEN M. SWEENEY
District 3 (Cumberland, Gloucester and Salem)
Senator KEVIN J. O'TOOLE
District 40 (Bergen, Essex, Morris and Passaic)
SYNOPSIS
Urges BPU to coordinate with PJM Interconnection to facilitate development of New Jersey Energy Link in phases; recommends that BPU and EDA conduct economic studies to determine benefits of project.
CURRENT VERSION OF TEXT
As introduced.
A Concurrent Resolution urging the Board of Public Utilities to coordinate with PJM Interconnection L.L.C. to facilitate the development of the New Jersey Energy Link in phases, and recommending that the Board of Public Utilities and the New Jersey Economic Development Authority conduct economic studies to determine the benefits of this energy project.
Whereas, Major weather events in 2011 and 2012, namely Hurricane Irene, Superstorm Sandy, and a significant fall snowstorm, caused extensive damage to the electrical infrastructure in New Jersey; and
Whereas, Each storm left citizens of this State without power for a prolonged period, causing hardship and economic loss to many residents and businesses; and
Whereas, These weather events demonstrate the need for a robust, resilient, and modern electrical infrastructure in this State; and
Whereas, An offshore transmission infrastructure would provide this robust, resilient, and modern electrical infrastructure in New Jersey and would benefit the State by providing transmission of electricity from offshore wind generators to New Jersey, better ensuring reliability and reducing the cost of delivering electricity; and
Whereas, Because offshore transmission infrastructure is buried beneath the ocean, it is less susceptible to damage from natural disasters and severe weather, and will therefore result in faster service restoration and continued transmission of electricity in the event of disruption to the electric transmission system; and
Whereas, It is the public policy of this State to promote the use of alternative energies; and
Whereas, Offshore transmission infrastructure will speed the deployment of offshore wind turbines, promote the formation of an offshore wind industry in the State, and reduce the environmental impact of onshore transmission line construction; and
Whereas, New Jersey Energy Link (NJEL) is an energy project developed by Atlantic Grid Development, L.L.C. (Atlantic Grid Development) for the construction of an offshore, backbone transmission cable buried beneath the Atlantic Ocean, spanning the entire length of New Jersey; and
Whereas, With construction anticipated to begin in 2016, the transmission cable will carry 3,000 megawatts of electricity, equal to the output of roughly three nuclear reactors, linking energy resources and users in northern, central, and southern New Jersey; and
Whereas, According to a study by IHS Global Insight, the NJEL project and offshore wind farms are anticipated to create upwards of 20,000 jobs in this State, contribute $9 billion into the State's economy, and bolster State and local tax revenues by $2.2 billion; and
Whereas, Importantly, the NJEL project will improve the reliability of and reduce congestion within our electrical infrastructure; and
Whereas, The development of the NJEL project and the phased-in ratepayer participation will proceed in four phases and will be contingent on the project reaching the milestones set forth herein; and
Whereas, To further reduce the impact on ratepayers, the Board of Public Utilities (BPU) will negotiate a budget with Atlantic Grid Development for NJEL project activities from September 30, 2013 to September 30, 2015 to limit the amount of ratepayer participation in the funding of the NJEL project; and
Whereas, The State will also obtain a nonexclusive license as to any intellectual property developed through ratepayer funding, allowing the State use of any intellectual property assets to refund ratepayers in the event that the project is abandoned; and
Whereas, The BPU must join Atlantic Grid Development and PJM Interconnection, L.L.C. (PJM) in filing with the Federal Energy Regulatory Commission (FERC) to modify the rate treatment provided in the FERC order dated May 19, 2011. The purpose of this filing is to shield ratepayers in this State from any costs associated with the NJEL project that were incurred prior to June 28, 2013 in the event that the NJEL project is abandoned for reasons beyond the control of Atlantic Grid Development; and
Whereas, To determine the potential benefits of the NJEL project, the BPU and the New Jersey Economic Development Authority must study the economic benefits of the NJEL project as it relates to job creation, tax revenue, emission reductions, and ratepayer impact; and
Whereas, To facilitate the construction of the NJEL project, the BPU must coordinate with PJM and request that the NJEL project be included in PJM's regional transmission expansion plan; and
Whereas, The NJEL project is an opportunity for this State to create new employment, reduce electrical outages, and become a national leader in offshore wind energy; now, therefore,
Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):
1. The Board of Public Utilities (BPU) is respectfully urged to complete the four phases, as set forth herein, of the New Jersey Energy Link (NJEL) project, and to adhere to the NJEL project timeline to the maximum extent feasible.
a. Phase one milestones are as follows:
(1) Enter into an agreement with Atlantic Grid Development to have Atlantic Grid Development develop the NJEL project which will supply electricity to the northern, southern, central, and coastal areas of this State. The development of the NJEL project and the phased-in ratepayer participation should proceed in stages and should be contingent on the project reaching the milestones set forth herein. The BPU should negotiate a budget with Atlantic Grid Development for NJEL project activities from September 30, 2013 to September 30, 2015 to limit the amount of ratepayer participation in a manner that balances ratepayer interests with the need to make prudent investments to complete the NJEL project.
(2) Join Atlantic Grid Development and PJM in filing with the Federal Energy Regulatory Commission (FERC) to modify the rate treatment in the FERC order dated May 19, 2011. The purpose of this filing should be to shield ratepayers in this State from any costs associated with the NJEL project that were incurred prior to June 28, 2013 (Target Date) in the event that the NJEL project is abandoned for reasons beyond the control of Atlantic Grid Development. The State's continued support for the NJEL project should be contingent on a FERC order incorporating these ratepayer protections. Ratepayers should only be exposed to prudently incurred project costs, provided that the milestones set forth herein are reached, should the BPU determine in writing to abandon its support for the NJEL project after the Target Date.
(3) Enter into an agreement with Atlantic Grid Development to have Atlantic Grid Development place monies into an escrow account to fully fund a study of the economic benefits of the NJEL project. The BPU should request that the New Jersey Economic Development Authority (EDA) conduct the economic benefits study, which should consider economic activity, tax revenue growth, job creation, pollution reduction, and assume an energy output range between 1,000-3,000 megawatts of offshore wind turbine capacity generated in the State relating to the NJEL project. The EDA should prepare and deliver a written report of the economic benefits study to the Governor, to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), and the BPU by September 30, 2013.
b. Phase two milestones are as follows:
(1) Request that PJM place the NJEL project in PJM's regional transmission expansion plan (RTEP) no later than September 30, 2013 under the State Agreement Approach. The request shall be made no later than the Target Date. The inclusion of the NJEL project in the PJM's RTEP should not expose ratepayers in this State to any costs associated with the NJEL project that were incurred prior to the Target Date in the event of project abandonment. The BPU should request that PJM study the benefits of the NJEL project and prepare and deliver a written report to the Governor, to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), and the BPU by September 30, 2013. The study should be funded by PJM and should be based on PJM's most recent transmission system configuration in its latest RTEP, assume an energy output range between 1,000-3,000 megawatts of offshore wind turbine capacity generated in this State, and estimate the improvements in reliability and congestion and load payment reduction over a period of 40 years following the completion of the NJEL project.
(2) Reserve the right to seek an adjustment to the cost allocation under the PJM tariff if one or more other states subsequently request that PJM build an interconnection with the NJEL project. The BPU should request that PJM conduct any studies and make any filings with the FERC that are necessary to further the NJEL project.
c. Phase three milestones are as follows:
(1) Require that Atlantic Grid Development conduct detailed permitting and required engineering activities, such as marine surveys, environmental impact studies, and specification development by September 30, 2014 that would allow the NJEL to commence construction in 2016.
(2) Finalize offshore wind renewable energy certificate regulations and issue solicitations to offshore wind developers by September 30, 2014.
(3) Make a written determination by December 29, 2014 whether to abandon or continue supporting the development of the NJEL project provided that the milestones set forth in paragraphs (1) and (2) of this subsection have been reached. If the BPU determines that it is abandoning its support for the NJEL project, ratepayers should only be exposed to project costs prudently incurred between the Target Date and December 29, 2014.
(4) Make a written determination by September 30, 2015 whether to abandon or continue supporting the development of the NJEL project. This determination should be based on: the obtainment of all required permits for the NJEL project; a full environmental review; the availability of construction financing; and the benefits associated with offshore wind project status, wind project proposals, and improved reliability. If the BPU determines to abandon its support for the NJEL project, ratepayers should only be exposed to project costs prudently incurred between the Target Date and September 30, 2015.
d. Phase four milestones are as follows:
Determine whether to abandon its support for the NJEL project at any point after September 30, 2015. This determination should be based on the benefits and status of the NJEL project and the project's cost to ratepayers. If the BPU determines to abandon its support for the NJEL project after September 30, 2015, ratepayers should only be exposed to project costs prudently incurred before and after the Target Date, up to the date of abandonment. To offset the cost to ratepayers, Atlantic Grid Development should sell project assets and apply the proceeds in a manner that lowers the amount paid by ratepayers. Atlantic Grid Development should grant the State a nonexclusive license to any intellectual property developed through ratepayer funding, allowing the State use of any intellectual property assets to refund ratepayers. Atlantic Grid Development should have the first right to develop the NJEL project should the State decide to reinitiate its support for the project at a later date.
2. Duly authenticated copies of this concurrent resolution shall be transmitted to the President of the Board of Public Utilities, the Executive Director of the New Jersey Economic Development Authority, and to the Chair of the Board of Managers of PJM.
3. This concurrent resolution shall take effect immediately.
STATEMENT
This resolution urges the Board of Public Utilities (BPU) to coordinate with PJM Interconnection, L.L.C. (PJM) to facilitate the development of the New Jersey Energy Link (NJEL) project in phases, and recommends that the BPU and the New Jersey Economic Development Authority (EDA) conduct economic studies to facilitate the development of the NJEL project.
The NJEL is an energy project developed by Atlantic Grid Development, L.L.C. (Atlantic Grid Development) for the construction of an offshore, backbone transmission cable buried beneath the Atlantic Ocean. The transmission cable will span the entire length of New Jersey, with construction set to begin in 2016. The offshore transmission infrastructure will promote the formation of an offshore wind industry in this State and improve the reliability of the State's electrical infrastructure.
The development of the NJEL project and the phased-in ratepayer participation will proceed in four phases and will be contingent on the project reaching the milestones set forth in this resolution. To further reduce the impact on ratepayers, the BPU will negotiate a budget with Atlantic Grid Development for NJEL project activities from September 30, 2013 to September 30, 2015 to limit the amount of ratepayer participation in the funding of the NJEL project. In addition, the State will obtain a nonexclusive license to any intellectual property developed through ratepayer funding, allowing the State use of any intellectual property assets to refund ratepayers.
The NJEL project is an opportunity for this State to create jobs, reduce electrical outages, and become a national leader in offshore wind energy. To facilitate the construction of the NJEL project, this resolution urges the BPU to coordinate with PJM and requests that the NJEL project be included in PJM's regional transmission expansion plan. To determine the potential benefits to this State, the BPU and EDA are urged to study the economic benefits of the NJEL project as they relate to job creation, tax revenue, emission reductions, and ratepayer impact.
