The New Jersey Board of Public Utilities (NJBPU) has proposed a rule that would establish an offshore wind funding mechanism known as an Offshore Wind Energy Certificate (OREC).
The OREC program will help the state reach its immediate goal of 1,100MW of offshore wind capacity and will pave the way to meeting Governor Phil Murphy’s ultimate goal of 3,500MW, NJBPU said.
The OREC rule would establish the processes by which an offshore wind project receives funds and how revenues earned from the project flow back to ratepayers.
Additionally, the rule describes the roles and responsibilities of each of the parties in the offshore wind development process. These include the state’s electric companies, qualified offshore wind developers, suppliers, and the OREC administrator.
The OREC funding mechanism requires the electric companies to designate funds based on the BPU approved number of megawatt hours and the OREC price. Companies would then make a monthly payment to OREC developers based upon the number of megawatts generated by the project. After the developers receive payment, they would transfer ORECs to suppliers and then the developers would refund all revenues to ratepayers through the electric companies.
Additionally, all suppliers would be required to retire a sufficient number of ORECs each year to meet the offshore wind renewable portfolio standard set by the Board.
The proposed rule will be published in the New Jersey Register and public comment will be accepted. The NJBPU will then consider any potential changes before the rule is considered for adoption.
In recent months, Governor Murphy and NJBPU President Joseph L. Fiordaliso have placed a heavy emphasis on offshore wind and clean energy as vital tools in the fight on climate change, according to NJBPU. These measures, Governor Murphy said, are essential when it comes to building New Jersey’s environmental and economic future.
“There has been more activity in the first six months of this administration when it comes to achieving our offshore wind goals than there was in the eight years since the signing of the Offshore Wind Economic Development Act,” Governor Murphy said.
“We know we must act swiftly to achieve our goals and build a strong offshore wind industry here in New Jersey. This action by the Board today shows we are truly all-in on offshore wind.”