New Jersey Legislature Considers Changes to Energy Master Plan

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New Jersey law requires the state to produce an Energy Master Plan (EMP or Plan) every three years. The New Jersey legislature is considering a bill that will require future EMPs to include long-term capacity planning and infrastructure planning.

The goal of each EMP is to “adopt a master plan . . . on the production, distribution, consumption, and conservation of energy,” in New Jersey. The Plan essentially lays out the sitting governor’s strategic vision for New Jersey’s 10-year energy future and includes a mix of policy goals and action plans. The last EMP was released by the Christie administration in 2011 and is available here.

In May 2012, a bill was introduced in the New Jersey Assembly that would make two significant changes to New Jersey’s EMP process. The bill, A2887 was passed by the Assembly 71-0-6 in May 2013. It was reported out of the New Jersey Senate Environmental and Energy Committee on December 5, 2013 (the Senate version is S2758). If the bill is passed by the New Jersey Senate, it will then go to Governor Christie for approval or veto.

The development of each EMP is managed by the statutorily established Energy Master Plan Committee (the Committee). If passed, A2887 will require the chairperson of the Committee to be the president of the New Jersey Board of Public Utilities (the Board) or the president’s designee.

When considering the long-term objectives of the EMP, A2887 will also require the Committee to “analyze the efficiency of generation capacity and the State’s energy infrastructure in relation to the goal of providing for the long-term energy needs of the state and shall, to the extent necessary, make recommendations regarding any policies needed to achieve that goal.”

New Jersey has had concerns over its capacity and generation resources for years. In comparison to other states in the regional wholesale energy market operated by PJM, New Jersey has historically been affected by congestion and corresponding high prices. In an attempt to increase New Jersey’s in-state generation and capacity resources and reduce energy prices, the New Jersey legislature passed the Long-Term Capacity Pilot Program (LCAPP), which was signed into law by Governor Christie in 2011.

However, in October 2013, a federal court held that LCAPP was in violation of the Supremacy Clause of the U.S. Constitution and therefore unconstitutional. A more in-depth discussion of the court’s decision is available here.

If A2887 is passed by the Senate and signed into law by Governor Christie, then the next EMP, which is required to be released in 2014, should contain an assessment of New Jersey’s in-state capacity and generation resources and infrastructure. However, it is likely that if the Committee makes recommendations to increase New Jersey’s in-state generation and capacity resources, those recommendations will come under scrutiny in light of the recent federal decision overturning LCAPP.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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