New Jersey Administrative Code › Title 14 - PUBLIC UTILITIES › Chapter 8 - RENEWABLE ENERGY AND ENERGY EFFICIENCY › Subchapter 2 - RENEWABLE PORTFOLIO STANDARDS › Section 14:8-2.12 - Class I RPS Cost Cap

Current through Register Vol. 56, No. 14, July 15, 2024
(a) To calculate the Cost Cap established by
				statute at
				N.J.S.A.
				48:3-87.d(2), Board staff shall calculate the
				annual cost of the Class I renewable energy requirement (excluding ORECs and
				SREC-IIs created through the CSI Program) as a percentage of the total paid for
				electricity by all customers in the State, using a methodology as follows:
1. The annual cost as a percentage shall be
				calculated by dividing the cost to customers of the Class I renewable energy
				requirement (excluding the cost of ORECs and SREC-IIs created through the CSI
				Program) (that is, the numerator) by the total paid for electricity by all
				customers in the State (that is, the denominator), and multiplying by
				100.
2. The cost to New Jersey
				customers of the Class I renewable energy requirement (the numerator) shall be
				equal to the annual cost of the Cost Cap-Applicable Programs as defined at
				(a)2i below, reduced by the dollar value of any energy and environmental
				savings attributable to the Cost Cap-Applicable Programs, as described at
				(a)2ii and iii below.
i. The Cost
				Cap-Applicable Programs shall be the Solar Renewable Energy Certificate (SREC)
				Program; the Transition Incentive (TI) Program, which provides incentives
				through the Transition Renewable Energy Certificates (TRECs); the
				Administratively Determined Incentive (ADI) Program established pursuant to
				P.L.
				2021, c. 169, which
				provides incentives through Solar Renewable Energy Certificate-IIs (SREC-IIs);
				the Class I Renewable Energy Portfolio (RPS), which provides incentives through
				the Class I Renewable Energy Certificates (Class I RECs); and any future Class
				I program created as part of the RPS. The annual cost of SRECs, TRECs, eligible
				SREC-IIs, Class I RECs, and any future Class I program shall be found in the
				annual Renewable Portfolio Standard compliance reports produced by Board staff.
				In calculating the annual cost of SREC-IIs, the Board shall include only the
				cost the SREC-IIs created and retired through the ADI Program. SREC-IIs created
				and retired through the CSI Program established pursuant to
				P.L.
				2021, c. 169 shall not
				be considered eligible SREC-IIs for purposes of the Cost Cap calculation and
				shall not be included in the calculation of the cost of the Class I renewable
				energy requirement.
ii. Energy
				savings attributable to the Cost Cap-Applicable Programs shall be determined
				annually by Board staff, and shall equal the sum of the reduction in prices in
				the PJM wholesale markets for energy that results from the reduction in demand
				or increases in low cost supply associated with the Cost Cap-Applicable
				Programs; and the reduction in prices in the PJM wholesale markets for capacity
				that results from the reduction in demand or the increases in low cost supply
				associated with the Cost Cap-Applicable Programs. Board staff shall conduct an
				analysis, using data on electric energy and capacity prices available from PJM
				and other sources, to determine the impacts caused by Cost Cap-Applicable
				Programs resources on electric energy and capacity costs for New Jersey
				ratepayers.
iii. The environmental
				savings attributable to the Cost Cap-Applicable Programs shall be equal to the
				tons of carbon dioxide not emitted by electric generators located in the PJM
				region as a result of the Cost Cap-Applicable Programs multiplied by the social
				cost of carbon value. To calculate the tons of carbon dioxide not emitted,
				staff shall, on an annual basis, multiply the average historical electric
				carbon dioxide emissions rate as most recently published by PJM Interconnection
				by the number of megawatt-hours of zero-carbon electricity generated by
				resources participating in the Cost Cap-Applicable Programs. The social cost of
				carbon value shall initially be set equal to the midpoint of social cost of
				carbon in the most recently published United States Government Interagency
				Working Group on Social Cost of Greenhouse Gases, which is currently set at the
				three percent discount rate. The Board may elect, through a Board order, to
				adjust the social cost of carbon value used based on society's evolving
				understanding of the costs imposed on society by global climate change, after a
				notice and comment proceeding, provided that the Board shall not select a
				scenario that results in a social cost of carbon less than the three percent
				discount rate. The Board may consider, through a Board order, additional
				environmental savings associated with reduced particulate matter and other
				harmful emissions from fossil fuel power plants after a notice and comment
				proceeding. Any changes to the metrics for calculating the social cost of
				carbon or the addition of additional environmental savings shall be made only
				after publication of the proposed changes on the Board's website and a public
				comment period of at least 30 days.
3. The total paid for electricity shall be
				reported by Board staff on an annual basis based on its estimate of the
				electricity costs paid by all customers in the State (the denominator). To
				determine the denominator, Board staff shall report the sum of the following:
i. The energy costs, as reported by the
				Energy Information Administration (EIA); and
ii. The capital costs of electric generating
				facilities not otherwise covered in the EIA data amortized over their expected
				life, including, but not limited to, host-owned behind-the-meter solar
				projects.
4. Board staff
				shall calculate the annual cost percentage pursuant to (a) above based on data
				available at the time, including projections where actual data is not
				available.