RESA Calls for Improvements to New Jersey Solar Legislation

June 5, 2012

New Jersey

TRENTON, NJ— The Retail Energy Supply Association (RESA) is calling for important amendments to New Jersey solar energy legislation to ensure all electricity consumers in the state are treated equitably.

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.

SRECs represent a specific amount of solar-generated electricity and are bought and sold to help electricity providers meet the state’s solar energy requirements. The legislation increasing the SREC requirement is intended to maintain New Jersey’s leading position as a solar energy producing state.

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.

“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, then RESA encourages the legislature to treat existing retail supply contracts the same as wholesale contracts and exempt them from the new higher SREC requirement.

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 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.”

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About RESA

RESA represents competitive energy suppliers dedicated to creating and sustaining vibrantly competitive electricity and natural gas markets for the benefit of consumers. RESA’s members include: Champion Energy Services, LLC; ConEdison Solutions; Constellation NewEnergy, Inc.; Direct Energy Services, LLC; Energetix, Inc.; Energy Plus Holdings LLC; Exelon Energy Company; GDF SUEZ Energy Resources NA, Inc.; Green Mountain Energy Company; Hess Corporation; Integrys Energy Services, Inc.; Just Energy; Liberty Power; MC Squared Energy Services, LLC; Mint Energy, LLC; NextEra Energy Services; Noble Americas Energy Solutions LLC; PPL EnergyPlus, LLC; Reliant; Stream Energy; TransCanada Power Marketing Ltd. and TriEagle Energy, L.P.. For more information about RESA please contact Tracy McCormick, Executive Director at (717) 566-5405.

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About RESA

Together with our members, we play a critical role in educating key stakeholders and are active in support of or opposition to bills that affect competitive electricity markets, consumers, and RESA initiated legislation.

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