N.J.S.A. 48:3-121.3 — Transmission-scale energy storage systems development, incentive awards.

48:3-121.3 Transmission-scale energy storage systems development, incentive awards. 2. a. (1) The Board of Public Utilities shall establish a program to procure and provide incentive awards for the development of transmission-scale energy storage systems with a reasonable likelihood of successful and timely completion. The board shall solicit applications for the program established pursuant to this section in an initial Tranche 1 and in Tranche 2, pursuant to paragraph (2) of this subsection. The board may place an eligible project that does not receive an incentive award for Tranche 1 or Tranche 2 on a waiting list and consider the eligible project for an incentive award during a subsequent tranche. (2) By no later than June 30, 2026, the board shall approve incentive awards for eligible projects totaling at least 1,000 MW AC in installed capacity. However, at least 350 MW AC of the 1,000 MW AC procurement goal shall be approved in incentive awards for eligible projects in Tranche 1 by no later than December 31, 2025. If the board is unable to procure all 1,000 MW AC in installed capacity in Tranche 1, the board shall approve incentive awards for eligible projects in Tranche 2, provided that all incentive awards in Tranche 2 are awarded by no later than June 30, 2026. b. To qualify for an incentive award in Tranche 1 or Tranche 2 pursuant to this section, a transmission-scale energy storage system shall: (1) not participate in any other energy storage program, except for the GSESP, to the extent that the energy storage program established pursuant to P.L.2025, c.136 (C.48:3-121.2 et al.) is incorporated into the GSESP; (2) have an anticipated commercial operations date of no later than December 31, 2030, unless the board permits an exception; (3) meet the following project maturity requirements, as applicable: (a) a transmission-scale energy storage system applying for an incentive award in Tranche 1 shall have entered the PJM interconnection process and, at the time of application, have a fully executed Generation Interconnection Agreement or Interconnection Service Agreement through PJM, have a completed Surplus Interconnection Study through PJM, or have notified PJM of intent to transfer existing Capacity Interconnection Rights associated with a deactivating generation station; (b) a transmission-scale energy storage system applying for an incentive award in Tranche 2 shall have entered the PJM interconnection process and, at the time of application, have a fully executed Generation Interconnection Agreement or Interconnection Service Agreement through PJM, have a completed Surplus Interconnection Study through PJM, have been studied by PJM in a Phase I System Impact Study and have paid a Decision Point I Readiness Deposit to PJM, or have notified PJM of intent to transfer existing Capacity Interconnection Rights associated with a deactivating generation station; and (c) if a transmission-scale energy storage system fulfils the project maturity requirements established pursuant to subparagraph (a) or subparagraph (b) of this paragraph by completing a Surplus Interconnection Study or by notifying PJM of intent to transfer existing Capacity Interconnection Rights associated with a deactivating generation station, then the transmission-scale energy storage system shall also have obtained the associated Capacity Interconnection Rights through PJM; and (4) meet any other eligibility criteria the board may establish through board order or rulemaking. c. Any application for an incentive award issued in Tranche 1 or Tranche 2 pursuant to this section shall include: (1) evidence reasonably satisfactory to the board of site control; (2) evidence reasonably satisfactory to the board that an applicant has or will obtain all required permits, which evidence shall include an execution plan to obtain all required permits; (3) evidence reasonably satisfactory to the board that the applicant has submitted all interconnection applications and initial application fees necessary to obtain permission from the appropriate electric public utility or grid operator to operate the transmission-scale energy storage system; (4) evidence reasonably satisfactory to the board of the applicant�s financial means to construct the transmission-scale energy storage system and ability to obtain revenues through electricity markets or non-ratepayer funding, including, but not limited to, energy arbitrage, ancillary services, and capacity revenues in PJM; (5) evidence reasonably satisfactory to the board of the status of the transmission-scale energy storage system in the PJM interconnection process; (6) assurances reasonably satisfactory to the board that the transmission-scale energy storage system will adhere to any safety requirements, standards, or measures that the board deems appropriate as well as to any nationally recognized minimum safety requirements, including, but not limited to, appropriate laboratory testing, and will comply with all manufacturers� installation requirements, applicable laws, regulations, codes, licensing, and permit requirements; (7) a statement describing the transmission-scale energy storage system�s alignment with State and regional transmission and resource adequacy planning goals and demonstrating the transmission-scale energy storage system�s coordination with PJM and the appropriate electric public utility; (8) an application fee as set by the board; and (9) any other information required by the board. d. The board shall review Tranche 1 and Tranche 2 applications consistently with the requirements of this section. At its discretion, the board may instruct an applicant on curing minor defects in a Tranche 1 or Tranche 2 application. The board shall evaluate each application based on the bid prices of the requested incentive awards. The board may appropriately compare bid prices, at the board�s discretion, based on the measure of a transmission-scale energy storage system�s installed capacity, energy storage capacity, or expected accredited capacity. The board may also consider other factors such as: (1) project maturity and likelihood of success; (2) whether the project has completed non-ministerial permits; (3) whether the project is proposed by an applicant with experience in energy storage development, construction, and finance; and (4) whether the project promotes redevelopment, community benefits, brownfield redevelopment, or existing or former fossil fuel plant replacement or provides demonstrated benefits to environmental justice in communities where a transmission-scale energy storage system is proposed to be located. e. Any board order issued pursuant to P.L.2025, c.136 (C.48:3-121.2 et al.) shall be binding and enforceable. Any such board order shall: (1) define the eligible project receiving an incentive award and the eligible project�s installed capacity; (2) define the incentive award, including a payment schedule for the 15-year award period of the incentive award, which term shall commence no earlier than the commercial operations date of an eligible project and during which term an eligible project shall receive an annual incentive award on each anniversary of the first payment date; (3) determine the amount of funding to be allocated for payment of the incentive award beginning in the fiscal year in which the eligible project commences commercial operations; (4) include a participation fee as the board may require from the developer; (5) require, for an eligible project awarded an incentive award, a pre-development security not to exceed $100,000 per megawatt and not to exceed in total $10,000,000; (6) outline the conditions under which the board may, in the event of a developer�s failure to operate an eligible project by the deadline stated in the board order or to meet deadlines included in the board order, revoke an incentive award or retain some or all of the pre-development security; (7) provide that receipt of an incentive award for an eligible project shall be contingent on achievement of baseline performance requirements, including, but not limited to, availability for dispatch in a minimum number of hours per year, as determined by the board. The board may use the PJM Equivalent Forced Outage Rate or another metric determined appropriate by the board to measure energy storage availability. The board order shall require that the developer report data for the purpose of this paragraph at regular intervals and shall provide for a reduction of an incentive award in proportion to the number of hours of required availability that is unmet by the eligible project; and (8) require a developer to provide additional information to the board during the term of the incentive award, as the board may reasonably require. The board may set additional requirements at its discretion, including, but not limited to, a requirement that the developer report major development and construction milestones to the board, maintain financial security throughout the term of the incentive award, or any other requirement the board determines necessary to ensure continued progress and operational viability of an eligible project. f. The board may amend an order issuing an incentive award pursuant to this section solely to change the funding source of the incentive award. Any incentive award for an eligible project and the conditions for receiving funding pursuant to this section shall remain effective for the full duration of the award period specified in the board order issuing the incentive award, notwithstanding any change to the funding source of the incentive award. g. (1) Notwithstanding the provisions of the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), or any other law or rule to the contrary, the board shall permit applications for Tranche 1 without regard to the publication status of the rules and regulations to be issued pursuant to P.L.2025, c.136 (C.48:3-121.2 et al.), by no later than September 30, 2025. (2) The board shall accept Tranche 1 applications for a maximum of 60 days after the beginning of the formal application period for Tranche 1. Within 60 days following the closure of the Tranche 1 application period, the board shall: (a) evaluate projects in accordance with this section, any rules or regulations proposed pursuant to P.L.2025, c.136 (C.48:3-121.2 et al.), and any application requirements and eligibility criteria approved pursuant to this subsection; and (b) select eligible projects to receive an award. h. An incentive award shall be conditioned upon a developer�s compliance with the board order determining the incentive award and with any conditions the board shall reasonably require. L.2025, c.136, s.2.

This is the verbatim text of N.J.S.A. 48:3-121.3, retrieved from the New Jersey Legislature's public statute corpus. Statutes are amended periodically — for the most current version, check the external source link above. Kyzer is not a law firm and this page is not legal advice.