Ms. Golden:
Thank you for the opportunity to submit written comments on BPU Docket No. QX25050283, the Garden State Energy Storage Program rule proposal, which seeks to enhance the electric grid’s resilience to weather-related disruption, increase New Jersey’s portfolio of capacity resources to accommodate the state’s growing energy needs, and lower electricity rates for New Jersey residents.
Regional Plan Association (RPA) is an independent, non-profit civic organization dedicated to regional planning and development that, since 1929, has published four comprehensive long-term plans to direct the growth and development of the New York-New Jersey-Connecticut metropolitan area. The ideas and recommendations from these plans have shaped the region’s infrastructure, open spaces, and economic development projects for the past century.
Guided by that mission, and our unique vantage point as vocal advocates for both clean and reliable energy sources, RPA strongly supports improving resilience measures to our grid and sustainable solutions to bring down electricity costs.
The proposed rule is a critical step towards scaling up New Jersey’s energy storage infrastructure and grid-resiliency as a whole through implementing the Clean Energy Act of 2018 mandate to deploy 2,000 MW of energy storage by 2030. By using a bifurcated approach in implementation of the transmission and distribution phases and spreading out the incentives over 10-20 years, this rule will secure an organized, long-term transition to a more sustainable and reliable grid.
That said, while we support the rule’s overall direction, we offer comments below and identify areas where further clarification is needed to avoid unintended consequences and improve implementation.
Prioritize Community Outreach and Public Transparency
The GSESP rule proposal states that the BPU will qualitatively evaluate transmission segment projects for what kind of benefits could be offered to the host communities, especially overburdened communities, and how distributed storage could be developed in overburdened communities to improve localized grid resiliency. In doing so, BPU should carry out meaningful and robust community engagement to understand and address community concerns and best meet community needs. Upfront community engagement can avoid future delays brought about by opposition, ensuring timely and successful implementation.
In addition to a robust community outreach program, the BPU should take proactive steps in the marketing and messaging of this program. A strong energy storage system will improve the resiliency of our grid and lower electricity rates for ratepayers. Proactive messaging will help prevent any misunderstanding or misinformation on the safety or reliability of transmission or distributed energy storage.
Connected to proactive messaging is the importance of public transparency. The BPU should develop a public-facing dashboard or commit to an annual report to the legislature to allow the public the ability to monitor the progress of the GSESP.
Ensure that Critical Facilities will be Protected
Ensuring that critical facilities will be powered in times of stress will be a huge benefit from the GSESP. We suggest that, in addition to building transmission and distributed energy storage across the grid, the BPU should also create an incentive track that is specific for critical facilities, such as hospitals, emergency services, water treatment facilities, etc. This program structure will further strengthen the overall resiliency of the grid while preserving the most important functions of our society.
Program Structure and Timeframes
Phase I of the GSESP calls to increase transmission-scale energy storage within the range of 350MW to 750 MW in the initial State fiscal year, and at least 1,000 over multiple fiscal years. The baseline of 350MW is a fairly low target. The GSESP should increase that target to 500MW, to ensure that there is an adequate resource base in a timely manner. Transmission scale energy storage has a lengthy interconnection review and siting and permitting process, and increasing the baseline procurement amount allows for a higher likelihood of projects getting built by the 2030 target. Additionally, there is no stated timeline for the total procurement goal of 1,000 MW, outside of the 2030 target. It is unclear whether this phase will end when Phase II starts, or if it will continue concurrently.
Project Evaluation and Selection
The Proposed Rule outlines that transmission-scale incentives will be awarded to distributed energy storage systems on a first-come, first-serve basis. This method is in contrast with the grid operator PJM’s new interconnection study process, in which it reviews clusters of projects in a first-ready, first-served basis. This is in line with FERC’s Order 2023, which all grid operators must adopt. The state should consider amending the GSESP’s rules to conform with PJM interconnection processes for Phase I to ensure a streamlined study process.
Pre-Development Security
The Proposed Rule requires a 30-month deadline for COD after approval of a project – an appropriate timeline given interconnection, siting, and permitting timelines. However, the Rule then allows for a 36-month grace period if the applicant is behind on the project but demonstrates good cause. We ask for the state to clarify this language – it is unclear whether that 36-month grace period is in addition to the 30-month deadline, or including that deadline. If the former, we ask the State to consider shortening that timeframe. If a project is awarded in late 2026, the 30 month COD allows for a project to be completed in 2028/2029, however a 36-month grace period in addition to the 30 month COD would push projects well past the 2030 target date.
Fixed Incentives for Distributed Resources
The Proposed Rule opens a block of incentives every fiscal year. These incentives are set to be adjusted on a year to year basis depending on market conditions. We are asking for clarification as to whether or not there is a floor or ceiling to the incentives, and whether there is a guaranteed amount of funding they will be releasing annually. If there is no set amount guaranteed, we recommended setting a guaranteed amount for program consistency, offering applicants stability year over year.
Enhanced Incentives for Energy Storage projects in Overburdened Communities
Phase II of the Proposed Rule targets development of distribution level energy storage systems, both behind and in front of the meter. A major focus of this phase is developing distributed energy storage systems in overburdened communities. While this is a great way to reduce the need for peaker plants, often located in overburdened communities, there is a concern of the lack of Class I renewable energy sources in those communities. We ask for clarification on whether Phase II will be paired with other incentive programs, such as SuSI, to build the necessary Class I renewables needed to power the distributed energy storage systems. We also ask for clarification whether these program incentives can be stacked, and encourage a joint application if that is the case. Without pairing phase II with other incentive programs, there likely is not enough Class I renewables necessary to charge the targeted amount of energy storage.
As mentioned previously, it is important to consider community feedback while siting energy storage infrastructure. Overburdened communities have historically hosted polluting energy infrastructure, and may be apprehensive to host more infrastructure, even if it is emissions-free. The program should include host community benefits tailored to specific communities, particularly for those that are already overburdened, when assessing siting batteries. This can only come about through robust community and stakeholder outreach and engagements during the siting and permitting process.
Technical Requirements
There are a number of energy storage projects in the PJM interconnection, some of which have been in it for several years. The current language of the Proposed Rule says that the energy storage systems applying into the program should “be a planned resource if it is a transmission resource interconnecting to the PJM transmission network”. We suggest that the rule clarify whether existing projects currently under review in the PJM interconnection queue are eligible for this program.
We urge the state to clarify the definition of “distributed energy storage system” as well. The definition unintentionally omits third party energy service providers that developers use that are neither customers of the EDC or the EDC themselves.
Payments to Resource Owners
Phase II of the Proposed Rule describes a payment structure in which resources receive payments when they respond to calls from the EDC, and explicitly state that they should receive no penalty for missing a call. We would like clarity on the call process, describing what scenario a resource owner may miss a call, and potentially include a penalty if their resources are not up to a certain standard or threshold, i.e. not being fully charged within 48 hours of a potential call time.
Siting and Permitting
A critical roadblock for energy storage systems in the past has been siting and permitting. Local opposition in siting and challenges obtaining permitting have slowed or stopped projects, partially leading to the slow uptake of energy storage systems in New Jersey. Permitting and zoning reform is critical to the success of the program. While the recent grid modernization rules are a start, we suggest that BPU design model ordinances for municipalities – that reflect community and stakeholder input – to aid in zoning and permitting reform.
Conclusion
RPA appreciates the opportunity to comment on 57 N.J.R. 1651(a), BPU Docket Number QX25050283, Proposed New Rules on the Garden State Energy Storage Program (GSESP). The proposed rule lays out a comprehensive incentive program that will help New Jersey achieve its clean energy goals.
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