Ratepayers will Directly Fund PSE&G’s Solar Extension Plan

New Jersey's Board of Public Utilities (BPU) approved PSE&G's solar extension plan earlier this week, a $446 million move that will be funded directly by ratepayers over the next several years.

About $247 million will go towards the extension of the utility's Solar4All (S4A) program, which seeks to develop solar power installations on brownfields unused landfills and former industrial sites up until 2016. The other almost $200 million will go toward the extension of the utility's Solar Loan program through 2017 that will benefit both residential and business customers seeking to finance their own solar installations. Under the Solar Loan program, PSE&G will lend $200 million to customers over the next three years in order to generate roughly 97.5 MW worth of new solar installations.

Backlash from NJ Consumer Groups

The state's Office of Rate Counsel, which advocates on behalf of New Jersey's energy ratepayers, criticized PSE&G's plan for several reasons. First, it accused the utility of behind-the-scenes negotiation to gain initial approval for the plan in a "parallel settlement process" that excluded opposing viewpoints. The consumer group noted that the S4A extension proposal weakens the authority of the BPU over PSE&G, doesn't set spending limits, doesn't set criteria for competitive bidding on construction, and that the guaranteed cost recovery gives PSE&G an unfair market advantage over the state's other regulated public utilities. According to the Office of Rate Counsel's Director, Stefanie Brand, PSE&G would be allowed to "develop solar facilities without cost or risk, because the Company would be backstopped' by captive ratepayers" who will directly fund the program through rate hikes.

In regards to the Solar Loan program, Brand stated that the oversupply of solar subsidy credits which the state requires utilities to buy from solar producers has decreased their value. Essentially, the consumer group is concerned that smaller players, such as small businesses and homes will lose out on these credits since PSE&G instead of the market will be able to decide who receives the limited number of credits.

A Push for New Jersey Renewables

Despite the backlash, the BPU claims that PSE&G's S4A program is consistent with Gov. Chris Christie's Energy Master Plan, and has already helped to construct a large amount of the state's 33 MW of solar on underutilized land.

Bob Hanna, BPU President, said in a statement, "Today's action continues to push New Jersey to the forefront of solar generation and development The Christie administration's enduring commitment to the advancement of clean, renewable energy technologies, as noted in Governor Christie's Energy Master Plan, allows us to promote clean, safe and reliable in-state generation while promoting job growth and a cleaner environment."

Nevertheless, most feel that the push for renewable in New Jersey is justified despite the disagreements in how to carry out the programs.