A 3969 — Increases solar development goals of SREC-II program and extends certain target dates of program to 2035.

A3969 1R [First Reprint] ASSEMBLY, No.

  CURRENT VERSION OF TEXT      IntroducedAs Pendingreported Technicalby Reviewthe byAssembly LegislativeTelecommunications Counsel.and Utilities Committee on February 12, 2026, with amendments.

       1.    Section 2 of P.L.2021, c.169 (C.48:3-115) is amended to read as follows:follows:       2.    a.  There is established in the Board of Public Utilities a program to be known as the SREC-II program, which shall serve as the successor program to the SREC program established pursuant to section 38 of P.L.1999, c.23 (C.48:3-87).  The goal of the program shall be to provide incentives for the development of at least [3,750] 1[6,500] 7501 megawatts 1per year1 of new residential, commercial, industrial, and grid-scale solar power generation 1[by] until1 [2026, although this goal may be extended or revised by the board] 2035.

     2.    a.  There is established in the Board of Public Utilities a program to be known as the SREC-II program, which shall serve as the successor program to the SREC program established pursuant to section 38 of P.L.1999, c.23 (C.48:3-87).  The goal of the program shall be to provide incentives for the development of at least [3,750] 6,500 megawatts of new residential, commercial, industrial, and grid-scale solar power generation by [2026, although this goal may be extended or revised by the board] 2035.

     b.    The board shall develop, as part of the SREC-II program, a process for the creation and distribution of renewable energy certificates, to be known as "SREC-IIs,"“SREC-IIs,” for each megawatt hour of energy produced by a qualifying solar electric power generation facility for a duration established by the board.  The board shall also establish a system by which to distribute a renewable energy incentive payment, to be known as the "SREC-II“SREC-II value per megawatt-hour,"megawatt-hour,” to the owner of an eligible solar electric power generation facility, which shall be measured in dollars-per-megawatt-hour of solar power generation, and which shall represent the value of the environmental attribute produced by the solar electric power generation facility.  SREC-IIs shall be transferable and capable of being used by an electric power supplier or basic generation service provider to satisfy the State's renewable portfolio standards established pursuant to section 38 of P.L.1999, c.23 (C.48:3-87).  SREC-IIs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following energy year.

     c.   c.     No later than one year after the effective date of P.L.2021, c.169 (C.48:3-114 et al.), the board shall adopt, pursuant to the "Administrative“Administrative Procedure Act,"Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations establishing the SREC-II program in accordance with the provisions of P.L.2021, c.169 (C.48:3-114 et al.).

     e.   e.     The costs of the SREC-II program shall be apportioned to ratepayers using a methodology approved by the board.  Except as provided in subsection h.

of section 4 of P.L.2021, c.169 (C.48:3-117), the methodology shall be similar to that by which the board apportions the costs of SRECs and other renewable energy certificates pursuant to section 38 of P.L.1999, c.23 (C.48:3-87) and consistent with the competitive retail market established by the "Energy“1[Energy] Electric1 Discount and Energy Competition Act,"Act,” P.L.1999, c.23 (C.48:3-49 et al.).

(cf:(cf:  P.L.2021, c.169, s.2)        2.    Section 3 of P.L.2021, c.169 (C.48:3-116) is amended to read as follows:

P.L.2021, c.169, s.2)        2.    Section 3 of P.L.2021, c.169 (C.48:3-116) is amended to read as follows:

     c.   c.     The small solar facilities incentive program shall include criteria by which to assign an SREC-II value per megawatt-hour to a solar electric power generation facility.  The criteria shall be designed by the board to incentivize the development of new solar power projects sufficiently so that the goals for solar power development in the State's Energy Master Plan are met, to further other State goals, and to incentivize projects that are especially in the public interest.  The SREC-II value per megawatt-hour may include the value of the environmental and other benefits to the State provided by the facility, as determined by the board.  The criteria may include, but is not limited to, consideration of the following factors:

     (1) the the size of the facility;

     (2) the the costs and revenues associated with representative facilities;

     (3) for for community solar facilities, the economic and demographic characteristics of the area served by the facility, including whether it is located in an overburdened community, as that term is defined in section 2 of P.L.2020, c.92 (C.13:1D-158);

     (4) whether whether the facility is located on already developed land or the built environment;

     (5) the the facility's eligibility for net metering pursuant to subsection e.

and      (6) the the rate class of the facility, as determined by the appropriate New Jersey electric public utility or local government unit.

     4.    a.  The board shall develop and administer, as part of the SREC-II program, a transparent, fair, and competitive solicitation process for awarding SREC-II contracts to promote the construction of solar electric power generation facilities.       (1) (1)   In order to be eligible to participate in the solicitation process, a solar electric power generation facility shall be:

     (b) (b)   constructed after the effective date of P.L.2021, c.169 (C.48:3-114 et al.);

and      (d) (d)   sited in conformance with the siting criteria established by the board pursuant to section 6 of P.L.2021, c.169 (C.48:3-119).

     (2) (2)   The board shall develop additional eligibility criteria and application processes for participation in the solicitation process.

     c.   c.     Solicitation rounds shall occur at least as frequently as once every 18 months, beginning on the effective date of P.L.2021, c.169 (C.48:3-114 et al.) and ending no earlier than January 1, [2026] 2035.  The solicitation process shall:

     (1) (1)   be open on a non-discriminatory basis to any entity seeking to construct a solar electric power generation facility that complies with the provisions of subsection a.

     (2) (2)   be carried out in accordance with criteria developed by the board and applied equally to all responses to the solicitation;

     (3) (3)   award contracts for SREC-IIs to promote the construction of solar electric power generation facilities for no less than an average of 300 megawatts per year, for [five years] the duration of the program, with the first awards made no later than 18 months after the effective date of P.L.2021, c.169 (C.48:3-114 et al.);

     (4) (4)   award projects selected as part of the competitive solicitation process the right to receive a renewable energy incentive payment, in the form of an SREC-II value per megawatt-hour established by the board, for the environmental attribute produced by the solar electric power generation facility, for a duration to be established by the board.  The SREC-II value per megawatt-hour may include the value of the environmental and other benefits to the State provided by the facility, as determined by the board;

     (5) (5)   ensure that the length of any award is sufficient to encourage low financing rates, reasonable risks to ratepayers, and to enable the development of affordable renewable energy resources;

     (6) (6)   mitigate price and delivery risks for consumers;

     (7) (7)   include requirements designed to ensure successful completion of projects, including, but not limited to, the imposition of appropriate escrow fees, bid maturity requirements, required interconnection milestones, and conditions on when a project must achieve commercial operation;

and      (8) (8)   ensure that the environmental and public health benefits of solar electric power generation facilities on contaminated sites or landfills are recognized, including accommodating the long development timescale for these projects.

     e.   e.     The board shall determine, in consultation with the Department of Environmental Protection, if a solar electric power generation facility may be sited on a contaminated site or landfill for the purposes of this section.  If the board authorizes a facility to be sited on a contaminated site or landfill, the facility shall be afforded the protections provided in paragraph (2) of subsection t.

     (1) (1)   rank all bids received based on the bid price, or, pursuant to subsection b.

     (2) (2)   select bids in ranked order, up to the procurement budget set by the board, or, pursuant to subsection b.

and      (3) (3)   adjust quantities awarded [if prices are above or below any confidential pre-determined thresholds] based on the bid thresholds or cost containment measures established pursuant to subsection d.

STATEMENT        This bill would extend to 2035 the date by which the SREC-II program is to meet its new goal of incentivizing the development of at least 6,500 megawatts of new solar power generation.  Under current law, the program’s goal is to incentivize the development of 3,750 megawatts of solar generation by 2026.

     The SREC-II program includes a small solar facilities incentive program.  This incentive would award SREC-IIs to community solar facilities and net metered solar facilities less than five megawatts in size.  This bill expands the goal of the small solar facilities incentive program to provide SREC-IIs for the development of at least 300 megawatts of net-metered solar facilities per year, 3,000 megawatts of community solar facilities between October 1, 2025 and December 31, 2029, and at least 150 megawatts of community solar facilities per year thereafter, and megawatts of solar facilities in the remote net metering, for the duration of the SREC-II program.

     This bill modifies the SREC-II program’s competitive solicitation process for the award of SREC-IIs to net meter solar facilities greater than five megawatts in size and to grid supply solar facilities by permitting the Board of Public Utilities to establish cost containment measures when conducting competitive solicitation.  This bill would extend the minimum duration of the competitive solicitation process until 2035.