FERC Accepts PJM and NJ BPU State Agreement Approach Study Agreement

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The Federal Energy Regulatory Commission accepted the study agreement between PJM and the New Jersey Board of Public Utilities on Feb. 16, marking an important initial step in advancing New Jersey’s offshore wind goals.  

The study agreement implements the New Jersey Board of Public Utilities’ request that PJM incorporate New Jersey’s public policy requirements relating to the integration of 7,500 megawatts of offshore wind generation by 2035 into PJM’s Regional Transmission Expansion Plan (RTEP) via PJM’s State Agreement Approach.  

The State Agreement Approach is a means by which PJM’s RTEP process is responsive to requests from a state, or group of states, that PJM develop transmission that would assist in implementing state public policy requirements. The State Agreement Approach also requires that, should a state (or states) select a state public policy project, the costs related to the project will be recovered from customers in those states that agree to be responsible for the project.

New Jersey is the first state within the PJM footprint to request that PJM initiate the State Agreement Approach, which is a process included in the PJM Operating Agreement.

The Commission-accepted study agreement addresses planning studies PJM will perform to identify system improvements to interconnect and provide for the deliverability of offshore wind generation capacity at specific points of interconnection to the transmission system. The agreement also provides for a competitive proposal window process (set to open in the first quarter of 2021) to solicit transmission project proposals facilitating New Jersey’s offshore wind goals. This window process will proceed in a manner consistent with PJM’s processes for any comparable competitive proposal window, like those convened to address reliability criteria violations or market efficiency drivers.  

Under the agreement, following the close of the window, PJM will analyze the submitted project proposals and make recommendations to the New Jersey Board of Public Utilities, which will ultimately decide whether to select any projects from those submitted. In accepting the study agreement, the Commission noted that the agreement provides transparency to stakeholders regarding State Agreement Approach process milestones and the inclusion of New Jersey’s public policy goals in the 2020–2021 RTEP cycle.