In a long-awaited announcement, last week the New Jersey Board of Public Utilities adopted rules to codify the State’s Offshore Wind Economic Development Act. The new rules provide the process for an applicant to submit project information and to propose a pricing method and structure for Offshore Renewable Energy Credits (ORECs) for the Board’s consideration. If approved, each retail provider of electricity in New Jersey will be required to buy Board mandated levels of ORECs in proportion to retail sales.
The application process requires detailed disclosures concerning the proposer’s business information, its collective project experience, and key employees. A proposal must describe the proposed technology, the anticipated schedule for completion, the financial details of the project including a specified cost-benefit analysis, and documentation that the project has applied for all applicable State and federal grants, rebates, tax credits and other incentive programs. In addition, the applicant must describe its anticipated operations and maintenance plan, its decommissioning plan and must provide segregated decommissioning funds. Upon receipt of completion of application, the Board shall approve, conditionally approve, or deny the application within 180 days. Perhaps the most complex aspect of the required application is the cost-benefit analysis. The rules suggest the use of one of four listed input-output models, but will allow applicant to us any model that successfully calculates the economic benefit that the proposed project will bring to the State of New Jersey. The Board will assess the net economic benefit, with a “particular emphasis” on in-state manufacturing employment, as well as the net environmental benefit of the project in terms of anticipated reductions in carbon dioxide and air emissions. The rules also allow the Board to perform its own net benefit analysis, which may result in additional conditions of approval.
Separately, even before the Board issued its rules, Fishermen’s Energy of New Jersey, LLC filed an application for the first phase of its proposed 300MW project offshore Atlantic City.