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Draft New Jersey Energy Master Plan Calls for Lower Dynamic Pricing Threshold
June 8, 2011
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A draft of New Jersey's updated energy master plan calls for the state to, "gradually expose customers with lower energy demands to dynamic pricing."
Specifically, the draft states that, "New Jersey will expand implementation of smart meters and gradually expose customers with lower energy demands to dynamic pricing. Dynamic pricing customers will need the operational functionality that smart meters provide to allow such customers to see and to respond to electricity prices."
No specifics are recommended regarding either the:
- Timetable for any expansion,
- Potential kW thresholds for expanded dynamic pricing, or
- Form of dynamic pricing (hourly, simple Time of Use, critical peak pricing or rebate, etc.)
Currently, customers with demands of at least 750 kW are subject to hourly priced Basic Generation Service.
The draft plan also calls for the state to closely monitor the implementation of the Long-Term Capacity Agreement Pilot Program (LCAPP) projects, which were awarded long-term contracts with the electric distribution companies to reduce capacity prices without distorting the retail market, to ensure that the projected benefits are delivered to ratepayers.
"The Christie Administration is committed to the monitoring of rule changes, regulatory reform, and the pursuit of judicial remedies to the extent action(s) taken by FERC in authorizing modifications to MOPR [Minimum Offer Price Rule] impair New Jersey's goals and objectives under LCAPP."
"New Jersey will continue to participate actively in and, as appropriate, challenge PJM's system planning and wholesale market design processes. In particular, the State should evaluate ways to modify RPM [Reliability Pricing Model] rules to produce more equitable capacity price results across the region. New Jersey residents should be protected from paying premium capacity prices without the benefit of the bargain with respect to modernizing the resource mix in New Jersey," the draft states.
The draft also recommended that the state should consider a procurement process for third party providers of Combined Heat & Power (CHP) facilities. The draft does not specify what parties would be procuring the CHP (e.g. the distribution companies), nor how any energy, capacity, or other products would be utilized or how any costs would be recovered.
The Christie Administration is committed to developing 1,500 MW of CHP generation over the next ten years: 1,400 MW of commercial and industrial applications and an additional 100 MW from district energy systems.
The draft calls for a re-examination of the solar alternative compliance payment (SACP) levels. "One proposal is to reduce the SACP cost by 20% in 2016, and then reduce the annual SACP by 2.54% each year thereafter, in order to reflect the continuing trend," of lower installed costs for solar.
The draft also calls for the RPS to be set at 22.5% in 2021, rather than 30%.
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