New Jersey Sees Interconnection Reforms, But Still Unsatisfied

Electricity companies could soon see substantial change in some of the processes needed to build a new power plant in New Jersey, according to NJSpotlight.

The state of New Jersey has been in an ongoing conflict with its electricity suppliers, utility companies and the regional transmission authority because of policies it sees as discouraging the development of domestic generation capacity.

The state adopted electricity deregulation more than a decade ago in 1999, but still faces some of the highest electricity prices in the country in large part because of heavy congestion in the northern parts of the state. New Jersey Governor Chris Christie has pushed the idea of greater domestic production as a solution for this congestion.

But NJSpotlight notes the Board of Public Utilities suggests such developments have been hindered by the long delays and high costs of interconnection into the New Jersey electricity grid. The energy company Hess had planned to build a power plant in the state, but initially delayed the project because PJM Interconnection, the regional grid operator, insisted the company pay for $200-million-worth of transmission improvements, many of them far beyond the borders of New Jersey.

The BPU held an extensive hearing on the subject on Friday, October 14, bringing together legislators, regulators, industry representatives and the public to discuss the issue. One of the most common themes from electricity providers and utilities was that the state's subsidies for particular projects has done as much damage as anything else.

However, PJM did agree that the authority's existing interconnection policies have hurt the state's electricity industry, insisting that it will reform its processes to allow projects that are otherwise prepared to go forward to be fast-tracked. Some worry that this will prove insufficient, since Hess was limited as much by the costs imposed by PJM's interconnection assessment as by the application process.

"We may be using band-aids when more comprehensive changes are needed," John Schultz, vice president of Hess, said at the hearing.

The electricity industry in New Jersey has grown more contentious as the state looks to push through the changes it sees as necessary for its development. NJSpotlight's Tom Johnson wrote for the Teaneck Patch that the state has hired a consultant to investigate the performance of state utility companies in the aftermath of Hurricane Irene. This only adds to the growing tension regarding the new major transmission line to Pennsylvania that many in the state have fought because of its potential impacts on domestic investment in production capacity.