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Grid Supply Solar Projects Being Developed on Farmland Face Filing Deadline

July 2012

Grid supply solar developers need to pay particular attention to the solar legislation signed by Governor Christie this week (the “Solar Act”) in light of a recent interpretation of this legislation by the New Jersey Board of Public Utilities (“BPU”). In sum, grid supply solar projects on farmland that are registered under the BPU’s SREC Registration Program may not be qualified to generate SRECs under the new legislation. It is imperative that developers of these projects determine whether they need to file an additional application with the BPU.

By way of background, the Solar Act provides that projects that are not (i) net metered, (ii) an on-site generation facility, (iii) qualified for net metering aggregation, or (iv) certified as being located on a Brownfield, closed landfill or area of historic fill (collectively “Restricted Projects”) during Energy Years 2014, 2015 and 2016, require BPU approval to be eligible to generate SRECs. The Solar Act further provides that projects that are neither net metered nor an on-site generation facility and that are located on land that has been assessed pursuant to the Farmland Assessment Act of 1964 at any time within the 10-year period prior to July 23, 2012 (collectively “Farmland Projects”), shall only be eligible to generate SRECs if (i) they are approved Restricted Projects, or (ii) (a) PJM issued a System Impact Study for the project on or before June 30, 2011, (b) the project developer files a notice with the BPU within 60 days of July 23, 2012, and (c) the project has been approved for the generation of SRECs by the BPU.

On July 25, 2012 the BPU issued a notice (the “July 25 Notice”) referencing the sections of the Solar Act summarized above, and interpreting these sections as preventing the designation of Restricted Projects until the commencement of Energy Year 2014 (June 1, 2013). The July 25 Notice provides that Farmland Projects are eligible to generate SRECs without further BPU approval if, prior to July 23, 2012:

i) they were producing SRECs 
ii) they were registered in the SREC Registration Program, AND
     a. were “authorized to energize” by an Electric Distribution Company
     b. had a Certificate of Completion with a local authority having jurisdiction.

The July 25 Notice further provides that an expedited designation process will be applicable for Farmland Projects (i) that were registered under the BPU’s SREC Registration Program prior to July 23, 2012; (ii) that were issued a PJM System Impact Study on or before June 30, 2011; and (iii) for which the developer files a notice with the BPU within 60 days of July 23, 2012 providing detailed information regarding the project and declaring an intent to qualify pursuant to the Solar Act. For Farmland Projects that have not met the milestones above, developers must also file the notice of intent referenced above; however, such projects are not eligible for expedited review and, in addition, the BPU will consider the following factors in its determination of whether the project should qualify for SREC generation:

i) SRECs to be produced by the facility do not have a detrimental impact on the SREC market or the development of solar power in New Jersey;
ii) Designation of the project would not significantly impact the preservation of open space in New Jersey;
iii) The impact of the designation on electric rates and economic development is beneficial; and
iv) There will be no impingement on the ability of an electric public utility to maintain its property and equipment in such a condition as to enable it to provide safe, adequate, and proper service to its customers.

In light of the foregoing, it appears that a valid SREC Registration Program Acceptance Letter for a Farmland Project may not be enough to ensure that the project is eligible to generate SRECs. Therefore, developers of Farmland Projects must carefully review the Solar Act and the July 25 Notice to determine if they should file an application for designation with the BPU on or before September 20, 2012. 

For more information, please contact a member of Wolff & Samson's Renewable Energy and Sustainability Group:
Stephen A. Kisker | (973) 530-2074 |
Robert H. Crespi | (973) 530-2060 |
John G. Valeri Jr. | (973) 530-2030 |
Michelle A. Schaap | (973) 530-2026 |