On 25 July, the New Jersey Board of Public Utilities (NJBPU) proposed a rule that would establish an offshore wind funding mechanism known as an Offshore Wind Energy Certificate (OREC). The OREC program intends to help the state reach its immediate goal of 1,100 megawatts of offshore wind capacity and pave the way for the ultimate goal of 3,500 megawatts.
Today, the Board has taken this critical step toward setting up a funding mechanism so that the state can fully tap into an increasingly important form of clean and renewable energy,
…said NJBPU President Joseph L.
The OREC rule would establish the processes by which an offshore wind project receives funds and how revenues earned from the project flow back to ratepayers. Additionally, the rule describes the roles and responsibilities of each of the parties in the offshore wind development process. These include the state’s electric companies, qualified offshore wind developers, suppliers, and the OREC administrator.
In recent months, New Jersey has placed a heavy emphasis on offshore wind and clean energy as vital tools in the fight on climate change. These measures, Governor Murphy said, are essential when it comes to building the region’s environmental and economic future.
There has been more activity in the first six months of this administration when it comes to achieving our offshore wind goals than there was in the eight years since the signing of the Offshore Wind Economic Development Act. We know we must act swiftly to achieve our goals and build a strong offshore wind industry here in New Jersey. This action by the Board today shows we are truly all-in on offshore wind.
The OREC funding mechanism requires the electric companies to designate funds based on the Board approved number of megawatt hours and the OREC price. Companies would then make a monthly payment to OREC developers based upon the number of megawatts generated by the project.
After the developers receive payment, they would transfer ORECs to suppliers and then the developers would refund all revenues to ratepayers through the electric companies. Additionally, all suppliers would be required to retire a sufficient number of ORECs each year to meet the offshore wind renewable portfolio standard set by the Board.
The proposed rule will be published in the New Jersey Register and public comment will be accepted. The NJBPU will then consider any potential changes before the rule is considered for adoption.
