Community Solar Energy Pilot Program

The New Jersey Board of Public Utilities (“NJBPU”) is currently accepting applications for “community solar” projects as part of its Community Solar Energy Pilot Program (the “Community Solar Program”). Community solar projects include solar installations owned and operated by a community as well as installations owned and operated by a third-party that shares electricity with a community. Participating members of the community (known as subscribers under the Community Solar Program) receive a credit on their utility bills for their participation in a community solar project. Thus, a community solar project enables access to solar energy to electric utility customers who have previously been unable to participate in solar energy due to a variety of barriers.
The New Jersey Community Solar Program aims to approve a sizable number of individual community solar projects, each generating up to 5 megawatts of power per year, for a total capacity of 75 megawatts annually. The NJBPU plans to open two more application windows—one in 2020 and one in 2021—with the goal of adding at least 75 megawatts of additional capacity each year. According to the NJBPU, the three year Community Solar Program will generate enough energy to cover the electric usage of 45,000 residences.
The current open application window provides ample opportunity for developers of all kinds to get involved with solar power. For example, according to the NJBPU, an applicant may be a project developer, project owner, project operator, municipality, contractor, installer, or site owner. The application form must be submitted and completed by the close of the application period on September 9, 2019 at 5:00 p.m. in order to be considered for the Program. The application form contains detailed questions regarding the proposed project;  among them, the application form requires the applicant to identify all permits needed for construction and operation of the proposed community solar facility and, in most instances, to meet with the NJDEP Office of Permit Coordination and Environmental Review. An application that does not completely answer all questions (including the listing of all necessary permits) will be deemed incomplete and will not be considered by the NJBPU for acceptance into the Community Solar Program.

Application will be approved based on a point system to incentivize certain types of projects. The NJBPU will consider projects in order of highest to lowest total point score until the 75 megawatt limit is reached. Projects will be scored on the following criteria:

  • Up to 30 points if 51% or more of the energy capacity is provided to low/moderate income residents.
  • Up to 20 points for projects located on certain property such as landfills, brownfields, areas of historic fill, rooftops, or parking lots.
  • Up to 15 points if the project guarantees savings to customers. Savings of greater than 10% and flexible cancelation terms for customers receive high preference, while projects that guarantee greater than 5% have medium preference.
  • Up to 10 points for projects with community and environmental justice engagement. Higher preference is given for partnerships with municipalities, local community organizations, and affordable housing providers, while medium preference is given for a letter of support from a municipality or if the project owner is a government entity.
  • Up to 10 points for projects that provide more than 51% of capacity to residential customers.
  • Up to 10 points for projects that create local jobs, or demonstrate other co-benefits, such as a micro-grid or energy efficiency measures.
  • Up to 5 points if subscribers are limited to the municipality or adjacent municipality in which the project is located.

Projects accepted into the Community Solar Program will be eligible to apply for Solar Renewable Energy Certificates (“SRECs”). However, developers should note that projects seeking SREC eligibility must apply for SRECs prior to delivering any energy, and must begin commercial operations prior to the NJBPU’s determination that the state has attained 5.1% of kilowatt hours sold in New Jersey from qualifying solar electric power generators when the SREC program closes to new registrations.

In the event that new solar incentives are established before or after the close of the SREC program, it seems likely that these incentives would be available to projects accepted into the Community Solar Program.
For more information, please contact the author Martin J. Milita, Esq.,  or any member  of  our Duane Morris Government Affiars, LLL Team.

NJDEP Proposes Category One Designation for 749 Miles of Rivers and Streams

The New Jersey Department of Environmental Protection (NJDEP) has proposed to change Surface Water Quality Standards antidegradation designations for 749 miles of rivers and streams in New Jersey. The changes will heighten standards for regulated discharges to those waterbodies and extend the applicable Flood Hazard Area Control Act riparian development buffer from the current 150 feet to 300 feet. The buffer restricts development and excludes sewer service for development.

Antidegradation designations provide three levels of regulation for surface waters – including Outstanding Natural Resource waters (primarily in the Pinelands), Category One waters and Category Two waters. The waterbodies subject to the proposed redesignations are currently Category Two, which means that water quality is permitted to decrease based on social or economic justifications. The proposed redesignation to Category One will prohibit any measurable change to water quality, and, therefore, new or expanded wastewater discharges must maintain the existing water quality of the receiving waterbody.

Of the total 749 additional miles proposed to be added to Category One, 734 miles are proposed for redesignation based on NJDEP’s findings of exceptional ecological significance and 53 miles are based on exceptional fisheries resources (with 38 miles of overlap). Waterbodies are deemed exceptional fisheries resources when fish surveys reveal naturally reproduced trout in their first year of life. A waterbody is considered to have exceptional ecological significance if it has either habitat suitable for at least one of seven endangered species documented to live there or if the waterbody includes an exceptional aquatic community. An exceptional aquatic community has a healthy community of small aquatic animals (like snails, larvae and worms), and at least two of the following: optimal habitat, excellent fish community, compliance with water quality criteria, and limited impervious surface runoff. Approximately 137 miles are proposed based on endangered species habitat while 600 miles are based on exceptional aquatic community.

Of note, the proposed Category One designations include tributaries of the river segments that NJDEP claims qualify for redesignation. Previously, NJDEP prohibited discharges to upstream tributaries that would result in a measurable change to water quality at the Category One boundary. As a result of this changed approach, the tributaries identified in the rule, which have not been shown to have either exceptional ecological significance or exceptional fisheries resources, will now have 300 foot development buffers.

Waterbodies impacted by the proposed rule are listed below. Details regarding the specific segments of the waterbodies slated for redesignation are set forth in the proposed rule, available here. Property owners within 300 feet of the redesignated waters may be impacted by these rule hanges. The public hearing is scheduled for April 8, 2019 at 1:00 PM at the New Jersey Forensic Science Technology Center Auditorium in Hamilton. Written comments are due May 3, 2019.

The proposed redesignations apply to portions of the following waterbodies:

Atlantic Coastal Basin: Tuckerton Creek and Westecunk Creek.

Upper Delaware River Basin: Brookaloo Swamp, Paulins Kill West Branch, Beaver Brook, Blair Creek, Furnace Brook, Jacksonburg Creek, Jacobs Creek, Lubbers Run, Cowboy Creek, Mountain Lake Brook, Paulins Kill, Pequest River, Pond Brook, Swartswood Creek, Weldon Brook, Merrill Creek Reservoir, Mine Brook Tributary, Musconetong River tributaries, Pohatcong Creek, Pophandusing Brook, Scout Run.

Lower Delaware River Basin: Cohansey River, Cooper River, Crystal Creek, North Run Tributary, Raccoon Creek, Salem River, Woodbury Creek, Blackwater Brook, Maurice River, Burnt Mill Brook, Fishing Creek, Breen Brook, Indian Run, Little Robin Brook, Manatico Creek, Maurice River, Muddy Run, Oldmans Creek, Old Robins Branch of Dennis Creek, Still Run.

Passaic, Hackensack and New York Harbor Complex Basin: Whippany River, Bear Brook, Cresskill Brook, Fox Brook, Ramapo River tributary west of Woodstock, Spring Brook, Stone House Brook.

Upper Raritan River Basin: Lamington River, Neshanic River, Pleasant Run, Prescott Brook, North Branch of Raritan River, South Branch of Raritan River, Rock Brook, Turtleback Brook, Beaver Brook, McVickers Brook.

Wallkill River Basin: Beaver Run, Clove Brook, West Branch Papakating Creek, Rutgers Creek, Wallkill River, Morris Lake.

New Jersey BPU Adopts Community Solar Regulations

On February 19, 2019 the New Jersey Board of Public Utilities (“BPU”) formally adopted its proposed regulations (the “Regulations”) regarding the Community Solar Pilot Program (the “Pilot Program”).  Although there are some minor clarifications, and 339 published comments, there are no material changes to the proposed regulations that were published for comment on October 1, 2018.

The first year of the Pilot Program began upon adoption of the Regulations on February 19, 2019, and will end on December 31, 2019.   The remaining two years of the Pilot Program will be calendar years 2020 and 2021.

The next step for the BPU will be to adopt the proposed regulations regarding the form of application which were published on November 28, 2018, and to begin accepting applications.

For further information contact the author. 973-222-1855

New Jersey Legislation and Regulation to Watch in 2018.

An income tax increase for millionaires, a minimum-wage hike and an effort to legalize recreational marijuana will likely be atop New Jersey officials’ agenda in 2018.

Governor Elect Murphy and the Democrat-controlled state Legislature are expected to pursue marijuana legalization as well as the so-called millionaire’s tax and an increase in New Jersey’s minimum wage to $15 an hour.

Two other potential measures may be legislation that bans nondisclosure agreements in cases of sexual harassment and other misconduct, and a bill limiting noncompete agreements between businesses and employees.

Here’s a roundup of the legislation and regulation to keep an eye on in 2018.

Millionaire’s Tax

One of the initial challenges facing  State officials this year will be finding the dollars to plug a projected deficit and cover new spending priorities in a balanced state budget — a feat that will likely involve seeking additional revenue from a millionaire’s tax.

Minimum-Wage Hike

Just as the legislature will try to institute the millionaire’s tax, they are expected to pursue the minimum-wage hike previously rejected by Chris Christie.

In 2016 he vetoed Democrat-backed legislation — Assembly Bill A-15 — which would have raised the then-rate of $8.38 an hour to $10.10 at the start of 2017, with incremental, annual boosts from 2018 to 2021 until the minimum hourly wage reached $15. After 2021 the wage would have increased by any upward change in the consumer price index.

Based on a referendum approved by voters in 2013, which approved annual adjustments to the state’s minimum wage based on the consumer price index, the minimum wage increased last year to $8.44 per hour, and the rate is slated to jump to $8.60 on Jan. 1.

Murphy has expressed support for gradually increasing the minimum wage to $15 an hour.

Recreational Marijuana

Nearly eight years since New Jersey officials approved legislation authorizing the medical use of marijuana, Murphy and state lawmakers are eyeing the legalization of the drug for recreational purposes. But  cannabis is projected by many experts  to be a tougher business than people want to  credit citing the upfront costs and the amount of time before such enterprises turn a profit.

Banning Nondisclosure Agreements

In the wake of sexual harassment and related claims sweeping across various parts of American society, New Jersey officials have been considering a legislative measure that would ban nondisclosure agreements in such cases.

Under that legislation — introduced last month as Senate Bill S-3581 and Assembly Bill A-5287 — “a provision in any employment contract or agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.”

Citing cases involving disgraced Hollywood mogul Harvey Weinstein and other high-profile figures, Sen. Loretta Weinberg, D-Bergen, the sponsor of the Senate bill, said in a Dec. 4 statement: “Banning nondisclosure agreements related to sexual harassment and other misconduct is critical. The intent is to prevent perpetrators from using these agreements to silence victims and to cover up offenses that often they end up committing again.”

The legislation will likely be reintroduced in the upcoming legislative session.

Limiting Noncompete Agreements

Another legislative measure that may resurface in the next session is a proposal that would limit the types of workers that could be subject to noncompete agreements as well as the scope of those restrictive covenants.

Among other provisions, that legislation — introduced over the past two months as Senate Bill S-3518 and Assembly Bill A-5261 — states that noncompetes would be unenforceable against an employee who worked at a business for less than a year and that the agreements could only prevent an employee from working for a competitor for a year after being terminated by a company.

Under the legislation, the agreements also could not prohibit a worker from seeking employment in other states.

Martin J. Milita

Duane Morris & affiliates

222 West State Street, Trenton, NJ 08801

Direct Dial: 973-222-1855

Part 6- Defining Public Accountability for PPPs

Accountability has long been recognized as the cornerstone of successful public management.

In an environment of proliferating partnerships, the tools of government needed to maintain accountability are not the same as those needed for insular agency activities. PPPs change the dynamics of public accountability by involving private partners in government decision making and program delivery. The terms and conditions of this involvement deserve careful scrutiny and understanding by public officials, before entering into a PPP, as private partners enter into these arrangements for different reasons than governments. While governments work to serve the public in capital investment projects, private partners are understandably focused on recouping their investment and on generating a profit. Accountability in PPPs requires the creation of proper safeguards to ensure that public services are not compromised for the sake of private profits.

In this sense, public entities need to consider not only the mechanisms they will use to hold their private partners accountable, but also how government will be accountable to their private partners.  In place of vertical chains of authority in typical bureaucratic institutions, or principal–agent relations in short-term contracts, the horizontal relations in PPP arrangements place unique challenges on public managers. PPPs display a variety of these horizontal relationships through collaborative mixing, consensual decision making, and other recognized characteristics of organizational partnerships. While these characteristics vary, the nature of such agreements fosters organizational interdependence at greater levels than that achieved through short-term contracts.

Thus, Public sector employees are called upon to serve many, sometimes conflicting stakeholders through both informal and formal control mechanisms. Informally, public managers’ report not only to a multitude of elected officials, but also to a plethora of interest groups, clientele, media, and other actors.

Part 5- The Uniqueness of PPP

PPPs reflect a unique relationship between the government and a private firm- the government retains ultimate responsibility for the delivery of the good or service, but becomes a partner with the private sector in decision making and delivery.

While there are many reasons for the creation of PPPs, they are often justified on

one fundamental assumption and one fundamental presumption. The accuracy of these two conditions—and they vary from case to case—illustrate both the promise and the pitfalls of PPPs with regard to public accountability.

The assumption is that governments often do not have the in-house knowledge of the most

Cost-effective ways to deliver many types of public goods and services—either directly or through contracts. Governments have radically reduced their research and development capacity and increasingly have relied on consulting firms to do their thinking and even to manage their contracts.

Moreover, with globalization governments simply may not possess the prerequisite knowledge, capacity, or managerial skills. When this is the case, governments need to engage partners that have the necessary expertise, know- how, and managerial adroitness needed to carry out government responsibilities.

The presumption is that governments can partner with private firms in a relationship in which

Government gains access to the technical expertise it requires and can assess the cost-effectiveness of private delivery, and firms are willing to share their expertise in exchange for long-term service contracts. Thus, the formation of a PPP ties the two parties together in a common goal, where both of their fortunes are linked to the success of the overall project, providing the incentives for both sides to cooperate, innovate, and work collaboratively toward the success of the enterprise.

Accountability in PPPs, therefore, is linked to the specific relationship created and the obligations and requirements accepted by both the government and the private firm. If the PPP is designed properly, the incentives that guide public bureaucracies and private organizations will provide mutuality to the partnership. If PPPs are poorly designed, there is no reason to expect that the presumption just detailed will materialize, and PPPs may leave the public no better—and perhaps worse off—than if the government had relied on its own resources to carry out the tasks

However, understanding what constitutes the best design to ensure public accountability is case specific. Public managers need to sort out, assess, and address various dimensions of public accountability when considering a PPP.