Home Fourth Solicitation (2024) Prebuild Solicitation Third Solicitation (2022-23) Second Solicitation (2020-21) First Solicitation (2018-19)
Questions submitted regarding the solicitation will be collected, answered, and posted here by Board Staff on a rolling basis. Website subscribers will be notified by email when new questions and answers are posted. Questions and answers posted are available for all to see. Please note that these answers are the opinion of Board Staff and should not be construed as opinions or rulings of the Board.
Questions will be accepted until 5PM EDT on May 31, 2024.
Submit questions by email to njoffshorewind@levitan.com.
The responses provided herein are merely Board Staff's attempt to be responsive to the questions and should not be interpreted as legal advice. Applications must abide by (i) the Board's April 30, 2024 Order, In the Matter of the Opening of New Jersey's Fourth Solicitation for Offshore Wind Renewable Energy Certificates (OREC), Docket No. QO24020109; and (ii) the April 30, 2024 Fourth New Jersey Offshore Wind Solicitation Solicitation Guidance Document Application Submission for Proposed Offshore Wind Facilities ("Solicitation Guidance Document").
1. The SGD defines "Re-Bid Project" as a Project, or portion of a Project, that was previously selected as a Qualified Project in the First Solicitation or Second Solicitation and/or includes utilization of any rights, interests and/or obligations granted by the Board to the Qualified Project selected in the First Solicitation or Second Solicitation.
a. Please provide a definition for "rights, interests, and/or obligations" so it is clear what specifically this refers to.
RESPONSE: These terms refer to the (1) material provisions in the Board Order awarding the Qualified Project that reflect the Board’s awarding of rights, interests and/or obligations in relation to the subject Qualified Project. By way of illustration and not limitation, the OREC payments as well as terms and conditions associated with the OREC payments; and (2) any land use rights or state environmental permits that may have been granted by – or allowed by – Board action. If a Project, or portion of a Project, is utilizing land use rights or environmental permits previously granted or allowed by Board action, then it is a Re-Bid Project.
b. Please confirm that if a Project submitted in response to NJ4 proposes Tier 1 investments or community investments that were included to some extent as part of the awards made in NJ1 or NJ2 and memorialized in the Board Order associated with that award, but is located in a Lease Area not associated with an award in NJ1 and NJ2, it is not considered a Re-Bid Project.
RESPONSE: Confirmed, so long as the Project does not otherwise meet the definition of a Re-Bid Project based on other criteria.
2. The Draft SGD indicated that no Re-Bid Projects utilizing all or part of Lease Area OCS-A 0498 and OCS-A 0532 are eligible for termination by consent of an NJ1 or NJ2 Qualified Project unless and until all outstanding disputes regarding the associated NJ1 or NJ2 Qualified Projects are resolved to the Board's satisfaction; however, that text was removed from the Final SGD. Please confirm that this is accurate: a project utilizing all or part of Lease Area OCS-A 0498 and OCS-A 0532 is considered a Re-Bid Project, but may bid into this fourth offshore wind solicitation even if it has outstanding disputes not yet resolved to the Board's satisfaction.
RESPONSE: Confirmed.
3. The SGD states that "At the time of Application submission, each Applicant shall identify the form(s) of commitment security it intends to use to satisfy its obligations. If an Applicant chooses to use one or more parent company guarantees, or any other method that has a parent provide security, the Applicant shall disclose the parent or parents that will agree to execute said guarantees." Please confirm that an Applicant's identification of the form(s) of commitment security it intends to use to satisfy its obligations is provided for informational purposes only and non-binding, and an Applicant can confirm its approach in the Compliance Filing due after award.
RESPONSE: This is confirmed with an important restriction. A parent company guarantee – or any other method that would have a parent provide security – may be utilized only if the parent or parent(s) were identified in the Applicant’s Application submission as the parent or parent(s) that would provide security in such a scenario. If the Applicant proposes a different approach in its Compliance Filing than what was proposed in the Application, Applicant must provide a explanation and rationale for any change in how it is providing its commitment security. Ultimately, acceptance of the Compliance Filing, including a proposed approach to satisfying the commitment security requirement that differs from that proposed in the Applicants’ Application, is subject to Board approval. Applicant must also discuss such different financing structure and approach with Board Staff prior to the Compliance Filing, providing a reasonable period for notice and discussion with Staff to occur regarding this revised financing structure.
4. The SGD states that: "The Board recognizes that the design to accommodate the future connection to an OTN is inherently uncertain due to evolving technical specifications, supply chain and vessel limitations, among other technical challenges. Applicants must submit Projects without the design components to allow for future connection to an OTN." In order to offer maximum flexibility to Applicants to overcome supply chain and vessel limitations, please confirm that if an Applicant offers a Project option that includes OTN, the OTN equipment may be included on a separate platform from the offshore HVDC converter station.
RESPONSE: Yes, an Applicant may propose an OTN-Ready solution that utilizes a separate platform with or without additional equipment beyond what is included in Attachment 10. An Applicant should describe the benefits this approach would provide to OTN readiness, if pursuing this approach. Because offshore network HVAC standards are still evolving, Staff does not expect that additional specifications will be available prior to or at the time of award.
5. Under the PJM Interconnection Process, only one New Service Request may be submitted per generating facility. If Applicants intend to submit multiple Project options that utilize different POIs, New Service Requests will not be possible for each POI. If the Applicant has an active Queue Position for one POI, will that satisfy the requirement for the Project to demonstrate that it is "queue eligible" for any alternate POIs as well?
RESPONSE: An active position at one POI will satisfy the requirement, provided the Applicant can alter the POI at a later date, if needed. However, Applicants are not required to have an active New Service request in order to satisfy the requirement. The Applicant may show it is eligible to submit a New Service request at its potential POI(s) and what its plan for submission is.
6. Please confirm that an Applicant can propose HVDC project options, none of which are required to include the design components to allow for future connection to an OTN.
RESPONSE: Confirmed.
7. We understand that an Applicant may propose HVDC projects options which may or may not include design components to allow for future connection to an OTN.
a. For an HVDC project, does inclusion of OTN-Ready and exclusion of OTN-Ready count as two separate Project options that require two separate Application Forms?
RESPONSE: Yes.
b. Where in the Application Form should inclusion of OTN-Ready be specified?
RESPONSE: The Application Form (Project Summary worksheet) has been revised to include a field to indicate whether the Project is OTN-Ready.
c. Can Project options that differ only due to the inclusion of OTN-Ready be accepted without incurring additional proposal fees?
RESPONSE: Yes. A Project that differs from another Project only based on the inclusion of OTN-Ready will not incur an incremental Application Deposit of $25,000.
8. We understand that Projects using the Prebuild must submit two OREC Purchase Prices: (i) one price that includes the cofferdam (as needed) and shoreline HDD as part of the Project, in the event that the Onshore Only Scope is selected for the Prebuild, and (ii) one price if the cofferdam (as needed) and shoreline HDD are not included in the Project, in the event that the Full Scope, is selected for the Prebuild.
a. For a project utilizing the Prebuild, does inclusion of the HDD/cofferdam and exclusion of the HDD/cofferdam count as two separate Project options that require two separate Application Forms?
RESPONSE: Yes. Because multiple inputs in the Application Form could vary between the options with and without the HDD/cofferdam, a separate Application Form is required for each. The Application Form (Project Summary worksheet) has been revised to include a field indicating whether the Project would use the Prebuild and whether the presented option is with or without the cofferdam/HDD.
b. Where in the Application Form should inclusion of the HDD/cofferdam be specified?
RESPONSE: The Application Form has been revised to include fields indicating whether the Project would use the Prebuild and whether the presented option is with or without the cofferdam/HDD.
c. Can Project options that differ only due to the inclusion of the HDD/cofferdam be accepted without incurring additional proposal fees?
RESPONSE: Yes. A Project that differs from another Project only based on the inclusion of the cofferdam/HDD will not incur an incremental Application Deposit of $25,000.
9. Would the landfall variant (i.e. with HDD/cofferdam scope) count as an additional variant?
RESPONSE: A separate Application Form is required, but not an incremental Application Deposit of $25,000.
10. Related to SGD Section 1.3, please confirm the term “increased project cost basis,” used in the paragraph immediately preceding Table 3, only refers to increases in project capex. The term does not refer to increases on the portion of project capex eligible for the tax credit. Any increase in the value of tax credits resulting from a change in the project capex eligible for the tax credit shall be returned to ratepayers.
RESPONSE: Confirmed.
11. Please confirm that the addition of the underlined word is accurate: Tax credits that are greater than what were projected and included in the OREC Purchase Price that are the result of increased tax incentive rates are to be returned to ratepayers. Any amount returned to ratepayers is on a net basis.
RESPONSE: Confirmed.
12. (Section 1.3. page 7 of the Final SGD): “In the event that an Application includes multiple discrete Projects that are not mutually exclusive and awardable individually in addition to being awardable together, the Applicant may propose pricing for each Project that is contingent on the selection of one or more additional Projects, in addition to the required pricing for each Project as a standalone award. In the event that multiple Projects are awarded with contingent pricing, each Project shall be subject to all Performance Guarantees, defined under Section 2.6, individually and separately. For clarity, any Re-Bid Project that is part of a contingent award will be subject to the Re-Bid Performance Guarantee identified in Section 2.6.”
a. Please confirm whether an Application may include multiple discrete Projects, one or more of which are contingent on the selection of one or more Projects, with no standalone price for the contingent project(s)? I.e. can an Application include Project A and B, with Project A bid with a standalone price and Project B bid only as a contingent price to Project A being selected?
RESPONSE: Yes.
b. Considering that Project A and Project B would be awarded to separate project entities and secure individual OREC Orders, can the BPU clarify what is meant by "each Project shall be subject to all Performance Guarantees, defined under Section 2.6, individually and separately"? For example, a purpose of separate OREC Orders for each Project is to facilitate separate financing of each Project. Accordingly, please confirm that each entity that obtains an OREC Order would only be responsible for Performance Guarantees applicable to its specific Project. In other words, if Project B (subject to a discrete OREC Order) failed one of its milestones or postings, would Project A (subject to a separate OREC Order) be held harmless?
RESPONSE: Yes. Project A and Project B would have independent Performance Guarantees, as applied to each project respectively.
13. (Section 1, Page 1) ‘Individual Projects included in an Application may be owned by different affiliated special purpose entities, and the Applicant must specify the ownership structure for each Project and provide a justification for the separation. In the event that multiple such Projects are selected by the BPU, each Qualified Project will be subject to a separate Board Order, subject to the Board’s determination that the provided justification is reasonable. This Solicitation Guidance Document (“SGD”) includes information on the timeline and mechanics of the Fourth Solicitation (Section 2), the Application requirements (Section 3)’
a. Please confirm that each special purpose entity identified in an Application to own a Project may be identified as a separate “Applicant,” such that an Application may include multiple special purpose entity Applicants, and that each such Applicant shall be required to execute an Applicant Commitment Form specific to its proposed Project(s).
RESPONSE: Confirmed.
b. Please also confirm that the applicable special purpose entity shall be the party to the Board Order for the applicable Qualified Project.
RESPONSE: Confirmed.
14. (Section 1.5, pages 9-10): ‘A Contingent Project is subject to the following conditions: (i) It must be explicitly identified in the Application, along with the name of the other state’s concurrent offshore wind solicitation upon which the Contingent Project is contingent;’ Please confirm how an Applicant should address a circumstance where, at the time of submission of an Application into the Fourth Solicitation, its Project is not contingent upon the outcome of another state’s offshore wind solicitation, but during the pendency of the BPU’s Round 4 review, the Project is applied into a solicitation of another state that has a submission deadline later than the Fourth Solicitation application deadline. May an Applicant notify the BPU through its Application into the Fourth Solicitation that its Project, which is not a Contingent Project at submission, may become a Contingent Project at a later date?
RESPONSE: An Application shall indicate whether a Project may become a Contingent Project as a result of a submission into another state’s offshore wind solicitation that has a proposal submission deadline later than the Application Submission Deadline for this Fourth Solicitation. The Applicant shall promptly notify Board Staff once a Project becomes a Contingent Project. The requirements in Section 1.5 of the SGD must then be followed by the Applicant.
15. (Section 2.6, page 18): “Project Critical Milestone 2: Achievement of the Phase 1 COD of the Qualified Project.” “Project Critical Milestone 3: Achievement of the Qualified Project’s COD.” These Critical Milestones, along with others and other salient provisions of the Final Guidance Document (including those related to the Inflation Adjustment Date), require a conclusion that COD for the Qualified Project or applicable Phase has been achieved. Please confirm that COD may be declared by the Qualified Project once at least 90% of the wind turbines for the Qualified Project, or applicable Phase, are commissioned and generating power.
RESPONSE: Please refer to Attachment 13, where Commercial Operation Date is defined to mean “commercial operations with at least 90% of the Project’s capacity approved under the [awarding Board] Order.”
16. (Section 3.3, page 29) In footnote 76 regarding the consideration of extreme weather events, can a more precise definition of extreme conditions be provided?
RESPONSE: The provision in the SGD is intended to ensure that a developer accounts for expected and foreseeable downtime due to weather conditions. Any weather event that contributes to a generator’s downtime should be taken into account and included in calculations when determining the Project’s expected annual delivered energy.
17. (Section 3.4, page 30): “Attachments to Section 4 of the Application Narrative must include . . . [t]he feasibility study used to determine the construction costs included in the cost accounting . . .” Please confirm that applicants are not required to retain an external consultant to complete the feasibility study.
RESPONSE: Confirmed.
18. (Section 3.7, page 34) states “The annual amount of revenues from whatever source expected to be generated by the Project shall be reflected in the revenue plan (N.J.A.C. 14:8-6.5(a)(12)(ix)). Demonstrating how Qualified Projects maximize revenue through participation in evolving markets administered by PJM over the OREC term may require submittal of additional future compliance filings for Board approval. The Board will inform Qualified Projects of compliance plan filing requirements at a future date.” Please confirm whether “additional future compliance filings for Board approval” will all be provided pursuant to the OREC Transaction Management Agreement between EDCs and Developers and administered by OREC Administrator for revenues? If not, what are examples of additional compliance filings that may be required associated with revenues?
RESPONSE: These compliance filings are not intended to be administered through an OREC Transaction Management Agreement. The Board may request these compliance filings for reasons such as following material changes to the operation of wholesale markets throughout the Qualified Project’s development and operation period. The Board will endeavor to explain a clear process for these compliance filings through a future Board rulemaking or other action.
19. (Section 3.13, page 48) states: "Transmission equipment that is required to interconnect a Project proposed in this Fourth Solicitation, including the power lines and switchyard to enable a Project using the fourth Prebuild circuit to access the SAA Capability at Smithburg from the LCS, is the responsibility of the Applicant and must be reflected in the Application and submitted.”
a. Please provide the ”nominal/admin” costs of the property at the LCS for the offshore wind developer.
RESPONSE: The costs associated with a leasing agreement are to be nominal but formally negotiated between the LCS owner and the Lessee.
b. Please confirm how and when the offshore wind developer will have their OREC true-ed up, when the final PBI lengths (and number of splices) are determined and installed by the PBI developer. Is there a specific assumption the NJBPU wants offshore wind developers to make?
RESPONSE: Consistent with past precedent – see the Board awards in Solicitation 2 -- the Qualified Project notifies the Board when all upgrades are completed and the final TSUC is known. With that notification, Board Staff will evaluate the amount of TSUC and determine the adder, if any, to allow appropriate recovery of TSUC. For clarity, there will not be a true-up for Projects utilizing the fourth Prebuild circuit based on the final Prebuild parameters. The final PBI length and splice count will be determined when the PBI award is made later this year; Board Staff has no specific details to provide at this time, additional details of selected PBI design may be provided before BAFO of S4. [Response revised on June 15, 2024]
c. Please confirm that the PBI developer will acquire all necessary permits for all export cable electrical installation temporary work spaces.
RESPONSE: Confirmed.
d. Please confirm whether this scope of work includes or excludes the underground 230kV HVAC portion of work connecting the 4th HVDC converter parcel and the LCS. This was previously in the MAOD scope of work for NJR3. Also, please confirm that PBI awardee/developer will be responsible to bring the PBI ducts from the nearby ROW into the 4th HVDC converter parcel at the LCS, as per previous NJR3 and PBI solicitation guidelines.
RESPONSE: The OSW developer using the fourth Prebuild circuit will be responsible for the 230 kV HVAC portion of work connecting the 4th HVDC converter parcel and the LCS. The costs for this work will be solely the developer’s responsibility and will not be part of the TSUC or subject to TSUC sharing. MAOD is responsible for bringing the PBI ducts from the nearby ROW into the 4th HVDC converter parcel at the LCS. MAOD, as part of its SAA 1.0 scope, will be responsible for constructing the Duct Banks between the Point of Demarcation and the 4th HVDC converter station parcel. The POI for the Qualified Project utilizing the fourth Prebuild circuit is at the LCS, with connections to the POI facilitated on the AC side of the converter station. The PJM interconnection process will identify any violations associated with interconnecting at the LCS, to which there are currently no SAA transmission facilities included for the fourth PBI circuit, as this scope was not included in SAA 1.0, and also identify the transmission system upgrades required to resolve the violations. This scope of work for the transmission facilities will be assigned to MAOD and JCPL and will be included in the Transmission System Upgrade Costs (“TSUC”) for the Qualified Project utilizing the fourth Prebuild circuit, and thus eligible for TSUC sharing. [Response revised on June 15, 2024]
20. (Section 3.13, pages 48-49): "Projects using the Prebuild must submit two OREC Purchase Prices, including all required supporting data for each price option: (i) one price that includes the cofferdam (as needed) and shoreline HDD as part of the Project, in the event that the Onshore Only Scope is selected for the Prebuild, and (ii) one price if the cofferdam (as needed) and shoreline HDD are not included in the Project, in the event that the Full Scope, is selected for the Prebuild. If the Onshore Only Scope is selected for the Prebuild, the Applicant will be expected to coordinate the construction of the HDD for the Project with the developers of the other Qualified Projects that will utilize the Prebuild.” If the Landfall HDD’s are determined to be included in the offshore wind developers scope, this will trigger new permitting requirements for the offshore wind developers, and will require each offshore wind developer to separately contract, design, and execute the landfall HDD operations for the one or two HDD bores required per HVDC circuit. With the limited seasonal window available for these HDD execution activities, completing all bores required for the four HVDC circuits could require 3-4 years, and could not begin until each offshore wind developer has individually completed their permitting requirements for this activity. It should not be overlooked that the schedule implications for export cable installation for any given offshore wind developer, in this situation, could be significant and are not easily captured in an OREC price adjustment. With this context:
a. Can the NJ BPU confirm that the landfall HDD scope remains part of the remaining Prebuild scope and should not feature as part of the Applicant’s bid submission? This would be a very impactful open switch with many sub-risks on timeline and supply chain in the delivery of a future project into the LCS.
RESPONSE: The landfall HDD will only be part of the Prebuild scope if the Full Scope is selected for the Prebuild.
b. What is the latest date this change will be made, as there are permitting impacts to the offshore wind developers schedule which could also impact the offshore wind project’s FID timing?
RESPONSE: Board Staff currently anticipates that this decision will be made when the PBI project is awarded.
c. Will adjustments to schedule commitment dates also be considered, along with OREC true-up, to account for the potential impact of landfall HDD execution shifting to offshore wind developer scope?
RESPONSE: The Applicant shall provide and explain the risks to the schedule commitment dates if the landfall HDD execution is shifted to the offshore wind developer scope. Even with such explanation, there is no guarantee that schedule commitment dates will be adjusted.
d. Is the cost of the permitting and property agreements at the DMAVA NGTC also included in the OREC true-up?
RESPONSE: Presuming this refers to TSUC sharing, no, it is not.
e. Please provide the installation dates/windows of the landfall HDDs if they are to be conducted by the PBI developer.
RESPONSE: The landfall HDD work is expected to be conducted during the 2026-28 seasons.
21. (Section 3.13, page 49) The NJ BPU states that Applicants “must submit two OREC Purchase Prices, including all required supporting data for each price option: (i) one price that includes the cofferdam (as needed) and shoreline HDD as part of the Project, in event that the Onshore Only Scope is selected for the Prebuild, and (ii) one price if the cofferdam (as needed) and shoreline HDD are not included in the Project, in the event that the Full Scope, is selected for the Prebuild.” If the “Onshore Only Scope” is selected for the Prebuild, will the OSW Applicant really be responsible for the decommissioning of the HDD & cofferdam scope?
RESPONSE: The Applicant shall do its best to satisfy the obligations under Section 3.16 of the SGD. See the response to Question 25.
22. (Section 3.18, page 57 of final SGD) It states, “Bill-of-Goods for each Project phase … reflecting only guaranteed direct in-state spending and jobs resulting from the Applicant’s Project that are consistent with the guarantees provided on the Economic Benefits worksheet for the Project”. It further states, “...monetary direct expenditure values expressed in undiscounted millions of real 2024 dollars”. The Economic Impacts worksheet of the Application Form specifies that the “Guaranteed Minimum Total Direct In-State Jobs Creation and Expenditures by Activity Phase” is required to be listed in nominal $. Can the BPU clarify the following:
a. Is the “Economic Benefits worksheet” the same as the “Economic Impacts worksheet?"
RESPONSE: Yes.
b. Is there any consistency check (such as inflation assumptions) that the NJ BPU would like the Applicant to perform given the Bill-of-Goods for each phase is specified in Real 2024 $ and hence the total will be numerically different from the Nominal $ total guarantees provided on the Economic Impacts worksheet?
RESPONSE: Each Applicant should make sure the inflation assumptions that they use are reasonable and consistent across their entire Application. The Applicant should perform whatever checks they feel are necessary to make sure each value is correctly specified in the requested monetary terms. It is the Applicant's responsibility to ensure that all values provided in the Application Form are correct. Applicants may include their inflation assumptions in the Application Narrative or as an attachment to Section 8, but this is not a requirement.
c. What is the intent of asking for a breakdown of In-State Expenditures into Labor Expenditures, Capital Investments, Supply chain purchases and Transfers to Govt/Non-profits in the “Economic Impacts” sheet when Guaranteed In-State Expenditures in Nominal $ and the breakdown in “Bills-of-Goods” for each project phase in Real 2024 $ are being provided?
RESPONSE: The intent of asking for a breakdown of In-State Expenditures into Labor Expenditures, Capital Investments, Supply Chain Purchases and Transfers to Govt/Non-profits in the "Economic Impacts" sheet is so that the Board and other State agencies with responsibility under OWEDA can better understand the Applicant's planned spending in each category.
23. (Section 4.1, page 60) “The levelized cost calculation is presented in Attachment 14.” In Attachment 14, the Levelized Net OREC Cost LNOCp calculation has Present Value of Annual OREC quantity PVAQp in the denominator. Would it be better to not discount the physical quantity of electricity production i.e. OREC quantity? Applying an economic discount to the physical quantity might be exaggerating the LNOCp, as well as the ratepayer impact value.
RESPONSE: The approach shown in Attachment 14 is consistent with prior offshore wind solicitation evaluations and will be applied consistently across Applicants and Projects.
24. In order to be a contingent project will you have had to submit in an OFW solicitation prior to NJ4 solicitation deadline?
RESPONSE: An Application shall indicate whether a Project may become a Contingent Project as a result of a submission into another state’s offshore wind solicitation that has a proposal submission deadline later than the Application Submission Deadline for this Fourth Solicitation. The Applicant shall promptly notify Board Staff once a Project becomes a Contingent Project. The requirements in Section 1.5 of the SGD must then be followed by the Applicant.
25. Do Applicants need to consider decommissioning for the HDD/cofferdam scope?
RESPONSE: Yes, if the Applicant is responsible for constructing the HDD/cofferdam, the Applicant must consider decommissioning for the HDD/cofferdam scope.
26. Related to Performance Guarantees, SGD footnote 61 says: "“Tier 1 infrastructure investment commitment” is defined as "a commitment by the Qualified Project to provide funding, in the form of cash or loan, for the development of a Tier 1 manufacturing facility". Please confirm that this is correct: If an Applicant's commitment to a Tier 1 manufacturing facility is an anchor order or reservation commitment, and not funding in the form of cash or loan, there is no Tier 1 Investment Commitment required.
RESPONSE: Confirmed. Where an Applicant's commitment to a Tier 1 manufacturing facility is an anchor order or reservation commitment, an Applicant may choose to propose a Performance Guarantee related to the anchor order or reservation commitment.
27. (Page iii): “Compliance Filing, a filing with the Board made within a timeframe to be specified in the Board Order regarding an award that binds the awardee, and their successors or assignees, to meeting the commitments, as applicable, made by the Qualified Project and approved by the Board.”
(Section 2.6, page 17): “Within the timeframe specified in the Board Order regarding a Fourth Solicitation award, which will not be less than 180 days after the Board Order, each awarded Qualified Project, already bound, along with other entities referenced therein, to the obligations set forth in the Board Order making the award, shall make a Compliance Filing with the Board that more precisely defines how the awardee, any affiliated entities, including, but not limited to parents, as well as successors and assignees intend to meet the following commitments and critical milestones, as applicable, made by the Qualified Project and approved or modified, as applicable, by the Board in the Board Decision . . .”
The above referenced provisions create ambiguity as to when an awardee or its parent companies (to the extent an applicant chooses to use one or more parent company guarantees) are bound to posting Commitment Securities. The definition of Compliance Filing states that it is the Compliance Filing that binds an awardee to meeting such commitments. The above referenced language on page 17 suggests that the “Qualified Project” and “other entities” referenced in the Board Order are bound upon the issuance of the Board Order.
a. Please confirm whether an awardee shall be bound to post the Commitment Securities upon the issuance of the Board Order or upon the submission of the Compliance Filing.
RESPONSE: An awardee shall be bound upon the issuance of the Board Order to post the Commitment Securities through the Compliance Filing process.
b. Likewise, please confirm that the BPU is not intending for the Board Order to be binding upon parent companies of a selected applicant and that, if an Applicant chooses to use one or more parent company guarantees, it is upon the posting of such parent guaranty (and not upon the issuance of the Board Order) that the BPU would have potential recourse against the parent companies.
RESPONSE: If an Applicant chooses to use one or more parent company guarantees, the posting of such parent guaranty would give the BPU recourse against the parent companies. Additionally, there are circumstances in which the parent company may be identified as being subject to the Board Order, for instance, where the parent company is the Applicant, developer or co-developer of the Qualified Project.
28. The SGD says that "The Qualified Project may implement a one-time extension of each Critical Milestone of up to three (3) months upon written notice to Board Staff. A request for extension of a Critical Milestone date beyond the three (3)-month one-time extension period requires a good cause justification and is subject to Board approval." Please confirm that the three month extension is applicable to Tier 1 Critical Milestones only and not Project Critical Milestones, as Projects may reserve the right for the COD to be delayed for up to, but no longer than, 6 months without having to obtain Board approval, in line with the Board Orders awarding Qualified Projects in the Third Solicitation.
RESPONSE: Confirmed. In conformity with the precedent found in the Solicitation 3 awards, the three-month extension is for the Tier 1 Critical Milestones. The permissible six-month delay to the COD will apply to the COD/Project Critical Milestones.
29. Please confirm that SGD Attachment 14: Levelized Net OREC Cost Calculation is provided for informational purposes only, for visibility into how BPU will evaluate proposals.
RESPONSE: Confirmed.
30. SGD Section 3.8 says: "Applicants are also encouraged to provide funding for or propose energy equity programs in New Jersey, oriented around reducing the ratepayer impact on energy burdened households. The allocation to specific programs of any proposed funding for energy equity programs will be determined by the Board." Please confirm that this is correct: Applicants should suggest an allocation to proposed partners, which is subject to Board approval in the Board Order awarding the Qualified Project.
RESPONSE: Applicants may suggest an allocation to proposed partners and state programs, which is subject to Board approval in the Board Order awarding the Qualified Project. Alternatively, Applicants may provide funding for or propose energy equity programs in New Jersey and rely on the Board to allocate funds in the Board Order awarding the Qualified Project.
31. SGD Section 3.18 says: "FTE-year values for in-State job creation are required to be provided as estimates based on the best engineering values in possession of the Applicant (economic model outputs are not the appropriate source for these values)".
a. Please advise what "best engineering values" specifically refers to.
RESPONSE: “Best engineering values” refers to the most accurate estimates of actual in-State job creation in the Applicant’s possession, based on either data that the Applicant has received from vendors or the Applicant’s own internal estimates.
b. To develop FTE-year values, Project developers and their consultants typically take a hybrid approach of: using values from suppliers to the extent that they are contracted and figures are available, and using a top-down model to acquire such information given that individual job estimates are spread among suppliers and contractors, and not all suppliers are contracted at time of bid submission nor have specific figures available. Can the BPU please advise the desired level of granularity, detail, or background information sought with the Applicant-provided FTE-year values?
RESPONSE: As indicated at page 57 of the SGD, the Applicant should provide all values separately reported by category (direct capital investments, direct supply chain purchases, and direct transfers to governments or non-profits for supply chain or workforce development), and by phase (development, manufacturing (if applicable), construction, operation, and decommissioning). Background information supporting FTE-year values can be provided as attachments, but this is not required.
32. SGD Section 3.3: Energy Production Estimate requests " a wind resource and energy assessment from a wind energy consultant for the exact manufacturer, model and specifications of turbines selected for the Project"; however, Section 3.2: Project Description allows "A letter of intent or memorandum of understanding from the turbine manufacturer/supplier to supply the selected turbines.... if the supplier and/or backup supplier has been selected, or from potential suppliers if a supplier has not been selected". Please confirm that if a Project has not selected a specific WTG supplier, the Energy Production Estimate can be based on a generic turbine, with an assumption on what the power curve is expected to be.
RESPONSE: Confirmed.
33. By when does a Re-Bid Project need to terminate its existing Board Order with the BPU in relation to being awarded as a Qualified Project in the Fourth Solicitation? Does such termination occur in a BPU Board meeting? Would it happen simultaneously with the Fourth Solicitation award?
RESPONSE: In submitting an Application that includes a Re-Bid Project, the Applicant consents to having its prior selection as a Qualified Project terminated if the Re-Bid Project is selected during Solicitation 4. The logistics and timing of termination have not been finalized. A Fourth Solicitation Board Order awarding ORECs to a Re-Bid Project may either simultaneously terminate the Project’s pre-existing award order or it may detail the termination procedures to follow. In either event, termination will occur through a Board order issued at a BPU Board meeting.
34. Will BPU allow ITC assumptions (e.g., base ITC only, Energy Community adder, Domestic Content adder, etc.) to be changed from what was assumed in the Application submitted to what will be assumed in the BAFO submission? In other words, can Applicants change their ITC assumptions as part of the BAFO process?
RESPONSE: Yes. The Board recognizes that the United States Treasury Department’s (“Treasury Department’s”) proposed regulation does not extend ITC eligibility to owners of offshore wind energy delivery unless the taxpayer also has an ownership interest in the turbines. In submitting the BAFO, Applicants will therefore be able to change their ITC assumptions as part of their BAFO submission. Recognizing that the Treasury Department’s proposed regulation is under review, Applicants will be expected to pursue realization of all federal tax credits if the final rule does indeed extend the base ITC only, Energy Community adder, and the Domestic Content adder in full or in part to energy delivery systems.
35. The SGD says “If the in-State spending guarantees for the development and construction phases are not met, following an opportunity to cure the shortfall, at least 90% of any remaining shortfall must be applied to a reduction in the OREC price over the full OREC term.” Please confirm that Q&A #104 from the Third Solicitation Q&A is still an applicable demonstration of how this reduction in OREC price would work.
RESPONSE: Confirmed.
36. Please confirm that the guarantees for jobs is limited to direct jobs, and Applicants are not required to provide guarantees for indirect and induced jobs.
RESPONSE: Confirmed.
37. Regarding the Application Form, is there a list of components/subcomponents that NJ would like Applicants to choose from for inclusion on the Bill of Goods tab? Please clarify how things like community investments should be presented.
RESPONSE: No. The Applicant should choose its own components and subcomponents to organize data on the Bills of Goods tab. In-state spending on community investments and direct transfers to governments or non-profits should be included in the Bill of Goods, under the appropriate Applicant-defined component or subcomponent, e.g., under a component labeled ”community investments and direct transfers to governments or non-profits.”
38. The term "New Jersey business" is used in several places in the SGD. Please advise what the requirements to be considered a New Jersey business are.
RESPONSE: To be considered a New Jersey Business, the business must:
This definition is strictly for the purpose of defining a NJ business for this solicitation only. This definition is a minimum threshold and is intended to support the inclusion and growth of New Jersey small businesses.
39. In Section 3.7 of the SGD, can NJBPU please clarify the rationale/intent as to why the specific language was changed from “shall be returned to ratepayers…” to “shall be credited fully to ratepayers…” and any further clarification for prospective Applicants regarding the implications of this change?
RESPONSE: The language was changed to more accurately reflect the expected implementation of the payment transaction, which will be a single net payment to the Qualified Project, rather than a payment of the OREC Purchase Price and a separate repayment of the offsetting revenue.
40. Section 2.4 of the SGD states Applicants may submit a project that utilizes the PBI’s fourth circuit, the LCS, and the remaining SAA Capability. To develop a proposal that utilizes PBI while delivering the greatest value for ratepayers, Applicants require additional information about the PBI solution. At this time, is the NJBPU able to provide the following information? We acknowledge that some of this information may not be available at this time and ask the BPU to provide periodic updates throughout the Application window to allow developers to better refine their proposals.
RESPONSE: While the Prebuild Solicitation is ongoing, there are limitations on what information can be shared. To the extent that additional information can be shared prior to or after the Application Submission Deadline, the BPU will do so.
a. An update on the status of PBI converter station parcels. Have location(s) been set? Will any sites be located in a designated Energy Community?
RESPONSE: The location of the converter station parcels has been set, but their allocation among the four users has not been finalized. With the understanding that the parcel sizes are subject to change, the fourth converter parcel will be approximately 10 Acres, 970’ x 500’. Board Staff will endeavor to share final parcel information with individual Applicants at a later date.
b. A list of PBI bidders
RESPONSE: The Board is not able to share this information publicly at this time.
c. Draft or proposed terms and conditions between the PBI developer and offshore wind developers
RESPONSE: The Board is not able to share this information publicly at this time.
41. (Section 1.3, page 9, footnote 47): “Pursuant to FN 47 of the SGD and N.J.A.C. 14:8-6.5(a)(12)(ix), an applicant may propose that it retain up to 25% of incremental energy revenues if the project’s energy sales exceed those associated with the sale of ORECs.” Please clarify what are considered to be “incremental energy revenues.” For example, if all energy generation in a given year results in the generation of ORECs, which are either sold in the current year or banked for future use, are any energy revenues associated with such generation considered to be “incremental energy revenues”? For instance, assuming an Annual OREC Allowance of 100, and the project generates 120 ORECs in year 1 (100 of which are sold in year 1 and 20 of which are banked for use in either year 2 or year 3), may the project retain 25% of the revenues associated with the 20 banked ORECs, as “incremental energy revenues”?
RESPONSE: No. Applicant’s retention of incremental energy revenues must reflect the sale of incremental energy, not energy sold that is associated with ORECs. Any energy sold that has an OREC associated with it will not be considered an incremental energy revenue, whether that OREC is sold in the year generated or banked for later sale. Only energy sales without an associated OREC are eligible for incremental energy revenue treatment. N.J.A.C. 14:8-6.5(a)(12)(ix) (explaining that excess energy sales targeted for 25% retention cannot be “associated with the sale of ORECs”).
42. During the Technical Bidder Conference held on May 15, BPU communicated that preliminary index values of the Inflation Adjustment Mechanism will be published in mid-June for use in the Application submission and mid-October for use in the BAFO submission. Could BPU clarify if these values will be either (i) historical values as of mid-June 2024 and mid-October 2024 or (ii) forecast values which developers could use to convert ORECbase to ORECinf Purchase Price?
RESPONSE: The values published in mid-June and mid-October will be historical values representing IndexI,i for each commodity. The Board does not intend to publish its expectation of the change in each index, and the associated IndexM,i values, included in the adjustment mechanism between the BAFO Submission Deadline and the date three years before the COD for each Project prior to the BAFO Submission Deadline.
43. (Section 2.4, page 15): “Board Staff will also provide Applicants with an opportunity to submit a BAFO, with submissions expected to be due in mid-November 2024.” “The scope of the BAFO opportunity will include only pricing parameters and economic benefits guarantees, as entered on the “OREC Pricing Schedule” and “Economic Impacts” worksheets of the Application Form. No change in Project design will be permitted in the BAFO.” Please confirm that, as part of its BAFO, an Applicant may revise the assumed ITC Rate for which the project shall qualify and associated OREC pricing. It is foreseeable that Applicants will continue evaluating their projects’ likely ITC Rate eligibility following the submission of Applications (including, potentially, based upon additional guidance that may be released by the US Department of Treasury after the filing of Applications but before BAFO). To the extent an Applicant determines that its project is likely to qualify for an ITC Rate at a different (either higher or lower) level than that estimated in its Application, an Applicant should be permitted to set forth such revised ITC Rate, and the associated adjusted OREC price, through its BAFO.
RESPONSE: See the response to Question 34.
44. (Section 2.6, pages 17-18): “Within the timeframe specified in the Board Order regarding a Fourth Solicitation award, which will not be less than 180 days after the Board Order, each awarded Qualified Project, already bound, along with other entities referenced therein, to the obligations set forth in the Board Order making the award, shall make a Compliance Filing with the Board that more precisely defines how the awardee, any affiliated entities, including, but not limited to parents, as well as successors and assignees intend to meet the following commitments and critical milestones, as applicable, made by the Qualified Project and approved or modified, as applicable, by the Board in the Board Decision:
. . . .
The Compliance Filing shall include:
. . .
3. A detailed description and copy of the proposed financial instrument(s) to be used to secure the Qualified Project’s commitments.”
a. If a detailed description and copy of the proposed financial instrument is provided, is any additional information required to be included in the Compliance Filing to “precisely define” how the awardee intends to meet the commitment?
RESPONSE: In addition to the requirements in (1) and (2) that are listed before (3), the Compliance Filing should include a cover letter with a detailed explanation of how the proposed financial instrument will secure the awardee’s commitments and critical milestones.
b. If the commitment is a letter of credit, must the financial institution providing the letter of credit be identified in the Application? If yes, if a different financial institution is identified to provide the letter of credit pursuant to the Compliance Filing, will the Board approve the change, and if so, through which process?
RESPONSE: The financial institution used for the letter of credit does not need to be identified at the time of Application submission.
c. Are there any restrictions on the number of commitment securities that may be provided by any single financial institution?
RESPONSE: There are no restrictions so long as the Applicant can show that the financial institution has the necessary bank and credit rating to satisfy its commitments.
45. (Section 2.6, page 18): “Re-Bid Critical Milestone 1: Execution of a binding agreement with an OEM supplying the Project’s wind turbine generators.” Please confirm that BPU considers a ‘Preferred Supplier Agreement’ as a “binding agreement.”
RESPONSE: A Preferred Supplier Agreement will be viewed favorably by the Board but does not constitute a binding agreement unless there are clear provisions in the agreement binding the parties to the use of a specific wind turbine generator with commercial terms attached thereto.
46. Regarding the response to Question 15, please confirm details around the awarding Board Order, and whether commissioning of 90% of the wind turbines (as opposed to 90% of approved project capacity) is sufficient?
RESPONSE: No, commissioning of 90% of wind turbines is not sufficient. The Qualified Offshore Wind Project may petition the Board at the appropriate time for different treatment.
47. (Section 2.6, pages 19): “A Qualified Project shall post 50% of this Tier 1 Commitment Security within the earlier of (i) the one (1) year anniversary date of the Order’s effective date, and (ii) sixty (60) days before the Tier 1 Critical Milestone 1 date, as contained in the Compliance Filing. The balance shall be posted within the earlier of (i) sixty (60) days prior to the Tier 1 Critical Milestone 2 date, and (ii) sixty (60) days after the Tier 1 Critical Milestone 1 date, as contained in the Compliance Filing.”
a. Please confirm that the obligation to “post” a commitment security is satisfied as of the dated date of the financial instrument and not upon the later delivery of such commitment security to the Board.
RESPONSE: In order for a Commitment Security to be posted, the Board must be able to review the financial instruments and verify that the posted amounts are consistent with the commitment security requirements. The financial or legal instrument providing the security shall be delivered to the Board for verification. Accordingly, while the timeliness of the posting will be determined based upon the date of the financial instrument, the obligation to satisfy the posting requirement will not be satisfied until the Board reviews and verifies the relevant financial or legal instrument(s).
b. As the Tier 1 Commitment Security is to be posted in two (2) separate installments, is each such installment to be provided by separate security instruments (i.e. two (2) parent guarantees or two (2) letters of credit for each 50%) or is the Board contemplating a mechanism whereby both installments will be referenced in a single instrument?
RESPONSE: A Qualified Project may choose to employ a single or multiple instruments to satisfy the separate installments.
48. (Section 2.6, pages 19): “A Qualified Project shall post 50% of this COD Commitment Security within one year of the Board Decision, with the balance posted within three years of the anniversary date of the Board Decision.” As the COD Commitment Security is to be posted in two (2) separate installments, is each such installment to be provided by separate security instruments (i.e. two (2) parent guarantees or two (2) letters of credit for each 50%) or is the Board contemplating a mechanism whereby both installments will be referenced in a single instrument?
RESPONSE: See the response to Question 47b.
49. (Section 2.6, page 20): “The commitment securities may be in the form of: (i) one or more parent company guarantees as detailed in Attachment 13, if the parent is investment grade (defined as having one or more credit rating of BBB or above from Standard and Poor’s, BBB or above from Fitch, or Baa3 or above from Moody’s); (ii) one or more irrevocable letters of credit in the form detailed in Attachment 13 from an investment-grade third-party financial guarantor (defined as an institution with a rating of BBB or above from Standard and Poor’s, BBB or above from Fitch, or Baa3 or above from Moody’s); and/or (iii) upon Petition to the Board, other financial instrument acceptable to the Board that provides a comparable level of security to ratepayers, including, but not limited to, corporate guarantees and performance bonds.” For (iii) above can the BPU provide additional examples of what other financial instruments might be deemed acceptable? For instance, would a surety bond be an acceptable financial instrument to provide for the COD Commitment Security and Tier 1 Security, if issued by an investment grade entity (defined as having one or more credit rating of BBB or above from Standard and Poor’s, BBB or above from Fitch, or Baa3 or above from Moody’s)?
RESPONSE: Yes. A surety bond would be an acceptable financial instrument. Any financial instrument proposed under (iii) must be approved by the Board following petition.
50. (Section 2.6, page 20): “In the case of a Qualified Project with multiple parent companies, including those that involve a joint venture, the Qualified Project may request that responsibility for the commitment securities be split among the parent companies, specifying the respective percentage split responsibility for each parent company.
At the time of Application submission, each Applicant shall identify the form(s) of commitment security it intends to use to satisfy its obligations. If an Applicant chooses to use one or more parent company guarantees, or any other method that has a parent provide security, the Applicant shall disclose the parent or parents that will agree to execute said guarantees.”
a. If there are multiple parent guarantees, is the percentage responsibility for the commitment security allocated to each parent required to be identified in the Application? If so, can such percentage allocation change following issuance of the Board Order? What would be the process for changing such percentage allocation (simple notice to Board staff, petition, proposed adjustment via Compliance Filing, etc.).
RESPONSE: The Application need not specify the allocation of the commitment security between the identified parents providing security. All the identified parents must be investment grade.
b. If a project is owned by a Joint Venture, can each parent provide a different kind of security? For example, one to provide a letter of credit or surety bond and one to provide a Parent Company Guarantee, as long as the sum of securities covers 100% of the commitment and both are issued by an investment grade entity, as defined above?
RESPONSE: Yes.
c. Please confirm the process by which a replacement commitment security (including a parent guarantee, if applicable) could be provided in the event that the Qualified Project is transferred to a new entity?
RESPONSE: Any replacement commitment security shall satisfy the requirements identified in Section 2.6 of the SGD and shall require a petition and Board approval, unless otherwise allowed by the Board. For example, the initial financial instrument may have controlling language concerning the transfer of the commitment security to a new entity. In such case, the Board would have endorsed the approach and no further approval would be necessary.
51. (Section 2.6, pages 20): “The total and original amount of the commitment securities obligation for each of the three (3) applicable Critical Milestone categories above may be reduced, if approved by the Board as described above, by 20 percentage points for achieving Critical Milestone 1, and by 20 percentage points for achieving Critical Milestone 2 if there are three Critical Milestones for the category.”
a. If the commitment securities include a letter of credit, does the letter of credit need to be reissued upon reduction or can the original letter of credit include provisions regarding reduction? Or shall an Applicant propose its preferred structure through its Application?
RESPONSE: Both approaches are likely acceptable; the Applicant may propose its preferred structure.
b. If, upon delivery of a commitment security, the BPU determines it is deficient in some manner, is there a "cure" period to either amend the commitment security or provide a new one?
RESPONSE: Board Staff would recommend that the Board grant a reasonable opportunity to cure in the event of a deficiency. The Board may accept or reject that recommendation.
52. (Section 3.2, page 26): Regarding the requirement to provide audited financial statements for two years in US GAAP, for the applicant, parent companies, and key suppliers, please confirm it is sufficient to provide such financial statements in IFRS, together with an associated auditor’s report, if that is how the applicable entities’ financial statements are prepared in its jurisdiction.
RESPONSE: Confirmed.
53. (Section 3.2, page 26). Please confirm that, where an Applicant has progressed its contracting with suppliers beyond the Letter of Intent or Memorandum of Understanding stage, in lieu of providing a Letter of Intent or Memorandum of Understanding, it may provide relevant excerpts of a signed contract (preferred supplier agreement, for instance) from suppliers to satisfy this requirement.
RESPONSE: Confirmed. As this constitutes a key contract, Applicants will be required, nevertheless, to provide the fully-executed agreement to Board Staff once a Board Order awarding the Qualified Project is issued.
54. (Section 3.8, Page 38) “Applicants should also propose systems for reporting, tracking, and verifying instate jobs and spending to ensure that guaranteed in-State expenditures and jobs commitments will materialize.” Applicants can each provide a methodology for reporting, tracking, verifying state jobs and spend. However, if various selected developers specify very different methodologies for tracking, reporting and verification of in-state expenditures and jobs, what does BPU intend to do to achieve consistency, not just among the developers, but also with other states and with federal requirements for Prevailing Wage and Apprenticeship under the Inflation Reduction Act?
RESPONSE: Per the SGD, each Applicant is required to submit a “Method for calculating and tracking in-State spending with respect to guaranteed values” and a “Method for calculating and tracking in-State jobs with respect to guaranteed values.” Post Award, the Qualified Offshore Wind Project is required to hire an independent third party to develop an appropriate methodology. Board Staff will review these submissions and reserves the right to ask clarifying questions. General principles may be stated in the Board Order awarding a Qualified Project, with final details to be negotiated with each Qualified Project after award, if needed. While the specific methodology for each Qualified Project may not be the same across all Qualified Projects, Board Staff will exercise reasonable efforts to promote consistency.
55. Can the BPU confirm that the NJRd3 awardees are committing to both (i) procuring WTG towers from a tower manufacturing facility to be developed at the NJWP and (ii) funding that Tier 1 funding for the facility?
RESPONSE: Both Third Solicitation awardees committed to procuring wind turbine generator (“WTG”) towers from a tower manufacturing facility to be developed at the NJWP, but neither Third Solicitation awardee committed to providing the Tier 1 funding for the tower facility.
a. If so, could the BPU give visibility on any progress regarding localization of tower suppliers to NJ?
RESPONSE: The NJEDA recently issued a Request for Information (“RFI”) for NJWP Manufacturing Technical Inquiry (see https://www.njeda.gov/wp-content/uploads/2024/05/NJWP-Manufacturing-RFI-final.pdf), to ascertain additional details from the public, including potential tower manufacturers and other stakeholders, regarding manufacturing at the Port. As the RFI response deadline was May 28, 2024, NJEDA is currently reviewing the RFI responses which will inform next steps regarding a future NJEDA solicitation for offers to lease parcels at the NJWP for manufacturing facilities.
b. If not, could the BPU provide details on how other projects may utilize the same facility if initial funding is not planned?
RESPONSE: Fourth Solicitation Applicants, as well as Applicants in future offshore wind solicitations, have the option to commit funding and/or component orders to support a tower, or, if preferred by the Applicant, another Tier 1 component, manufacturing facility at the NJWP. Additional orders and/or funding for a tower facility would be negotiated by each Applicant with the selected tower manufacturer.
56. (Section 3.13, Page 49) Can the BPU please clarify the types of costs that may be included in the TSUC, particularly as it relates to the TSUC sharing mechanism? For example, could both the PJM system upgrades and connection network upgrades (typically completed by generators) be included within the TSUC sharing mechanism?
RESPONSE: Costs that may be included in TSUC include all costs for transmission system upgrades that fall under the definition of “Network Upgrades” under the PJM Tariff. These include costs for Transmission Owner Interconnection Facilities, Physical Interconnection Network Upgrades, and System Reliability Network Upgrades. For more information see the Transition Cycle #1 study reports at https://www.pjm.com/planning/m/cycle-service-request-status.
57. The BPU’s response to Question 19b references TSUC in the context of a true-up to account for the final PBI parameters, but we believe these two concepts to be wholly separate. The BPU’s response in Q&A 19b also indicates that additional details relating to the PBI length true-up costs may be provided before BAFO. In reference to the BPU’s response in Question 19b, can the BPU please confirm that:
a. An OREC true-up will occur (separate from the TSUC mechanism) to incorporate the final PBI length, the number of joints and whether HDDs are/are not included once known after the PBI awards?
RESPONSE: The response to Question 19b has been revised. For clarity, costs associated with installing the cable through the Prebuild are not part of TSUC. There will be no true-up for the installation of cables through the PBI infrastructure. Applicants should provide the assumptions that detail their costs for cable length and cable installation through the PBI. There will be no true-up for the cost associated with the landfall HDDs if they are not constructed. Please see the respective responses to Questions 8, 9, and 58.
b. How that true-up will be calculated and the resulting process?
RESPONSE: Please see the response to Question 57a.
c. Can the BPU clarify that if the details regarding the PBI award are not provided before the S4 BAFO that they will be provided with enough time for bidders to incorporate the information, updates and true-up into their bids during the evaluation process? Is there a possibility that this true-up may occur post S4 award? In which case, can the BPU provide the details how such a true-up (again emphasizing that we understand this to be wholly separate from the TSUC true-up) would be handled regarding the awarded project’s OREC order?
RESPONSE: The Board anticipates but cannot guarantee that this information will be available prior to BAFO. Regardless of when and whether information regarding the PBI award is made available to S4 Applicants, costs associated with utilization of the Prebuild will not be subject to TSUC sharing or true-up.
58. In reference to the response to Question 20d, if the BPU decides to include the landfall HDDs in the OSW developer’s scope for the Project using the fourth Prebuild circuit, we understand there will be an OREC true-up mechanism for this, but can the BPU clarify that it will include all costs of the landfall, for example, the NGTC property agreements and permits required to perform such work?
RESPONSE: There will be no true-up for the inclusion of landfall HDDs. Applicants proposing to utilize the Prebuild are required to submit pricing with and without the landfall HDDs. See the respective responses to Questions 8 and 9.
59. (Attachment 1, page 10) In the tab ‘First Energy Year All-In OREC Purchase Price’ of the Application Form, should the ORECinf or ORECbase Purchase Price be submitted?
RESPONSE: ORECbase should be submitted. Applicants are not required to provide an estimate of ORECinf, although they may elect to do so in the Application Narrative. The actual ORECinf will be calculated three years prior to the proposed COD of a Qualified Project.
60. Is the BPU considering requiring both the ORECinf and ORECbase Purchase Prices in the Application Form, and considering both prices in its evaluation to assess Applicants’ views of the Inflation Adjustment Mechanism and specifically their assumptions with regards to COD, further supporting evaluation of projects’ Likelihood of Successful Commercial Operation with regards to the deliverability of their schedule?
RESPONSE: Applicants may provide an estimate of the IndexM,i values and ORECinf in the Application Narrative, but are not required to do so. For purposes of evaluation, Board Staff will calculate ORECinf based on the Board’s expectation of the change in each index included in the adjustment mechanism between the BAFO Submission Deadline and the date three years before the COD for each Project.
61. (Attachment 1, page 1) The Application Form includes a note (when hovering the cursor over Cell D25 on the “Project Summary” tab) stating: “Note that evaluation will begin with the first full month of operation.” Please confirm if this structure is applicable solely for evaluation purposes or if it also applies to the commencement of the OREC term. For instance, if COD for a project (or applicable phase) occurs on January 15th, would the OREC term commence with the first full month of operation (i.e., February 1st) or would the OREC term commence on January 15th?
RESPONSE: This structure also applies to the commencement of the OREC term. Beginning with the first full month following COD, OREC values will be calculated as follows: each megawatt-hour (MWh), or fraction thereof, delivered to the POI in that month will be multiplied by the OREC Price for the project month shown in the OREC Pricing Schedule.
62. The SGD is clear that for a project with multiple phases, any operating phase will get the same OREC rate for any given Energy Year. The following questions relate to an example of a submission with two phases to COD, “COD A” and “COD B”, in which the OREC rate has an annual escalation of x%:
a. If COD A is delayed into a later Energy Year than that projected in the Application, would its starting OREC rate include or exclude the escalation? E.g., if the approved year 1 OREC rate is $y/MWh with a x% escalator, if COD A is delayed into a later Energy Year (compared to its original bid) would the starting OREC rate be $y/MWh or 1.x% * $y/MWh?
RESPONSE: If the Project is delayed for any reason, the first year OREC price shall be the first year OREC price as bid, excluding escalation. If COD A is delayed into a later Energy Year, the starting OREC would still be $y/MWh.
b. Related, if COD A is meant to be in Energy Year 1 and COD B is meant to be in Energy Year 2, are developers meant to (a) bid a single OREC price (per the Application Form) and then (b) COD A receives the Year 1 OREC rate and COD B receives the Year 2 OREC rate of 1.x% * $y/MWh? Or are developers meant to bid two separate OREC rates, but then the rates are the same for any given Energy Year?
RESPONSE: Applicants will submit a single OREC Purchase Price, and the same OREC Purchase Price will apply to all ORECs within a given Energy Year, regardless of which Project Phase from which the ORECs are generated.
63. The BPU’s response to Question 23 in the Second Solicitation confirms that if a project’s COD is delayed by a year after the anticipated COD, the Year 2 OREC price, escalated, will apply.
a. Can the BPU confirm whether this is valid for (1) a Board-approved COD delay only, or (2) any COD delay, regardless of Board approval?
RESPONSE: The Board Orders for both the Second Solicitation and Third Solicitation state that if a Project is delayed for any reason, the first year OREC price shall be the first year OREC price as bid, consistent with the response to Question 62a.
b. Can the BPU confirm whether the 20-year OREC term is kept whole for (1) a Board-approved COD delay only, or (2) any COD delay, regardless of Board approval? E.g., would the project see its OREC pricing schedule extended to Year 21, escalated, regardless of Board approval?
RESPONSE: If the COD is delayed by more than six months with Board approval, there will be no change to the OREC Pricing Schedule, other than the fact that it will commence on a delayed basis commensurate with the actual delay and be extended for a comparable period. If the COD is delayed by more than six months without Board approval, the Project shall receive the payments dictated by the OREC Pricing Schedule starting on the actual COD and shall cease receiving payments six months beyond the end date of the OREC Pricing Schedule.
64. For Projects with pricing that is contingent upon the selection of another Project (e.g., a developer bids one Project at a certain OREC as a standalone Project, plus a bundle of Projects including that first Project as well), please confirm that an Applicant should indicate the contingent pricing by the submission of an additional Application Form, and that it is not anticipated that the contingent and non-contingent pricing would be included in the same Application Form. If this is incorrect, please confirm how such contingent and non-contingent pricing should be presented.
RESPONSE: Confirmed, each separate price for a Project should be submitted in a separate Application Form, with any other information that would be different also shown in that Application Form. The Application Narrative should include a summary of all Application Forms included in the Application, with clear labeling and a description of what is represented by each Application Form with regard to a given Project.
65. For Projects with pricing that is contingent upon the selection of another Project (e.g., a developer bids one Project at a certain OREC as a standalone Project, plus a bundle of Projects including that first Project as well), but in which case the two Projects have different OREC prices, will the evaluation be done (a) Project-by-Project or (b) on a weighted average basis? As another example, if the evaluation is done as a weighted-average but a competing Project bids between the two separate prices as mentioned above (but higher than the weighted average), is the weighted-average price the determining factor to assessing price-competitiveness?
RESPONSE: Pricing that is contingent on the selection of multiple Projects will be considered within the Project portfolio evaluation, with competing portfolios compared on a total and weighted-average basis.
66. (Attachment 11, Page A11-1) For Re-Bid Projects that may have earlier COD dates, meeting the proposed COD is of the highest importance. Securing a lease and locking in marshalling and/or manufacturing areas for the applicable timeline is therefore a priority.
a. Can the BPU confirm whether the NJ EDA’s leasing process and decision to allot parcels and timeslots is worked jointly with the BPU’s selection of offshore wind projects? Specifically, can the BPU confirm that priority will be given to earlier CODs in leasing parcels, acknowledging that the NJ EDA will have to identify an optimal sequence of OSW projects awarded through the BPU Solicitations to support their meeting their target CODs?
RESPONSE: NJEDA runs a standalone leasing process that is separate from the NJBPU OREC solicitation process. The NJEDA process consists of issuing a public notice for lease for property at NJWP, and soliciting non-binding lease offers. The notice is posted on the NJEDA website. The offers received in response to the notice are evaluated on a number of factors, including rent level and job creation associated with the prospective lease. As part of the evaluation of offers against the stated evaluation criteria, NJEDA intends to consider the likelihood that the commitments made in the offer will be realized, including, among other considerations, whether or not there is a contracted pipeline of work that the lease would support.
b. Alternatively, can the BPU confirm that it will consider EDA / NJWP constraints that are out of a qualified applicant’s control and impacting their OSW project timeline / leading to COD delays to be excusable delays leading to a revised COD per Board approval, preserving both the inflation adjustment timeline and the OREC term?
RESPONSE: The Qualified Project is able to petition the Board for a COD delay in response to constraints that are out of the Project’s control.
67. With regard to the State’s clearly stated appetite for manufacturing of nacelles or nacelle assembly at the NJWP, can BPU clarify if nacelle assembly and nacelle facility expansion are factored in space availability at the NJWP? Further, in the case where the EDA and an OEM are unable to reach agreement for a lease at the NJWP (outside the control of the developer/Project) for a Tier 1 commitment, will the BPU remove such commitments from the Board order (or reduce the associated commitments associated with that facility)?
RESPONSE: NJEDA considers that manufacturing for a wide range of components, including WTG components, and other secondary components that comprise the overall ‘balance of plant’ for an offshore wind farm, could be accommodated at NJWP. Nacelle assembly and nacelle facility expansion are factored in as prospective manufacturing opportunities at NJWP, as described in the NJBPU awarding Board Orders for the Second Solicitation Qualified Projects.
Any Applicant who may be considering making a commitment to assemble/manufacture nacelles at NJWP, or any other Tier 1 or Tier 2 commitment at any location as part of the local content component of its bid to a BPU OSW project solicitation should consider any commercial conditions that its OEM partner (i.e., the prospective NJWP tenant) may prescribe that are outside of the control of NJEDA and other state entities. Applicants are encouraged to identify any such commercial conditions that, until resolved, would preclude the prospective tenant from entering into a lease at NJWP, or would otherwise delay the execution of a lease in a way that might weaken or otherwise jeopardize the Applicant’s local content commitments.
If this question is referencing the required performance guarantees described in Section 2.6 of the SGD, to the extent the Applicant commits to Tier 1 supply chain manufacturing capability for nacelle assembly and nacelle facility expansion at the NJWP or alternative port in New Jersey, the Board will incorporate language in the Board Order that protects the Applicant from failure to deliver such commitments as a result of circumstances or conditions beyond the Applicant’s reasonable control.
68. (Section 3.18, Page 35) Can the BPU provide greater clarity on what may constitute a “viable pathway to expand” and what criteria would be most important for the BPU as most of these pathways might have conditions and contingencies associated with them.
RESPONSE: Applicant should describe how the facilities they propose could be expanded to increase the localization of manufacturing of nacelle facilities in New Jersey in the future. Please provide additional insight in the nacelle modules that may be assembled in Europe, Asia, or the U.S., describing at which of these locations such assembly may occur, using subassemblies and subcomponents from existing turbine OEM supply chain to support offshore wind development in New Jersey. Please provide additional insight into the subcomponents and subassemblies that will be manufactured and modularly assembled in New Jersey.
69. SGD Section 3.8 states that "Land purchase and lease costs (including at ports and for right-of-way concessions) shall be included in guaranteed in-state spending, but shall be excluded from economic model input values for the purpose of determining indirect and induced economic impacts. This spending is includable as a direct economic impact, but shall not be counted toward indirect and induced economic impacts." We note that this wording contradicts the wording in the Third Solicitation SGD. Please confirm that this change was intentional and land purchase and lease costs shall be included as direct, guaranteed in-state spending.
RESPONSE: Confirmed.
70. We appreciate that the BPU has updated the Inflation Adjustment formula widening the raw material indices to copper and also adjusted the timing of the adjustment. This is bringing better protection to the developers.
a. We have noticed that indices are US-based and don't factor in any risk associated to foreign indices. Could the BPU explain why this aspect has not been factored into the Inflation Adjustment?
RESPONSE: Board Staff considered all comments submitted on the draft SGD in making a final determination of the inflation adjustment to be used in the Fourth Solicitation. The reasonableness of additional and alternative indices was considered before Board Staff finalized the mechanics of the inflation adjustment factor.
b. We have noticed that the Inflation Adjustment is not protecting from foreign exchange ("FX") exposure. Project costs can have a significant exposure to foreign currencies such as EUR. Could the BPU explain why this aspect has not been factored into the Inflation Adjustment?
RESPONSE: Board Staff considered all comments submitted on the draft SGD in making a final determination of the inflation adjustment to be used in the Fourth Solicitation. The reasonableness of additional and alternative indices was considered before Board Staff finalized the mechanics of the inflation adjustment factor.
71. Can the BPU please elaborate on why the inflation formula does not take into account more financial risk for the developers, and only hedges against macroeconomic trends related to cost of labor, fabrication, and raw material needed for offshore wind? We believe that interest rates could be integrated as part of the Inflation Adjustment as a second mechanism that would apply at a specific period in time and on top of the Inflation Adjustment formula, allowing developers to have a hedge when they start raising debt financing for their project.
RESPONSE: Board Staff considered all comments submitted on the draft SGD in making a final determination of the inflation adjustment to be used in the Fourth Solicitation. The reasonableness of additional and alternative indices was considered before Board Staff finalized the mechanics of the inflation adjustment factor.
72. SGD Section 3.8 requires guarantees "on a total basis" for the development phase and construction (including component manufacturing), as well as for four separate five-year periods during operations.
a. Please confirm that this is correct: For the operations phase, Applicants must propose four separate, independent guarantees for in-state spend and four separate, independent guarantees for jobs. Each will be measured after its respective five-year period. In the event of a shortfall, the Applicant has an opportunity to cure, and if not cured, then penalties kick in.
RESPONSE: Confirmed.
b. Are the references to "construction (including component manufacturing)" on SGD page 37 to signify that component manufacturing may not fully overlap with project construction and thus BPU seeks Applicants to propose a longer time period for the construction phase to be fully inclusive of component manufacturing?
RESPONSE: In-State spending and jobs associated with component manufacturing should be included in the construction phase guarantees, regardless of when the component manufacturing takes place relative to Project development and construction.
c. Please confirm that guarantees for the development and construction phase will be reported and measured separately, but shall be cured together (if applicable) at COD after the construction phase is complete.
RESPONSE: Shortfalls relative to the in-State spending guarantees for the development and construction phases will be calculated separately, with at least 90% of any remaining shortfall, after an opportunity to cure, applied to a reduction in the OREC price over the full OREC term. The calculation of the OREC price reduction equivalent in value to 90% of the expenditure shortfall, if applicable, will be set by Board order. The opportunity to cure a shortfall relative to the in-State spending guarantee for the development phase could occur at the time that the development phase is completed.
73. Can BPU elaborate on how economic impacts and strength of guarantees of economic impacts are weighted within the 20% weighting for the evaluation criteria?
RESPONSE: The components and relative weightings of the 20% economic impacts and strength of guarantees of economic impacts criteria have not been included in the SGD and will not be disclosed to Applicants.
74. How would BPU treat a project option with an alternate interconnection point that later results in interconnection efficiencies for the project option as a result of the selected SAA 2.0 project(s)? Would there be an opportunity for a project option with an alternate interconnection point to utilize an SAA 2.0 solution, and how might that be treated in a Board Order?
RESPONSE: The Board does not expect the Fourth Solicitation Projects to utilize an SAA 2.0 solution. If an SAA 2.0 solution is pursued and it is found that interactions with a Fourth Solicitation Project can create efficiencies, consistent with applicable law, Board Staff and relevant stakeholders will evaluate an approach to equitably address the opportunity.
75. SGD Section 3.17, footnote 120 states that “Ratepayer net costs must not include the value of potential decreases in market prices attributable to the Project." Please confirm that this footnote is intended to be specific to SGD Section 3.17 and the potential decrease in market prices attributable to the Project can be included in the economic impacts analysis required per SGD Section 3.8.
RESPONSE: The economic impacts analysis included in the Application per SGD Section 3.8 should be based on the direct, indirect, and induced impacts associated with Project spending and jobs. Applicants may present an analysis of the potential decrease in market prices attributable to the Project, but this analysis should be presented separately and clearly identified as such.
76. The SGD notes that "An Applicant may propose that it retain up to 25% of incremental energy revenues if the project’s energy sales exceed those associated with the sale of ORECs."
a. Please confirm that if developers propose in their Application to retain 25%, and Board Order awarding the Qualified Project in the Fourth Solicitation does not explicitly disapprove, developers are permitted to retain the 25% excess revenues.
RESPONSE: Yes.
b. If the above is not correct, please advise
RESPONSE: See response to (a).
77. Please confirm that these two statements from the response to Third Solicitation Question 6 are still accurate: "An Applicant may propose that it retain up to 25% of incremental energy revenues if the Project's energy sales exceed those associated with the sale of ORECs. Energy revenues after the 20-year OREC term can be retained in full by the Project."
RESPONSE: Confirmed.
78. Please confirm that the cost of materials, labor and/or supplies from utilizing an existing or planned Tier 1 supplier is not considered a Tier 1 infrastructure investment, as a Tier 1 investment is strictly defined as a commitment to help fund new, or fund expansions of, Tier 1 facilities.
RESPONSE: Please see the response to Question 26.
79. Will the BPU make public the Applicants who have submitted a Notice of Intent to Respond at any point before the bid submittal deadline?
RESPONSE: No.
80. What is the time period (e.g., monthly, annually) for which the excess energy revenues are calculated as it pertains to the following: "To the extent that the project produces energy revenues exceeding those associated with the sale of ORECs, the Applicant may propose that it retain up to 25 percent of the incremental energy revenues, but not any other environmental attributes or other benefits, with the remainder to be returned to ratepayers " (Attachment 5, Application Requirements, page 13).
RESPONSE: Annual.
81. Regarding SGD Section 3.2, "Applicants are required to include in the Application the equipment that is intended to be used in the Project. Applicants will not be penalized if the proposed equipment uses new or innovative technology and as a result does not have a commercial operating history, subject to review of the relevant required information, including the supplier's track record of innovation, financial strength, certification plans, or any other information that the Applicant finds pertinent." Please confirm that Applicants are permitted to include in their Application equipment that is not commercially available today, subject to the Applicant also providing relevant supporting information in the Application?
RESPONSE: Confirmed.
82. If an Applicant proposes the use of "innovative technology," would the Applicant be exempt from the SGD requirements regarding technology specs and/or technology-specific "wind resource and energy assessment?" Attachment 5 - Application Requirements - Page 8. If not exempt, how might applicants using "innovative technology" comply with the SGD requirements?
RESPONSE: Applicants proposing to utilize a WTG for which a wind resource and energy assessment using the exact manufacturer, model, and specifications is not available because of the development state of the WTG should provide a wind resource and energy assessment that represents the Applicant’s best estimate of the WTG’s performance, with an explanation of all assumptions used to develop the wind resource and energy assessment.
83. The Final SGD states in Section 3.2 that "Section 2 of the Application Narrative must include the following information for each Project, as required under N.J.A.C. 14:8-6.5(a) et seq.: (.) A letter of intent or memorandum of understanding from the proposed engineering, procurement, and construction ("EPC") contractor, balance of plant ("BOP") contractor, and/or key construction contractors or vendors." Because the offshore wind projects being considered are typically not built by a single EPC or BOP contractor but rather by several contractors with the scope divided into smaller portions, please clarify whether BPU will deem it acceptable to receive a letter of intent from the key contractors identified at time of bid submission.
RESPONSE: Yes.
84. What happens to revenues received before COD? Please confirm that developers can retain all revenues before start of the OREC term, which is measured as COD
RESPONSE: The Board will not have any claim to revenues received before or after the OREC term.
85. If a Qualified Project is abandoned prior to the posting of any of the three types of security, what is the project's liability?
RESPONSE: Any liability would have to be determined on a fact-specific basis.
86. Please confirm that BPU will continue to accept questions after the May 31 deadline. We kindly acknowledge that Applicants haven't received responses to all questions and there may be follow-up questions to previously submitted questions. If new questions will not be allowed, can Applicants request clarifications to questions answered on or after the May 31 deadline?
RESPONSE: Applicants may ask follow-up questions to clarify answers posted after the May 31st deadline, and Board Staff will endeavor to post answers as soon as possible.
87. Please clarify the meaning of footnote 120 (“Ratepayer net costs must not include the value of potential decreases in market prices attributable to the Project”)? For example, OREC awards will decrease the amount of MWh that load serving entities would otherwise need to procure from the market for ratepayers. In addition, the entry of $0 cost supply will push higher cost generation “off the margin” when setting power prices in the PJM market. Can both of these cost reductions be considered when determining ratepayer net costs in response to SGD Section 3.17?
RESPONSE: Applicants must include a calculation of ratepayer net costs that does not include the value of potential decreases in market prices attributable to the Project. Applicants may also present an analysis of the potential decrease in market prices attributable to the Project, based on a decrease in the amount of MWh that load serving entities would otherwise need to procure from the market for ratepayers, the effect of $0 cost supply pushing higher cost generation “off the margin”, and/or any other factors, but this analysis should be presented separately and clearly identified as such.
88. If an Applicant is proposing to use the remaining SAA Capability reserved at Smithburg (i.e., use the fourth PBI circuit), we have the following questions.
a. Will that Applicant be able to use the SAA 1.0 awarded projects (i.e., LCS-Smithburg 500kV transmission line and Smithburg substation upgrades) to inject the remaining capacity to Smithburg? Or will a separate line and transmission infrastructure to facilitate the connection from LCS to Smithburg be required?
RESPONSE: A separate line and transmission infrastructure to facilitate the connection from LCS to Smithburg may be required to facilitate the connection from the LCS to Smithburg.
b. If separate transmission infrastructure to facilitate the connection from LCS to Smithburg is required, will the cost be eligible for TSUC? In other words, please confirm that anything beyond the LCS POI (if applicable) is considered eligible for inclusion in the TSUC.
RESPONSE: Yes.
c. If an Applicant requires a scope change to a previously awarded transmission project, will they need to provide cost estimates for the change or would the transmission awardee be responsible for the additional costs?
RESPONSE: Such costs would be included in the Project’s TSUC.
89. Related to SGD Section 3.13, please confirm if Applicants in the Fourth Solicitation that propose to utilize the fourth PBI circuit will be responsible for (and thus required to provide cost estimates for in its Application) all material procurement and cost of construction plus long-term maintenance for all AC equipment that would be installed within the LCS, to the extent it is applicable to its Project?
RESPONSE: Please see the revised response to Question 19d. Design and installation of the AC equipment after the POI (the AC side of the converter station at the LCS) will be determined by PJM and included in the PJM transmission system upgrades that will be constructed by MAOD and JCPL, with the costs included in TSUC. The transmission equipment before the POI (not including the PBI) will be the responsibility of the Qualified Project.
90. How should Projects that propose to use the Prebuild account for the uncertainty regarding what will ultimately be included in the SAA 1.0 scope in setting their TSUC sharing thresholds?
RESPONSE: Projects that propose to use the Prebuild should elect to include TSUC sharing and set their TSUTC1, TSUCT2, and TSUCT3 values to $0, resulting in all TSUC, whatever they ultimately are, being recovered through the TSUCPA.
91. Please confirm that if Applicants intend to utilize the fourth PBI circuit and the SAA Capability currently reserved at Smithburg, they should specify the LCS as the POI. Specifically, is the interconnection point considered the HVAC terminals of the onshore HVDC station?
RESPONSE: Confirmed, the LCS, specifically the AC side of the converter station, is the POI for Projects using the fourth PBI circuit and SAA Capability reserved at Smithburg.
92. In Question 11, please confirm that the underlined word is "net."
RESPONSE: Confirmed. Question 11 has been corrected.
93. Please confirm that an Applicant can claim as "in-State" spending/expenditures the full contract amount awarded to a New Jersey business that is providing components/subcomponents and services for the Project even if the sourcing of the components/subcomponents or labor are out of the Applicant's direct control and some of the components/subcomponents or labor may come from outside New Jersey.
RESPONSE: Contracting through a New Jersey entity that procures a manufactured good from outside the state must only include the New Jersey-based value added or markup on the manufactured good. For example, if the cost of the manufactured good is $1 million and the cost of the delivered good to the developer who receives an award as a Qualified Project is $1.2 million, which involves New Jersey-based services such as in-State transportation, warehousing, procurement, engineering services, and a share of overhead costs such as insurance and office leases incurred by the New Jersey contractor, the in-State direct expense is $200,000. The Qualified Project bears the responsibility for sufficient documentation to ensure that the added value allocable to New Jersey can be determined.
94. Please clarify how BPU will distinguish between PBI and non-PBI bids in its evaluation process. Specifically, please explain if and how the evaluation criteria and normalizing formula distinguishes the different scope and associated cost impacts of PBI vs Non-PBI bids, including, primarily, costs for land fall, onshore routing, and grid connection which are borne by the proposer in the case of non-PBI bids but largely borne by SAA and PBI developer(s) in the case of PBI bids.
RESPONSE: In determining whether to award a Project using the Prebuild in the Fourth Solicitation, versus potentially assigning the fourth Prebuild circuit – three of the four Prebuild circuits have already been assigned – in a later solicitation, consistent with the evaluation criteria set forth in the SGD, Staff will consider overall cost to ratepayers and viability of the proposed Project.
95. Please provide additional information regarding how “[a]spects of likelihood of successful commercial operation related to feasibility of Project design will also be used to determine whether a Project is eligible to become a Qualified Project.”
RESPONSE: Eligibility to become a Qualified Project will be determined based upon both consideration of individual Project design parameters and consideration of the Project’s overall Likelihood of Successful Commercial Operation pursuant to the evaluation criteria set forth in the SGD.
96. What relief would NJ BPU provide to Qualified Projects (e.g. provide ability to petition for alternate POI) should the to-be-awarded PBI project be considered a Connected Action under NEPA and face permitting challenges related to one or all Qualified Projects under Board Order to use PBI?
RESPONSE: Board Staff is working diligently to mitigate the risks of the PBI being reviewed as a Connected Action under NEPA. However, a final determination from the agencies on whether PBI is a connected action with offshore wind projects, has not yet been provided. Board Staff is also working in parallel with the relevant federal agencies to identify an alternative approach to permitting that maintains the PBI schedule in the event that USACE determines that it is unable to review permits for portions of PBI subject to USACE jurisdiction prior to BOEM completing their NEPA analysis for the “connected” offshore wind project. An Applicant that proposes to use the PBI in the Fourth Solicitation is expected to account for all permitting risks in their bid design and pricing. Applicants should not expect or rely upon the opportunity to get an alternate route to the PBI approved post award.