N.J. Acts to Lower Capacity Prices in Competitively Neutral Manner

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The New Jersey Board of Public Utilities yesterday awarded three long-term Standard Offer Capacity Agreements to build new mid-merit electric generation facilities, which are anticipated to reduce retail electric rates by $1.8 billion.

The BPU's final order confirms that the long-term capacity contracts will have no impact on the competitive retail market, and will not impact the comparison of Basic Generation Service and competitive rates.

The capacity will be sold into the PJM Reliability Pricing Model, and not dedicated solely BGS customers. As such, a nonbypassable surcharge will be used to collect or disburse any costs/benefits of the contracts.

The UCAP procured by the BPU will be 1,948.5 MW.

Awarded projects were:

- Hess Newark, LLC's Newark Energy Center: 625.0 MW UCAP, initial contract year of 2016-2017

- New Jersey PowerDevelopment LLC's (NRG Energy) Old Bridge CleanEnergy Center, 660.1 MW UCAP, initial contract year of 2015-2016

- CPV Shore, LLC's Woodbridge Energy Center, 663.4 MW UCAP, initial contract year of 2015-2016

All plants are combined cycle gas-fired plants, with 15-year capacity contracts.

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