With Flurry of Last-Minute Changes, High-Stakes Solar Bill Passes Committee

Legislation is aimed at bolstering sagging industry, but opponents say costs will hurt consumers

In a move eagerly anticipated by the solar sector, a legislative panel yesterday voted out a bill proponents say will revitalize the flagging industry in New Jersey.

Whether it achieves that goal will not be known until Monday at the earliest, and probably until much later.

It was a day that illustrated how messy legislative lawmaking can become in Trenton — particularly when it is facing a deadline, this time summer recess. The Assembly Telecommunications and Utilities Committee voted out a bill (A-2966) that aims to prop up the sector, one of the few growing segments of the economy in New Jersey.

The stakes, however, are enormous for ratepayers, who could end up paying even more than nearly $6.8 billion in subsidies they would owe under existing regulations requiring solar energy development by 2028, according to Division of Rate Counsel Stefanie Brand. Pending legislation would ramp up those costs even more, she said.

The issue also could affect the hundreds of millions of dollars solar firms might invest in New Jersey. Many fear investment could dry up because of falling prices owners of solar systems earn for the electricity their arrays produce.

For the most part, the steep drop in prices is blamed an on oversupply of solar credits for those systems, a situation most attribute to overly lucrative state and federal incentives to spur solar development.

Unfortunately, what the bill actually does remains a mystery to many observers in the industry and others. The committee voted to release the bill after a hectic day of lobbying, mostly behind closed doors, a process that changed seemingly by the hour the winners and losers who would benefit from amendments floating up and down during the past 24 hours.

The committee’s action came after a day when its meeting started three hours later than scheduled; when it heard testimony from a range of speakers who had yet to see the latest version of the bill; and when it then voted out a bill with amendments more than 45 minutes after a scheduled recess. Committee members were handed the 32-page amendments only a few minutes before voting on the bill, hardly enough time to gauge the impact of the changes.

The bill details, however, will not be released until Monday, according to committee aides, lending a great deal of uncertainty to how effective the measure will be in halting a slide in prices owners of solar systems earn for the electricity they produce.

No matter. The panel voted out the bill, without discussion and with only one abstention, most committee members having long left the hearing, and having left a yes vote. The hearing was supposed to start at 10 a.m. and did not conclude until well past 4 p.m.

For the public, committee aides said the bill would not be available until Monday from the non-partisan Office of Legislative Services. NJ Spotlight obtained a copy of the amendments handed to legislators on the panel, but whether they reflected actual changes adopted by the panel remained uncertain.

For example, in voting out the bill, a committee aide described one amendment as setting a payment power suppliers must pay if they do not buy credits from electricity produced from solar systems at $339, even though the amendments handed out to committee members set the price at $375. The bill voted out by the Senate set the payment at $325, a cost that would lead to lower costs for customers who pay electric and gas bills.

The costs, dubbed the Solar Alternative Compliance Payments (SACPs) in the increasingly convoluted world of energy jargon, have become a big stumbling block in passage of the bill. Some view the payments as setting a ceiling as to how much energy suppliers must pay to comply with strict solar purchase requirements, but others, like Brand, question whether they constitute a windfall payment to solar developers on the backs of utility customers.

The discrepancy between the committee aide and what was in the bill handed out to lawmakers left many other crucial questions unanswered.

If other amendments were not changed, the bill would give a special incentive to projects developed for large manufacturers and pharmaceutical companies who install solar systems bigger than three megawatts of solar capacity if they were designed to provide power primarily to those facilities, not to the power grid. The amendment was viewed as a gift to KDC Solar, a company that builds solar at major pharmaceutical companies, a score of manufacturing facilities and other similar projects.

That provision drew criticism from several other people at the hearing, saying no special incentives should be granted to solar developers. They also complained it might lead to a further crash in the price of solar credits.

“No one’s interest is served if we allow an unlimited amount of solar to be built,” said Lye Rawlings, a vice president of the Mid-Atlantic Solar Energy Industries Association, a group which joined other solar developers in urging that a throttle be inserted in the bill to make sure solar developers do not recreate an oversupply in the number of solar certificates.

That provision is apparently not included in the bill, a failure some lobbyists warned would fail to correct the problem. “If there isn’t some limitation, we’ll be back here in another eight months,” said Fred DeSanti, of the New Jersey solar Energy Coalition.