New Jersey Amends Net Metering, Interconnection

The New Jersey Board of Public Utilities (NJBPU) approved amendments to the rules for net metering and interconnection standards to include all Class I Renewable Energy Systems and increasing the allowable generator size to 2 MWs.

Newark, New Jersey – September 27, 2004 [] The changes are aimed at simplifying the process through which renewable energy systems can interconnect with the existing electric grid. The revisions also allows customers to recoup costs of renewable energy systems through net metering. The proposed rules expand the number of customers that can use net metering to help recoup the cost of installing on-site renewable energy systems and add provisions to simplify and expedite the process for customers to interconnect renewable energy systems to the New Jersey electric delivery system. “Upon adoption of these rules, New Jersey will have the most progressive set of regulations governing renewable on-site generation of electricity in the nation,” said Jeanne M. Fox, President of NJBPU. “These revisions enhance the cost-effective, expedited implementation of renewable energy systems and help New Jersey meet the goals set by Governor McGreevey’s Renewable Energy Task Force, which called for an increase in the amount of renewable generation in New Jersey.” The proposed amendments to the rule include a limit to prevent a customer-generator from over-sizing their system to serve more than their own load. The amendments will: – Establish net-metering standards for all Class I renewable energy systems up to 2MWs. – Standardize and simplify interconnection procedures for residential and small commercial customers. Three levels of interconnection as follows: Level 1- inverter-based customer-generator facilities, which have power rating of 10 kW or less; Level 2- customer-generator facilities with a power rating of 2 MW or less and certified by a national recognized testing and certification laboratory as meeting IEEE 1547 and UL 1741 for compliance for operation with an electric distribution system; and Level 3- customer-generator facilities with power rating of 2 MW or less, which do not qualify for either the level 1 or level 2 interconnection review procedures. – Increase the maximum customer-generator capacity for renewable energy systems to two megawatts (2MW) from 100 kW. – Simplify the grid interconnection procedures by clarifying the requirements and making the process more transparent and cost-effective. The amended interconnection rules set strict deadlines on EDCs limiting the costs to applicants of obtaining EDC approval to interconnect. – The amended rules expand the class of customer generators who may be eligible to net meter, by extending the option to all Class I renewable energy technologies permitted to net meter from just wind and solar photovoltaic to include all other Class I Renewable Energy sources such as fuel cells powered by renewable fuels, geothermal technologies, wave or tidal action, and/or methane gas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainable manner. The net metering and interconnection standards establish eligible criteria for “customer-generators” and set limits on eligible system sizes. As required by EDECA (Electric Discount and Energy Competition Act), only residential and small commercial customers are eligible for net metering. A facilities’ peak load demand is used to determine its eligibility for net metering. Small commercial customers are defined as facilities with peak electricity demand up to 10 MW. The maximum system size eligible for interconnection is limited to 2MW. The definition of eligible system size is established to be consistent with the intent that customers install systems designed to serve their own electricity loads. The amendments are consistent with National Association of Regulatory Utility Commissioners (NARUC)’s “Model Interconnection Procedures and Agreement for Small Distributed Generation Resources” and PJM, the mid-Atlantic regional transmission operator, small generator interconnection work group. The amendments were reviewed by PJM, the mid-Atlantic regional transmission operator and found to present no significant challenges to the reliability of the electric transmission system. The BPU will continue to work with the PJM to ensure that future regulations ensure the safe coordination of the system. Under PJM’s current rules, units under 2MW, are not required to submit metered data to PJM. If in the future regulations change to modify the MW size of units operational coordination with PJM may be necessary.

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