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Background

To help meet New Jersey’s solar electric generation goals, the EDCs have initiated, and
the Board has approved, various solar programs.
 
On April 8, 2008, the Board approved PSE&G’s loan program, which made loans
available to developers and to all customer segments for the development of up to 30
MW of solar projects. On November 11, 2009, the Board approved the extension of
this loan program to finance the installation of an additional 51 MW of solar projects.
Borrowers repay the loans by providing PSE&G with the SRECs generated by their solar
projects. On July 29, 2009, the Board approved an additional solar program through
which PSE&G directly invests in up to 80 MW of solar projects.
 
On March 13, 2009, ACE, JCP&L, BPU Staff, Rate Counsel, and The Solar Alliance
entered into a Stipulation by which JCP&L and ACE agreed to coordinate to the extent
possible and to use essentially the same SREC-based financing program. This
Stipulation outlines the elements of the ACE and JCP&L SREC-based financing program.
The Board approved this Stipulation in its Order dated March 27, 2009, and also stated
that ACE and JCP&L would coordinate their sale of purchased SRECs with the Public
Service Electric and Gas Company auction of SRECs. On December 9, 2010, these
same parties entered into a Stipulation amending the ACE and JCP&L SREC-based
financing program by increasing the size limit from 500 kW to 2 MW and increasing the
flexibility with respect to the developer cap. The Board approved this new Stipulation in
its Order dated January 3, 2011.
 
On July 24, 2009, RECO, BPU Staff, Rate Counsel, and The Solar Alliance entered into
a Stipulation by which RECO agreed to coordinate to the extent possible and to use a
program similar to the SREC-based financing program approved for ACE and JCP&L. This Stipulation outlines the elements of RECO’s SREC-based financing program. The
Board approved this Stipulation in its Order dated July 31, 2009, and also stated that
RECO would coordinate its sale of purchased SRECs with the Public Service Electric and
Gas Company auction of SRECs. On December 9, 2010, these same parties entered
into a Stipulation amending the RECO SREC-based financing program by increasing the
size limit from 500 kW to 2 MW. The Board approved this new Stipulation in its Order
dated January 3, 2011.
 
On November 7, 2008, the Board approved the use of auctions to dispose of SRECs
held by PSE&G. These SRECs include those generated by solar projects in which
PSE&G directly invests and SRECs transferred to PSE&G’s account by borrowers under
its loan programs. The Board also approved the use of these Auctions for SRECs held
by ACE, JCP&L, and RECO. Auctions will be held quarterly. The SREC Auctions will be
open to all SREC market participants, including SREC traders and aggregators, as well
as Basic Generation Service (“BGS”) Suppliers and Third Party Suppliers (“TPSs”) that
have an obligation to acquire SRECs for the purposes of satisfying their obligations
under the RPS and the Solar Act.
 
NERA Economic Consulting is serving as Auction Manager.