N.J. governor signs sweeping energy legislation, including controversial nuclear ZEC bill

New York (Platts)--23 May 2018 335 pm EDT/1935 GMT

New Jersey Governor Phil Murphy Wednesday signed multiple energy-related legislative initiatives designed to address climate change and advance clean energy, including a controversial bill to provide economic support to the state's nuclear power industry.

"Today, we're taking another step forward in rebuilding New Jersey's reputation as a leader in the development of clean energy sources while fulfilling a critical promise to foster our state's energy future," Governor Murphy said in a statement.

The legislation includes renewable energy bill A-3723 and nuclear power zero-emissions certificate bill S-2313. The governor also signed an executive order to update the state's Energy Master Plan to achieve 100% clean energy by 2050.

The renewable energy bill includes several initiatives:

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* A Renewable Energy Standard requiring 21% of the energy sold in the state come from Class I renewable energy sources by 2020, 35% by 2025, and 50% by 2030.

* A solar energy provision that reforms the state's solar program by making near-term structural changes that include transitioning away from solar renewable energy credits to ensure that the program is sustainable over the long term.

* The bill codifies the governor's goal of 3,500 MW of offshore wind by 2030. It also reinstates an expired program to provide tax credits for offshore wind manufacturing activities.

* A requirement that each utility implement energy efficiency measures to reduce electricity usage by 2% and natural gas usage by 0.75%.

* The bill establishes a community solar program.

* A provision to install 600 MW of energy storage by 2021 and 2,000 MW by 2030 is also included.


The nuclear legislation would allow the 2,296-MW Salem nuclear plant co-owned by PSEG and Exelon Generation, and PSEG's fully owned 1,172-MW Hope Creek nuclear plant to receive zero-emissions certificate payments. It would require each electric public utility to file a tariff with the Board of Public Utilities to receive a 0.4 cent/kWh charge from its retail distribution customers meant to reflect the emissions avoidance benefits of continued nuclear plant operation. Without the legislation, the companies said they could close the facilities.

"The Salem and Hope Creek nuclear plants play pivotal roles in New Jersey's economy and environment, and Governor Phil Murphy is to be commended for signing into law today a Zero Emissions Credit program to help preserve these critical energy assets," trade group Nuclear Energy Institute, said in a statement.

Nuclear plants seeking to participate in the program would be required, among other things, to demonstrate that they "make a significant contribution to New Jersey air quality and that they are at risk of closure within three years," the statement said.

Critics, however, claim the plants are profitable and do not require the rate-payer-funded bailout. Trade group Electric Power Supply Association president and CEO John Shelk said in an April statement that the ZEC legislation is "deeply flawed" and "a bailout of New Jersey's profitable nuclear power plants would undermine competition in the broader PJM [Interconnection] markets and thus unfairly harm competitors who depend on those markets."


In addition, Governor Murphy signed Executive Order No. 28 that directs state agencies to develop an updated plan to provide a path to 100% clean energy by 2050. "The new EMP is to be completed and delivered by June 1, 2019 and will provide a blueprint for the total conversion of the State's energy production profile to 100 percent clean energy sources by January 1, 2050," the statement said.

"This landmark legislation and executive order show that New Jersey is serious about rapidly adopting clean, renewable energy With these actions, Gov. Murphy is making New Jersey a national leader in the transition away from fossil fuels toward a healthier and more prosperous clean energy future," Tom Gilbert, campaign director, ReThink Energy NJ and New Jersey Conservation Foundation, said in a statement.

--Jared Anderson,

--Edited by Rocco Canonica,

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