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The comparatively modest maximum annual incentive of $200/kW over 10 years reflects the “private resilience value of residential energy storage systems,” state regulators said.
In a statement, BPU President Ben Hertz-Shargel tied the Aug. 17 proposal to an executive order signed by Democratic Gov. Mikie Sherrill shortly after taking office on Jan. 20. It directed the BPU to issue solicitations for new solar and storage capacity and to begin developing a virtual power plant program open to third-party energy suppliers.
“The Garden State Energy Storage Program advances Governor Sherrill’s Executive Order No. 2 by growing energy storage deployments in-state to meet growing energy demand while improving affordability and resilience,” Hertz-Shargel said.
Residential and small commercial batteries would be eligible to participate in a temporary, technology-neutral VPP program that will begin next year and run for two years before transitioning into a market-based, open-access VPP tariff in 2029, the BPU said last month in a separate straw proposal.
The BPU refers to the capacity discussed in last week’s straw proposal as “Distributed Storage Capacity Block 1.” Its primary objective is to reduce peak demand on New Jersey’s electric distribution system through coordinated discharge, which “will help avoid future capacity obligations and system costs, thereby accruing savings to all residential customers,” according to the straw proposal.
Block 1 will provide a “temporary incentive” and near-term capacity to support the transitional VPP program, along with already-deployed behind-the-meter storage systems eligible for legacy incentives, according to the proposal. Once opened for enrollment, Block 1 will be the sole incentive framework available for new residential storage resources, though enrolled capacity will be eligible for “additional incentives or compensation mechanisms” that become available through a future tariff, the BPU said.
The proposal also frames Block 1 as a large-scale test for possible future blocks of distributed storage capacity. Those blocks could differ in “compensation mechanism design, eligible resources, and operational frameworks, based on market evolution and lessons learned from Block 1 implementation and other BPU workstreams,” it says.
The proposal envisions the four electric distribution companies calling dispatch events to mitigate local congestion, distribution-level thermal constraints and other abnormal grid conditions. The BPU said it looked at similar programs in other states and conducted its own gap analysis to arrive at the $200/kW maximum annual incentive, which it said factors in “the private resilience value of residential energy storage systems.”
“This decision reflects [BPU staff’s] assessment that many consumers have some willingness to pay for resilience and thus do not require an incentive high enough to render the net cost of battery back-up power [to] zero,” the BPU said.
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Utility associations supported the 2024 efficiency requirements for distribution transformers and oppose their repeal. The rule may threaten national security, DOE says.
“We know that Cottonwood isn't the shiniest new plant out there,” Entergy CEO Drew Marsh told analysts. The deal is “increasingly in doubt,” one says.
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“There is no debate that voltage and frequency excursions on the transmission network create reliability concerns, which increase with the interconnection of each new large computational load,” wrote a PUC staffer.
There appears to be broad support for strengthening the independence of the grid operator’s board, possibly by moving to an advisory stakeholder process, and giving states more influence. Some also called for codifying the public interest in PJM’s mission.
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