RESA Says N.J. Solar RPS Bill Would, "Drive Competitive Providers Out of the Market"

The Retail Energy Supply Association (RESA) yesterday called, "for important amendments to New Jersey solar energy legislation to ensure all electricity consumers in the state are treated equitably."

RESA noted that this week the Assembly Telecommunications and Utilities Committee will consider legislation (A-2966) that, as proposed, would increase the amount of Solar Renewable Energy Credits (SRECs) that wholesale and retail electric suppliers are required to purchase. The New Jersey Senate passed similar legislation (S-1925) on May 31, 2012.

"The legislation as currently drafted will more than double the SREC obligation, resulting in increased costs that will be passed on to New Jersey electricity consumers. Based on assumptions reflecting the legislation’s intent and projections of anticipated SREC price increases, this change could increase the cost of electricity in New Jersey by $307 million to $400 million annually, increasing costs for consumers by 5 percent to 6.5 percent or $3.51 to $4.56 per megawatt-hour beginning June 1, 2013," RESA said.

However, RESA's immediate concern is with the disparate treatment of retail suppliers and Basic Generation Service suppliers under the bill.

"Not only will this bill increase the prices that all retail customers eventually pay, it singles out customers of competitive retail suppliers for unfair treatment. Customers of competitive retail suppliers are immediately subject to the higher solar energy costs, while customers purchasing under existing wholesale contracts are exempted from those costs," said Jay Kooper, Director of Regulatory Affairs of Hess Corporation and RESA's New Jersey state chair.

"To provide for equitable treatment of all New Jersey electricity consumers and avoid disrupting the state's competitive retail electricity market," RESA is encouraging the Assembly to delay implementation until June 2015 to provide market participants with clear requirements and more time to adjust to them.

Alternatively, if lawmakers are intent on pursuing an earlier implementation date, RESA encouraged the legislature to treat existing retail supply contracts the same as wholesale contracts and exempt them from the new higher SREC requirement

RESA said that, as written, the legislation, "creates an uncertain and administratively complex compliance structure for suppliers because the actual SREC requirements will only be known months after the end of each year and long after the electricity was physically delivered and paid for by retail customers."

"The uncertainty of not knowing what the actual SREC costs are when contracts between competitive electric suppliers and customers are executed will drive competitive providers out of the market, decreasing competitive options for customers and ultimately increasing electricity costs. This uncertainty will also have an adverse impact on the market for SRECs because the buyers who serve customers will not know their actual requirements until after the fact," RESA said.

"RESA supports strong policies to promote renewable energy and many of our members offer an ample variety of renewable energy products and services to customers," Kooper continued. "We look forward to continuing to work with the Assembly Telecommunications and Utilities Committee and the Christie Administration to improve this legislation and ensure it furthers this important policy goal without harming consumers and New Jersey's competitive retail electric market."