New Jersey Electricity Market Profile

Presented by Lyle Birkey

and Andrew Fishbein

More than 830 companies are members of PJM

60 million customers

1,325 generation sources

In 1927, three utilities in N.J. and PA discovered the benefits of interconnecting their grids and formed the worlds oldest still-existing power pool

In 1997, PJM opened its first bid-based energy market

In 2001, PJM approved PJM as the nation’s first fully functioning ISO

The Pennsylvania-New Jersey-

Maryland (PJM) Interconnection

1) Atlantic City Electric

2) Public Service Electric & Gas

3) Jersey Central Power & Light

4) Orange Rockland Electric

New Jersey Power Utilities/Companies

New Jersey Power Utilities/Companies 1) Atlantic City Electric is a regulated electric utility

serving nearly 547,000 customers in southern New Jersey. Privately owned by Pepco Holdings Inc. (PHI) since

Other Utilities owned by Pepco Holdings Inc:

Atlantic City Electric

Pepco is a regulated electric utility delivering electricity to more than 778,000 customers in Washington, D.C., and its Maryland suburbs.

Delmarva Power is a regulated electric and gas utility serving more than 498,000 customers in Delaware and the rest of the Delmarva Peninsula

PHI Serving 14 states:

Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

Service Map for Atlantic City Electric

2) Public Service Electric and Gas Company, is a regulated, publicly owned gas and electric utility company in New Jersey.

• New Jersey's oldest and largest investor owned utility.

• 19 operable power plants

• Total of 13,206 MW of generation

New Jersey Power Utilities/Companies

3) Jersey Central Power & Light is a wholly owned subsidiary of FirstEnergy Inc., which is headquartered in Akron, Ohio.

New Jersey Power Utilities/Companies

FirstEnergy consists of 10 electric utility operating companies

Investor-owned electrical system

6 million customers served within a 65,000 square-mile area

Includes Ohio, Pennsylvania, West Virginia, New Jersey, Maryland and New York.

Map of FirstEnergy Inc. Service Area

4) Orange Rockland Electric is a regulated utility serving customers in southeastern New York and adjacent sections of northern New Jersey and northeastern Pennsylvania.

New Jersey Power Utilities/Companies

21 power plants across NY, NJ, and PA

Wholly owned subsidiary of Consolidated Edison

72,478 customers served in NJ

In 1999, O&R sold all of its generating stations as part of the New York State Public Service Commission's plan to deregulate the electric utility industry and create a competitive marketplace.

Now O&R purchases power from the PJM Interconnection for the small area of NJ that it holds

Map of FirstEnergy Inc. Service Area

New Jersey Board of Public Utilities (BPU) • Originally founded 1907 as Board of Railroad

Commissioners; extended jurisdiction and obligations to the core of its current work in 1911

• Consumer protection

• Energy reform

• Deregulation of energy and telecom

• Restructuring of utility rates to encourage energy conservation and competitive pricing

• Energy Master Plan (2011)

• Recent Actions

• $446 million investment by PSE&G for 150MW solar • Landfills/brownfields

• Stability for SREC market

• $6-7/year rate hike by 2018

• NJNG SAVEGREEN Energy Efficiency Program extended through June 2015

• $85 million investment -- $115 million savings

Regional Transmission Connections, Constraints

In-state v. imported power Demand 40% higher than indigenous capacity

25% imported

In-state generation capacity

17,000 MW capacity

20,500 MW peak load

Generation and fuel mix

55,000 GW in 2010

50% nuclear

38% natural gas

8% coal

1% renewables (wind, solar, hydro)

Renewable generation

Renewable portfolio standard Applies to utilities and retail suppliers

Standard: 22.5% by 2021

Includes solar carve-out which rises to 4.1% by 2028, qualifying in-state hydro < 3MW

Additional tech minimum: 1,100 MW offshore wind. Standard based on projected production

ORECs at fixed price each contract year

All compliance must be submitted using RECs

Renewable energy credits

Issued by PJM-Environmental Information Services

RECs (Class I), SRECs (solar), ORECs (offshore wind)

Can be used during year of generation and 2 years after (4 years for SRECs)

Must be generated in PJM region

Revenue must fund RE projects through NJ Clean Energy Program

Non-compliance: remit alternative compliance payment, ACP (SACP for solar).

Price determined by BPU: ACP = $50/MWh, SACP at $711/MWh in 2011, declines to $239/MWh by 2028 Payments refunded to ratepayers

REC Markets

Glut of SRECs due to hyperactive solar market prices falling in recent years.

High price of $617/MWh reached in May ‘11, Aug ‘10