A5382

An Act concerning the establishment of a demonstration program for the development of certain microgrids and supplementing Title 48 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

“Authority” shall have the same meaning as provided in section 3 of P.L.1974, c.80 (C.34:1B-3).

“Board” means the Board of Public Utilities or any successor agency.

“Demonstration program” means the demonstration program authorized in response to a request for proposal developed and issued by the authority pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

“Department” means the Department of Environmental Protection.

“Distributed energy resource” means an electricity-producing resource or controllable load that is connected to an electric public utility’s distribution infrastructure or a microgrid connected to a utility’s distribution infrastructure.

“Distributed energy resource microgrid” or “microgrid” means a microgrid consisting of a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that act as a single controllable entity with respect to a utility’s distribution infrastructure, which can connect and disconnect from a utility’s distribution infrastructure to enable it to operate both connected to, or independent of, a utility’s distribution infrastructure.

“Electric public utility” or “utility” means a public utility, as that term is defined in R.S.48:2-13, that provides electric distribution service in this State.

“Request for proposal” or “proposal” means the request for proposal developed and issued by the authority pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).

2. a. The New Jersey Economic Development Authority, in consultation with the Board of Public Utilities and the Department of Environmental Protection, shall develop a request for proposal for the purpose of determining eligibility for the establishment of a demonstration program involving the development of distributed energy resource microgrids at six regionally diverse locations within the State for fleet and medium and heavy-duty electric vehicle use. The proposal shall require that there be at least one distributed energy resource microgrid located within the service territory of each electric public utility operating within this State. The proposal shall describe, in detail, the provision of the establishment of microgrids for fleet and medium and heavy-duty electric vehicle charging capable of supporting very high, coincident peak vehicle electric load. Within the proposal, the authority shall provide a list and brief description of any State or local incentives and support programs available to an approved applicant.

b. The authority shall establish guidelines for its approval, designation, operation, reporting, and re-designation of a demonstration program in a manner determined by the authority. Upon developing a request for proposal, the authority shall issue the proposal in a form and in a manner determined by the authority. The authority may approve more than one demonstration program application, provided that the total number of approved applications shall result in meeting the requirement, pursuant to subsection a. of this section, that a microgrid shall be established at six locations within the State.

c. The authority, in cooperation with the board and the department, shall oversee, coordinate, and provide assistance to the demonstration program approved and established pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).

3. A request for proposal shall require an applicant intending to establish a demonstration program to submit to the authority the following information, which shall include, but not be limited to:

a. a statement of purpose for the proposed demonstration program, which shall include, but not be limited to, the development of microgrids to create infrastructure for the high coincident load charging of fleet and medium and heavy-duty electric vehicles without requiring a major electric public utility infrastructure upgrade or any interconnection delays;

b. a validation of the key cost and time saving and resilience metrics provided by the applicant as compared with the traditional electric public utility capital investment approach for the establishment of microgrids for use by fleet and medium and heavy-duty electric vehicles;

c. a description of one or more microgrids for each location and a clear explanation and map conveying a proposed microgrid’s physical boundaries;

d. a provision requiring the applicant to state that each microgrid to be established shall:

(1) allow for clean or renewable energy-sourced electric power generation and energy storage provided on-site or on property contiguous to the microgrid, in addition to the ability to charge electric vehicles; and

(2) comply with any fleet and medium and heavy-duty electric vehicle charging infrastructure plan established by the department where microgrid infrastructure is needed to get the most benefit for fleet and medium and heavy-duty electric vehicle charging; and

e. a statement that the applicant will enter into an agreement with an electric public utility where, upon receiving board approval, the utility will make any necessary upgrades to its transmission or distribution infrastructure and provide energy storage at locations proposed by the applicant to make the location ready for operation of a microgrid. A utility making any board-authorized capital investments to upgrade its transmission or distribution infrastructure shall allow the utility to include in its rate base these operating costs for rate recovery. A utility providing energy storage at a location for the operation of a microgrid shall be eligible to receive cost recovery directly from customers through any revenue-producing microgrid services provided by the utility, but the board shall not allow the utility to include in its rate base the any costs for providing energy storage.

4. A request for proposal issued by the authority to establish a demonstration program shall give preference to applications:

a. located within a brownfield, as defined pursuant to section 3 of P.L.1999, c.23 (C.48:3-51);

b. providing an environmental justice net public benefit, as determined by the authority, within a “low-income, urban, or environmental justice community,” as defined pursuant to section 2 of P.L.2019, c.362 (C.48:25-2);

c. providing job creation and job training potential for disadvantaged persons, as determined by the authority; and

d. resulting in an expansion of the State’s manufacturing base for an emerging clean transportation economy, and demonstrating a collaboration with a State-certified educational training entity.

5. Upon the approval by the authority of an application to conduct a demonstration program, the authority shall require the approved applicant to enter into an agreement with the authority that shall contain, but not be limited to:

a. a signed statement of cooperation and a description of the roles and relationships of each entity involved in the demonstration program;

b. a clearly identified list of goals, performance standards, benchmarks, or milestones of the proposed demonstration program, with approximate dates as to when the goals, performance standards, benchmarks, or milestones will be achieved and how they will be evaluated, including a requirement that an approved applicant shall report to the authority on the status of the applicant’s achieving these goals, performance standards, benchmarks, or milestones;

c. a complete budget of the proposed demonstration program, including a description of secured funds with proof, pending funds, and potential future funding sources;

d. a list of the approved applicant’s assets and resources, organizational experience, including capabilities, related experience, facilities, techniques, resources, or unique combinations of these that are integral factors for achieving the proposed objective of establishing a microgrid; and

e. the expectations for job development and business creation upon the establishment and operation of a microgrid.

6. The authority shall bi-annually report to the department and the board on the progress made by an approved applicant in establishing a demonstration program. The authority shall annually post the information from these reports on the authority’s Internet website. The board shall incorporate any applicable information on the establishment of the demonstration program in Energy Master Plan or update to that plan. The authority shall report, five years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, on the results of the establishment of a demonstration program and post a copy of that report on the authority’s Internet website.

7. The authority is authorized to seek and accept gifts, donations, grants, or loans from private or public sources, including, but not limited to, any federal funding to be provided for the purposes of the demonstration program, except that the authority shall not accept a gift, donation, grant, or loan that is subject to conditions that are inconsistent with any other law of this State.

8. This act shall take effect immediately.

STATEMENT

This bill requires the New Jersey Economic Development Authority (authority), in consultation with the Board of Public Utilities (board) and the Department of Environmental Protection (department), to develop a request for proposal (proposal) for the purpose of determining eligibility for the establishment of a demonstration program (program) involving the development of distributed energy resource microgrids (microgrid), as defined in the bill, at six regionally diverse locations within the State for fleet and medium and heavy-duty electric vehicle use. The proposal shall require that there be at least one microgrid located within the service territory of each electric public utility operating within this State. The proposal is to describe, in detail, the provision of the establishment of microgrids for fleet and medium and heavy-duty electric vehicle charging capable of supporting very high, coincident peak vehicle electric load.

The authority is to establish guidelines for its approval, designation, operation, reporting, and re-designation of the program in a manner determined by the authority. The authority may approve more than one program application, provided that the total number of approved applications is to result in a microgrid being established at six locations within the State. The authority, in cooperation with the board and the department, is to oversee, coordinate, and provide assistance to the program.

The bill requires the proposal to require an applicant intending to establish a program to submit to the authority certain information as described in the bill. The proposal issued by the authority is to give preference to applications: 1) located within a brownfield; 2) providing an environmental justice net public benefit within a low-income, urban, or environmental justice community; 3) providing job creation and job training potential for disadvantaged persons; and 4) resulting in an expansion of the State’s manufacturing base for an emerging clean transportation economy, and demonstrating a collaboration with a State-certified educational training entity.

Upon the approval by the authority of an application to conduct a program, the authority is to require the approved applicant to enter into an agreement with the authority that is to contain certain information as described in the bill.

The authority is to bi-annually report to the department and the board on the progress made by an approved applicant in establishing a program. The authority shall annually post the information from these reports on the authority’s Internet website. The board shall incorporate any applicable information on the establishment of a demonstration program in the State’s Energy Master Plan or update to that plan. The authority is to report, five years after the effective date of the bill, to the Governor and the Legislature, on the results of the establishment of the program and post a copy of that report on the authority’s Internet website.

The bill authorizes the authority to seek and accept gifts, donations, grants, or loans from private or public sources, including, but not limited to, any federal funding to be provided for the purposes of the demonstration program, except that the authority is not to accept a gift, donation, grant, or loan that is subject to conditions that are inconsistent with any other law of this State.