STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
The "New Jersey Town Center Microgrid Pilot Program Act."
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the provision of electric supply to critical facilities through microgrids.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "New Jersey Town Center Microgrid Pilot Program Act."
2. As used in this act:
Board means the New Jersey Board of Public Utilities or any successor agency.
Critical facilities means buildings and facilities that are essential for the delivery of vital services or protection of a community.
Department means the New Jersey Department of Environmental Protection.
Developer means an entity that enters into an agreement with a pilot agency for the design, financing, construction, and operation, or any combination thereof, of a supply of electrical power pursuant to this act.
Distributed energy resource or DER means one or more electric power generation, management, or storage technologies, excluding diesel fuel technologies, located in a pilot agency, that is capable of providing the standard energy needs of a building or structure, or group of buildings or structures, if the normal source of electricity is disrupted due to a power outage.
Division means the Division of Local Government Services in the Department of Community Affairs.
Electrical distribution company means a public utility, as that term is defined in R.S.48:2-13, holding a franchise from the Board of Public Utilities to provide electric distribution service, and whose electrical distribution service territory includes the pilot agency.
Microgrid means a group of interconnected electrical supply loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode.
Microgrid tariff means a tariff approved by the board for the purpose of facilitating the development and operation of a TCDER Microgrid, and which tariff may provide waivers of law and rules, and impose conditions which the board determines to be necessary and appropriate to facilitate the development and operation of a TCDER Microgrid. A microgrid tariff shall not be construed as establishing a precedent with regard to any other tariff subject to board approval.
Offtaker means a party purchasing energy and related products that are produced and delivered from a TCDER Microgrid.
Pilot agency means a municipal, county, or State government entity that participated in the Board of Public Utilities TCDER Microgrid Feasibility Study Program and was informed by the board to have met the feasibility study program requirements.
Power purchase agreement means a contract, between a pilot agency and a developer, for the supply of electrical power from a distributed energy resource to critical facilities through a TCDER Microgrid, which contract may reference a project agreement for the development of a distributed energy resource.
Project means a TCDER Microgrid being developed by a pilot agency pursuant to this act.
Project agreement means a contract, between a pilot agency and a developer, setting forth terms and conditions related to: the scope and location of the project, ownership rights, rights-of-way access, land leases, insurance and bonding, fees and taxes, operation, financing, and related issues not included in the terms and conditions of the power purchase agreement. A project agreement may address the terms of a proposed microgrid tariff and may be conditioned on approval of the tariff. A project agreement shall not relax or modify any applicable requirement for approval under the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).
Town Center Distributed Energy Resources Microgrid or TCDER Microgrid means critical facilities within the municipal boundary of a pilot agency that are connected as a microgrid to one or more distributed energy resources.
3. a. Pursuant to the provisions of this act, and notwithstanding the provisions of any other law, rule, or regulation to the contrary, for the purpose of developing a Town Center Distributed Energy Resources Microgrid to supply electrical power for critical facilities, a pilot agency may enter into a project agreement and a power purchase agreement with a developer.
b. A pilot agency and a developer may enter into a power purchase agreement under this act for a term not to exceed 20 years, subject to the review and approval of the Division of Local Government Services and the Board of Public Utilities.
(1) The Division of Local Government Services shall have the duty and power to review and approve financial matters and risks presented by a power purchase agreement.
(2) The Board of Public Utilities shall have the duty and power to:
(a) review and approve electrical supply and distribution matters of a power purchase agreement;
(b) provide guidance concerning offtaker rates and fees that are necessary for a proposed power purchase agreement; and
(c) adopt a microgrid tariff affecting an electrical distribution company in order to facilitate the development of a project.
c. The board and the division shall each establish application forms and processes for approvals under this act, however, the board and the division may establish a joint application form and process for approvals.
d. (1) The division shall assist a pilot agency in developing a private agencys developer procurement process or request for proposals to ensure that the process or proposals reflects the necessary knowledge, experience, financial capacity, and expertise to develop, construct, and operate an energy supply facility in New Jersey.
(2) The board shall assist a pilot agency in evaluating provisions of a proposed power purchase agreement and tariff, including but not limited to, assistance in matters of energy pricing, maintenance, termination of th