Saturday, December 20, 2014

Fine Print: Promoting Distributed Generation in New Jersey (A-1410)

Synopsis: The bill aims to primarily promote the development of combined heat and power (CHP) plants, a cleaner and more efficient way of producing electricity while potentially lowering energy bills.

Fine Print: Promoting Distributed Generation in New Jersey (A-1410)

Synopsis: The bill aims to primarily promote the development of combined heat and power (CHP) plants, a cleaner and more efficient way of producing electricity while potentially lowering energy bills.

Sponsor: Assemblyman Upendra Chivukula (D-Somerset)

What it aims to do: The bill would establish an alternative energy portfolio standard, a measure that would require the state’s four gas utilities to purchase a proscribed amount of electricity from designated alternative energy facilities each year. It is somewhat akin to what electricity suppliers must do to meet state-mandated requirements to purchase a set amount of electricity from solar systems in New Jersey each year.

How it came about: The state’s Energy Master Plan outlined a goal of building 1,500 megawatts of CHP by 2020, a target that is increasingly looking to be difficult to reach. CHP is viewed as a way to “harden’’ the power grid and reduce outages, particularly at many critical public facilities, such as hospitals, wastewater treatment plants, and other public facilities. The proposed bill is roughly based on a straw proposal developed by the staff of the New Jersey Board of Public Utilities last year.

How it would work: The state’s gas utilities would solicit proposals from the alternative energy facilities to comply with the new requirement to buy electricity from such units. The costs would be passed on to utility customers. In some cases, applicants may receive financial incentives such as grants or reduced interest or interest-free loans from the gas public utility, which also would be passed on to ratepayers.

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