February 25, 2024
NJ Opens 2nd State Agreement Approach to Connect OSW with PJM
NJ BPU President Christine Guhl-Sadovy
NJ BPU President Christine Guhl-Sadovy | NJ BPU
The New Jersey Board of Public Utilities has initiated a second state agreement approach with PJM to plan the transmission necessary to meet Gov. Phil Murphy's goal of installing 11 GW of offshore wind by 2040.

The New Jersey Board of Public Utilities (BPU) has initiated a second state agreement approach (SAA) process with PJM to build the transmission needed to connect 3,500 MW of offshore wind with the RTO’s grid.

In a Feb. 5 announcement of the SAA, BPU President Christine Guhl-Sadovy said the first agreement in 2022 — also the first for PJM — made the state a national leader in developing offshore wind, putting it on track to construct 4,890 MW.

In addition to resources being developed through PJM’s traditional generation interconnection queue, the second SAA will allow the state to meet Gov. Phil Murphy’s goal of installing 11 GW of offshore wind by 2040. PJM and the BPU jointly filed the SAA with FERC on Feb. 2 (ER24-1187).

“We believe that a coordinated and planned approach could result in more efficient and cost-effective transmission solutions, significantly reducing the risks of permitting and construction delays and protecting ratepayers with cost containment options,” Guhl-Sadovy said in a statement. “This approach helps minimize environmental impacts associated with onshore and potentially offshore upgrades. We look forward to further evaluation and planning, as a result of SAA 2.0.”

PJM CEO Manu Asthana said New Jersey’s use of the SAA process shows the promise it holds for states with policy goals that required developing new generation.

“The continued collaboration between PJM and New Jersey through the State Agreement Approach underscores PJM’s commitment to reliably and cost-effectively facilitating states’ renewable energy policy goals,” Asthana said in the announcement. “PJM’s competitive planning process allows for creative solutions to complex infrastructure challenges. New Jersey has been a leader in this approach and can be a template for other states pursuing their individual energy policies.”

New Jersey has pushed ahead with solicitations for offshore wind infrastructure since approving the $1.1 billion in transmission projects PJM recommended through the first SAA round, but hit a snag when developer Ørsted canceled its two Ocean Wind projects in November. (See New Jersey Launches OSW Infrastructure Solicitation.)

Speaking at a Feb. 6 PJM Transmission Expansion Advisory Committee meeting, PJM’s Susan McGill said the RTO plans to run the SAA planning process parallel to the 2024 Regional Transmission Expansion Plan (RTEP), with the goal of opening competitive solicitation windows for both in July. Doing so would allow PJM to select project components that meet both future reliability needs and New Jersey’s interconnection request in the most cost-effective manner and on a timeline that allows the BPU to consider project approval in the second quarter of next year.

McGill encouraged developers to draft proposals that address needs identified in both windows and submit them to each window, which would allow PJM to ensure it is selecting the best match of components.

“We will look at it from every angle to make sure we are only building what’s needed,” she said.

McGill said PJM will also give further thought to a stakeholder question about whether this approach could result in transmission owners who submit projects having to pay twice the fees to have a proposal considered for both windows.

Several stakeholders raised concerns that having two competitive windows open at once could strain the resources of PJM and transmission owners. They suggested that better ideas might be submitted if the RTO conducted the processes on a staggered timeline.

PJM’s Sami Abdulsalam said the RTO considered delaying one of the windows but said there are time constraints on when each needs to be finished. Completing one without knowing what proposals will be made for the other could result in overlap and projects having to be canceled, he said.

New JerseyOffshore WindPJM Transmission Expansion Advisory Committee (TEAC)Public PolicyTransmission Planning

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