At the May 21, 2025 New Jersey BPU meeting the Board announced the following:
Class I RPS Target Deferred
The Board confirmed that the Class I Renewable Portfolio Standard (RPS) will remain at 35%, deferring the previously planned increase to 38% in Energy Year (EY) 2026.
New Jersey Class 1 prices have dropped $5 in response.
Class 1 prices probably move off $10 due to this
Class 1 compliance at $35 = $655 million
Class 1 compliance at $25 - $468 million
The BPU just gave the energy suppliers a $187 million windfall since the rates are already locked in under BGS
The decrease should have been put in for energy years 2029 and later to save the ratepayer.
Also, by decreasing the RPS it decreases the chances of energy companies paying the ACP. ACP gets refunded to the ratepayer so this virtually eliminates ACP payments going back to the ratepayer.
The majority of Class 1 payments go to owners of wind farms outside of New Jersey.
Solar owners in New Jersey earn and sell class 1 recs on Flett Exchange after they have outlived their 15 or 10 year life to earn SRECs.
Energy Prices have risen significantly in New Jersey and have become a political liability going into this year's governors election. The Murphy administration had increased the requirements for green energy in New Jersey significantly in the last eight years. New Jersey does not have any significant on-shore wind resources so these requirements force energy suppliers in New Jersey to procure the environmental attributes from wind facilities in other states or pay a fine. These costs have increased utility bills in New Jersey and if not changed may increase costs from the current few hundred million a year to over a billion a year.
The RECs have a price cap of $50 each and in recent years have moved from under $10 to over $30.
A few weeks ago when two bills were introduced in the New Jersey Legislature to decrease payments to New Jersey homeowners and businesses who already invested in solar the class 1 prices started dropping. It has been suspected that the Class 1 requirements to send money to out-of-state wind farms would be decreased before cutting payments to New Jersey residents. It appears that these moves are being taken now.
The BPU has the authority to decrease payments to out-of-state windfarms but a change in legislation is required for them to decrease payments to solar owners.