- Effort is first use of State Agreement Approach included in PJM Operating Agreement.
- New Jersey to explore options for development of reliable transmission solutions through competitive solicitation process.
- PJM to include New Jersey's needs for offshore wind-related transmission improvements in a competitive proposal window set to open in 2021.
PJM Interconnection and the New Jersey Board of Public Utilities recently announced the commencement of a landmark effort to help the state of New Jersey advance its ambitious offshore wind goals through an existing but never-before-used provision of PJM's transmission planning process.
It is the first time a jurisdiction within the PJM footprint has requested that PJM initiate the State Agreement Approach included in the PJM Operating Agreement. The State Agreement Approach provides a path for states to contract for the transmission facilities required to advance their specific energy goals and objectives.
The commencement of the State Agreement Approach includes New Jersey making use of the competitive solicitation process in PJM's existing planning framework to explore options for development of reliable and cost-effective transmission solutions to help bring offshore wind energy to consumers. Transmission component options include grid-to-onshore substations, onshore substations to offshore collector farms, and an offshore transmission "backbone."
Following the request from the New Jersey Board of Public Utilities, PJM will include New Jersey's needs for offshore wind-related transmission improvements in a competitive proposal window set to open in the first quarter of 2021. Transmission developers will be able to submit proposals to address New Jersey's goal of facilitating the infrastructure necessary to deliver a target of up to 7500 MW of offshore wind to consumers over the next 15 years.
The project proposals would be evaluated by PJM in concert with the New Jersey Board of Public Utilities, with the state retaining the right to elect whether to move forward with any specific project proposal.
"This collaboration represents PJM's continued commitment to helping our states advance their public policy objectives," said Manu Asthana, PJM president and CEO. "We are pleased to be able to help New Jersey, in concert with the Legislature's Offshore Wind Economic Development Act, advance its Energy Master Plan and its Offshore Wind Strategic Plan objective."
"PJM has put in a lot of work to help us implement this critical component of Governor Murphy's Energy Master Plan," said Joseph L. Fiordaliso, president of the New Jersey Board of Public Utilities. "We value the expertise and proven competitive transmission planning process PJM is bringing to the table, and appreciate PJM's demonstrated commitment to assist New Jersey in this effort."
After extensive consultation with the Organization of PJM States, PJM added the State Agreement Approach to its Operating Agreement seven years ago in implementing the Federal Energy Regulatory Commission's (FERC's) Order 1000. In that order, the FERC required regional grid operators to "provide for the consideration of transmission needs driven by public policy requirements in the regional transmission planning processes."
The State Agreement Approach enables a state or group of states to propose a state-initiated project to assist in realizing state public policy requirements as long as the state (or states) agrees to pay all costs of the state-selected buildout included in the Regional Transmission Expansion Plan (RTEP). Most RTEP projects have been driven by reliability or market efficiency criteria.
"This is a first step to getting transmission built to advance New Jersey's offshore wind objectives," said Asim Z. Haque, vice president, State and Member Services. "I want to thank the New Jersey Board of Public Utilities for collaborating with our planning team and our new State Policy Solutions unit. PJM remains committed to working with all of our states to help them further their energy goals."