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State's Draft Energy Master Plan Suggests Carbon-Neutrality Requirement For Default Service Electric Supplies

Draft Supports "Strategic" Rollout Of Smart Meters

Says Utilities Should Pilot Demand Response As Part Of Suite Of Rate Design Mechanisms

June 11, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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The State of New Jersey has released its Draft 2019 Energy Master Plan

The draft includes a goal of establishing a 50% RPS by 2030 and discusses challenges in achieving 100% clean energy by 2050 (such as federal policy and leakages in the PJM grid).

In noting these challenges to 100% clean energy, the draft notes that, "Complementary to modeling pathways and scenarios to achieving 100% clean energy by 2050, NJBPU intends to assess the use of its authority over retail sales of electricity (over which the state generally has plenary authority) to reach its most cost-effective and optimized path to 100% clean energy by 2050."

"Such programs could include a carbon-neutrality requirement for Basic Generation Service (BGS) load or a clean energy market that competitively sources carbon-free energy," the draft states

The draft also includes a goal of a, "strategic and coordinated rollout of Advanced Metering Infrastructure."

The draft notes that the BPU has imposed a moratorium on pre-approval until completion of the a Cost-Benefit Analysis (CBA) on the , Rockland Electric Company (RECO) AMI case study.

"However, given that smart meters have reached cost parity with traditional meters and the utilities have established annual meter replacement cycles, NJBPU should consider future replacement of meters with traditional meters rather than smart meters to be an imprudent investment," the draft states

"Upon completion of the CBA and the final Energy Master Plan, NJBPU should consider issuing recommendations to utilities for accelerated AMI installation in a strategic, coordinated, and efficient manner so the state can begin realizing the benefits of a connected grid while also containing costs," the draft states

Discussing AMI customer data, the draft states, "NJBPU should establish statewide standards for utilities and third party providers, and may consider industry standard 'Green Button Connect My Data' in implementing these changes."

The draft also addresses electricity rate design, with a goal of, "pilot and implement modified rate design to encourage customer-controlled demand flexibility, managed electric vehicle charging, and support demand response programs."

"Revised rate design recommendations should also include mechanisms to enable Time of Use rate design or other tariffs to encourage managed demand and load shifting. Importantly, the state should leverage technology to enable customers to become aware of electricity usage and pricing. Recommendations should also establish price signals for electric vehicle charging to incentivize charging during non-peak hours or when there is an abundance of renewable energy," the draft states

"Utilities should additionally pilot demand response incentive programs as a part of a suite of rate design mechanisms to address peak load reductions," the draft states

"Empowering customers with pricing and consumption data, control, and incentives will enable them to manage their energy demand and shift consumption habits to off-peak times. Complemented with Advanced Metering Infrastructure (AMI, or 'smart meters'), which can provide granular data about energy use and costs, such control should include new rate designs, such as Time of Use (TOU) rates to incentivize customers to reduce energy use during periods of peak energy use. Other rate design tools, such as peak-time rebates that provide refunds to customers who adjust their energy consumption upon utility request, have also proven effective. In addition to establishing peak demand reduction goals, NJBPU should explore the development of a Clean Peak Standard for meeting a percentage of New Jersey’s peak demand needs through clean resources that reduce greenhouse gas emissions," the draft states

The draft also generally sets goals including:

• Accelerate deployment of renewable energy and distributed energy resources

• Establish and grow a community solar program

• Develop mechanisms for achieving 600 MW of energy storage by 2021 and 2,000 MW of energy storage by 2030

• Develop 3500 MW of offshore wind power by 2030

• Ensure low-to-moderate income customers have access to various clean energy programs and solutions

The draft is generally silent with regard to the entities seen achieving these goals (e.g. utilities versus competitive supplier), but no prohibition on utility participation is specifically cited

The draft also sets a goal of requiring utilities to establish Integrated Distribution Plans (IDPs) to expand and enhance the location and amount of DER and EVs on the electric distribution system.

The draft includes a goal of instructing utilities to propose and adopt non-wires solutions that encourage complementary private sector investments when seeking expansion or upgrade of the distribution and transmission system or generation source

See the draft here

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