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Questions submitted regarding the solicitation will be collected, answered, and posted here by Board Staff on a rolling basis. Please continue to frequently check this page for updates. 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 February 14, 2024.
Submit questions by email to njoswprebuild@levitan.com with the subject line "NJ OSW Prebuild Question" and cc osw.stakeholder@bpu.nj.gov.
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 November 17, 2023 Order, In the Matter of the Opening of a Solicitation for a Transmission Infrastructure Project to Support New Jersey's Offshore Wind Public Policy, Docket No. QO23100719; and (ii) the November 17, 2023 New Jersey Offshore Wind Prebuild Solicitation Solicitation Guidance Document Application Submission for Proposed Prebuild Infrastructure Project ("Solicitation Guidance Document").
1. If a consultant we have contracted to work with us on the proposal attends the walkthrough, does this satisfy the requirement for submitting an application? Or must it be an employee of the submitting entity?
RESPONSE: A contracted consultant who will be part of the Proposal preparation team may attend the walkthrough as the prospective Applicant's representative.
2. Will all of the slides be posted?
RESPONSE: Yes. The bidders' conference slides are available here.
3. Since the project costs are required to be provided for both the full scope and the onshore-only scope, is it the intent of the BPU to consider providing an award for only the onshore work?
RESPONSE: The BPU may make an award for either the full scope of work or the onshore-only work.
4. Is it required that all routing begins at Sea Girt?
RESPONSE: The PBI landing point and POI must be as specified in Section 1.2 of the SGD.
5. Are HDDs required at the landfall, or is open cut an acceptable option?
RESPONSE: HDD is required per the SGD. Open cut would not be feasible under Land Resource Protection ("LRP") rules, as there are significantly more environmental impacts with open cut. In addition to the LRP permitting hurdles, the Coastal Engineering program in conjunction with the USACE has beach nourishment and stabilization projects all along NJ's coast. Therefore, to avoid a significantly elevated level of environmental impacts, an HDD approach is required.
6. The SGD states that the circuits must be capable of "at least" 1,360 MW for 320 kV circuits, and 1,500 MW for 525 kV circuits. What if ampacity modeling shows this rating cannot be achieved at a particular part of the circuit (example at the landfall)?
RESPONSE: We encourage each Applicant to make every effort to meet or exceed the SGD requirements.
7. There could be an instance of thermal impacts of a circuit affecting the rating of one of the adjacent cables. In these cases, should priority be given to maintaining 4 circuits in a single roadway, or maintaining the minimum circuit ratings (1,360 MW and 1,500 MW)?
RESPONSE: We encourage each Applicant to make every effort to meet or exceed the SGD requirements and use creative solutions to solve possible issues. However, Applicants should prioritize avoiding thermal or physical constraints over maintaining a single ROW.
8. Page 4 of the BPU's PBI Solicitation Order refers to the authorizing legislation, and states that, "In this legislation, the New Jersey Legislature enshrined the concept of an 'open access offshore wind transmission facility' into State law, defined as 'an open access transmission facility, located either in the Atlantic Ocean or onshore, used to facilitate the collection of offshore wind energy or its delivery to the electric transmission system in this State.'" Footnote 22 refers to N. J. S. A. 48:3-51, the definitions section of the statute. But the statute does not say "onshore" - it still says "offshore":
48:3-51 Definitions relative to competition in certain industries.
As used in P. L. 1999, c.23 (C.48:3-49 et. sec.):
"'Open access offshore wind transmission facility' means an open access transmission facility, located either in the Atlantic Ocean or offshore, used to facilitate the collection of offshore wind energy or its delivery to the electronic transmission system in this State."
We would appreciate clarification of this issue as there appears to be a conflict between the language of the Solicitation Order and the language in the current version of the statute.
RESPONSE: Board Staff acknowledges that N.J.S.A. 48:3-87.1(e) states, "Notwithstanding any provision of P.L.2010, c.57 (C.48:3-87.1 et al.) to the contrary, the board may conduct one or more competitive solicitations for open access offshore wind transmission facilities designed to facilitate the collection of offshore wind energy from qualified offshore wind projects or its delivery to the electric transmission system in this State."
Note, however, that N.J.S.A. 48:3-87.1(e) was cited to conduct SAA 1.0, which awarded onshore transmission facilities. BPU Legal is comfortable using the cited statute for authorization . Board Staff has also confirmed with PJM Staff that it also accepts this statutory authority for purposes of moving forward with the proposed projects submitted under this SGD.
9. Can the developer propose a different index for the inflation adjustment mechanism?
RESPONSE: No.
10. When will the inflation adjustment mechanism be applied to the project? Page 22 of the SGD states that the mechanism "will account for the change in input costs due to inflation across a number of specified indices, between the time of the Application and 18 months before the Expected In-Service Date." The variable definitions on page 23 of the SGD reference "the time of FERC's approval of the DEA" and "three months before and three months after FERC's approval of the DEA."
RESPONSE: The references to FERC's approval of the DEA are incorrect. The correct variable definitions are:
CapCostinf is the capital cost after inflation adjustment, to be used as the Firm Cap level for the purposes of preferred cost containment; and
IndexM,i is the average index value for cost component i over the three months before and three months after the date that is 18 months before the Expected In-Service Date;
11. How will the values of IndexM,i be forecasted and calculated?
RESPONSE: The inflation adjustment mechanism will be applied to the project in an Applicant's Application based on the calculated average of the published values for each index over the three months before and three months after the date that is 18 months before the Expected In-Service Date. No forecasting of index values is required for purposes of implementing the inflation adjustment mechanism.
12. Please clarify the statement that the CapCostinf would ".be used as the Firm Cap level", and that the CapCostbase is the ".level of the Firm Cap".
RESPONSE: The Firm Cap values submitted in the Application Form will be used as CapCostbase, and CapCostinf will be calculated using the inflation adjustment mechanism, with the resultant value used as the final Firm Cap value.
13. Can the inflation adjustment mechanism increase the cost above the Firm Cap or just the Cost Cap?
RESPONSE: The inflation adjustment mechanism is used to set the Firm Cap that will be used as the Cost Cap, based on the Firm Cap submitted in the Application Form and the formula specified in the RFP. As stated on page 23 of the SGD: "CapCostinf is the capital cost after inflation adjustment ... to be used as the Firm Cap level for the purposes of preferred cost containment."
14. Is the commitment security to NJ BPU (10% CAPEX) in addition to LC requirement in PJM DEA (3% CAPEX)?
RESPONSE: Yes, they are distinct commitment securities.
15. Cable system design typically requires the cable providers' participation. Cable specifications such as bending radius, pulling tension, cable insulation thermal characteristics, cable reel size can vary amongst cable providers. With a cable provider yet to be selected what guidance can be given to developers?
RESPONSE: [response]
16. Could the BPU provide greater clarity on what is considered "one corridor", versus an "alternative corridor"? Could the BPU elaborate on what is considered a "split ROW"?
RESPONSE: A corridor is defined in the SGD on page iii as "the cable route from the transmission cable's landfall location on the shoreline to the POI into the regional electric grid." An alternative Corridor would be a different route from landfall to the POI. Each Corridor is self-contained, and an Applicant can offer multiple Corridors. Within a Corridor, the cable route can be contained within a single ROW for its entire length or split into multiple ROWs for a portion of the route length. For example, this can occur if the ROW along a segment is not wide enough to accommodate all Circuits. The route length for which the Circuits are separated into multiple parallel ROWs would be considered a split ROW.
17. Will the BPU commissioned study that MAOD completed on the PBI be provided to interested parties?
RESPONSE: No.
18. Please elaborate on the examples provided on the cost containment and schedule commitment and how they would be calculated for the rate recovery mechanism. Specifically, please clarify the calculation of the weighted average ROE and its function in the FERC approved ROE. Could further information be provided about the Firm Cap, Cost Cap, and Construction Cost Cap use in the ROE calculation.
RESPONSE: TThe Firm Cap and Cost Cap are the same value, calculated as the Firm Cap for Total Project (entered in the Application Form) after the inflation adjustment mechanism is applied. The Construction Cost Cap is the Cost Cap plus Uncontrollable Costs.
The Applicant will propose values for its ROE and Cost of Debt in the Application. The Board will consider the proposed ROE, on an after-tax levered basis, in performing price analysis. FERC will review the proposed ROE and Cost of Debt and make an independent determination regarding each value.
The weighted average ROE, as shown in the examples on page 24 of the SGD, is a function of the ROE associated with each portion of the incurred costs (up to 100%, 100% to 110%, and 110% to 115%) and the ROE for each portion of the incurred costs including incentive adders (FERC-approved ROE, average of FERC-approved ROE and Cost of Debt, and Cost of Debt). The weights will be the share of the costs incurred that fall into each ROE recovery category.
There is an error in the calculation shown for Example 1. The weighted average ROE in this case should be 9.81%, calculated as (100% * 10.25% + 10% * 7.75% + 5% * 5.25%) / 115%. The calculation for Example 2 is correct: (100% * 9.3% + 5% * 6.8%) / 1.05% = 9.18%.
19. Is there a bid fee for the Prebuild Infrastructure Solicitation?
RESPONSE: No.
20. Throughout the Prebuild Solicitation Guidance Document, it is clear two (2) 1,500 MW Circuits shall be designed at 525 kV and two (2) 1,360 MW Circuits shall be designed at 320 kV. However, in Section 4.2, the document requests study results for four (4) 1,360 MW circuits designed at 320 kV. It may be difficult to use the duct banks for four (4) 1,360 MW circuits at 320kV because of the additional electrical current. The maximum current in a cable for a 525 kV, 1,500 MW system is 1,429 Amps. The maximum current for a 320 kV, 1,360 MW system is 2,125 Amps. This is nearly a 50% increase in electrical current, which greatly increases the heat generated in a cable. These study results may show failures unless the duct banks are redesigned. Does the BPU have any technical analysis it can share to show that four (4) 1,360 MW, 320 kV systems can be used in duct banks optimized for two (2) 1,500 MW, 525 kV circuits and two (2) 1,360 MW, 320 kV circuits? How will failing results be handled for the case of four (4) 1,360 MW circuits at 320 kV?
RESPONSE: Duct bank optimization is up to the Applicants to meet the Power Delivery requirements. The SGD states that 4 circuits at 320 kV have to meet the Maximum Power Delivery of 1,360 MW per circuit simultaneously. Applicants should specify the areas of physical and thermal constraints which may preclude meeting this requirement and how the Applicants plan to mitigate the constraints.
21. Section 3.2 defines the Maximum Power Delivery as (2) Circuits capable of at least 1,360 MW operating at 320 kV, and two (2) Circuits capable of at least 1,500 MW operating at 525 kV, measured at the POI. Section 4.2 requests study results for when circuits are operating at those same power levels, which can read as if cables should be loaded exactly to 1,360 MW and 1,500 MW. Please confirm that the studies should be run at a power level above 1,360 MW and 1,500 MW to account for electrical losses at the onshore converter station and throughout the PBI. Is there a specific electrical loss assumption that should be used by all bidders to gain consistency?
RESPONSE: The Maximum Power Delivery is meant for the power to be delivered at the LCS. There is no specific loss assumption. Applicants must identify the loss assumption used in their design calculations.
22. Does the BPU have any preference on what maximum conductor temperature should be used for 320 kV and 525 kV cables? Are bidders able to use aggressive assumptions assuming improvement in technology availability before cables are installed?
RESPONSE: There is no preferred maximum conductor temperature. Applicants must identify the maximum conductor temperature along with other assumptions, and their rationale, used in their design calculations.
23. In Section 4.2, the BPU refers to land or leases that may need to be acquired for the Project. Assuming that MAOD is providing land for the converter stations and if the Bidder assumes that duct banks would be placed in public ROWs, what other leases or land purchases is the BPU referring to?
RESPONSE: In Section 4.2, pages 7 - 18 of the SGD requires "An identification of the nature of the Applicant's land ownership and lease requirements for all aspects of the Project, a plan for accomplishing remaining steps toward acquiring necessary leases or land ownership, and a demonstration of adequate financial resources to acquire any land and/or leases needed to undertake the Project." The identification of these items only needs to be addressed to the extent that the Applicant's proposed Corridor(s) necessitates land ownership or leasing.
24. What is the request process or DMAVA point of contact for the GIS data?
RESPONSE: The DMAVA Document Package can be requested by emailing the DMAVA Points of Contact: Jill Priar (Jill.Priar@dmava.nj.gov) and Steven Hoffman (Steven.Hoffman@dmava.nj.gov).
25. Is DMAVA able to provide available utilities map or other indicative information?
RESPONSE: The DMAVA Document Package can be requested by emailing the DMAVA Points of Contact: Jill Priar (Jill.Priar@dmava.nj.gov) and Steven Hoffman (Steven.Hoffman@dmava.nj.gov).
26. Is DMAVA limiting the location of the transition vaults to any specific area of the Sea Girt NGTC?
RESPONSE: DMAVA requests bidders to avoid utilizing portions of the property that are not in the flood plain so that DMAVA may preserve those areas for our future development needs. DMAVA request proposed vault locations minimize disruptions to operations at the site. Vault locations should not result in impediments to existing or proposed infrastructure and improvements on the site.
27. Are there any changes to the Sea Gift NGTC site since the last visit in April?
RESPONSE: There have been minimal changes at the site since April 2023 . The non-substantive changes were noted during the bidders' walkthrough in December.
28. It is unclear whether the Federal Energy Regulatory Commission ("FERC") is supportive of the PBI being recovered through its formula rates. In order to establish a formula rate, FERC requires that the project have at least one transmission asset. It is unclear whether the PBI, without any energized cables, will qualify as a transmission asset. Until FERC clarifies that it is supportive of the cost recovery of the PBI in a formula rate, the timely delivery of the PBI is at significant risk. Can the BPU provide clarity on any engagement or support from FERC? If FERC has not yet weighed in on the NJ PBI Solicitation, can the BPU provide clarity on how developers (PBI bidders and offshore wind generators) may mitigate this risk?
RESPONSE: The Board Staff recognizes that the PBI is an unconventional project. Board Staff, in coordination with PJM Staff, conducted its due diligence on this question. Board Staff informally met with FERC Staff, who confirmed they understood the approach being used for the PBI. In those discussions, from the perspective of Board Staff, FERC Staff did not express any concerns that would ultimately preclude the PBI from obtaining FERC rate treatment. Neither Board Staff nor the Board sought a formal ruling from FERC on the matter.
Board Staff notes that the PBI falls within PJM's definition of "transmission facilities." Under the PJM Interconnection, L.L.C. Operating Agreement (https://www.pjm.com/directory/merged-tariffs/oa.pdf), "transmission facilities" is defined as
facilities that: (i) are within the PJM Region; (ii) meet the definition of transmission facilities pursuant to FERC's Uniform System of Accounts or have been classified as transmission facilities in a ruling by FERC addressing such facilities; and (iii) have been demonstrated to the satisfaction of the Office of the Interconnection to be integrated with the PJM Region transmission system and integrated into the planning and operation of the PJM Region to serve all of the power and transmission customers within the PJM Region.
The PBI clearly meets the first standard. The second standard is met because FERC's Uniform System of Accounts, 18 CFR 101, contains a placeholder for Underground Conduits (account 357) that house transmission cables. Board Staff confirmed with the PJM Office of Interconnection that the third standard is also met.
29. The local Agencies Having Jurisdiction ("AHJs"), of which several already have voiced opposition to offshore wind, will now be re-incumbered by all PBI solicitation bidders, after having been previously engaged by bidders in the third solicitation. AHJs will be (are being) asked to perform surveying and geotechnical borings in similar areas and routes (if not the same) as those that the offshore wind bidders have already completed. This duplicative engagement-first from offshore wind bidders and now from PBI bidders-is adding to both confusion and permitting fatigue from the AHJs. This fatigue will hinder the external affairs progress made with these entities. Cooperation and support from the AHJs is critical in successfully delivering the PBI according to the solicitation timelines and garnering local support. Further, the AHJs are necessary in allowing bidders to capture the detailed site survey data (especially the critical geotechnical data), as this data is absolutely required for a bidder to accurately design, price, and bid the various PBI components. Has the BPU considered engaging or coordinating with the AHJ's along commonly-proposed routes to avoid permitting fatigue?
RESPONSE: The BPU is aware of the potential impacts on the affected AHJs and is developing a strategy to engage with these AHJs.
30. Due to the timing concerns offshore wind developers have on the delivery of the PBI, we respectfully request that the BPU require ample transparency and coordination between the PBI developer and future PBI users. Such requirements may include active notification should the PBI developer experience delays, regular and transparent reporting on the development status, and availability to meet with future PBI users. Has the BPU considered including this as a consideration in their evaluation of the bids as well as a requirement in any resulting Board orders?
RESPONSE: The BPU will consider this requirement when developing the resulting Board Order.
31. In regard to the PBI Landfall HDDs, we recommend that the selected PBI design should include landfall HDD offshore exit pits on the southern side of the numerous existing subsea telecommunication cables and associated HDDs in this National Guard Training Center ("NGTC") area. This could include a portion of the four landfall HDDs being installed to the south and a portion to the north of these cables. Some of the NJRd3 bidders, as well as potential future NJ bidders, have offshore lease areas where the most logical and efficient export cable approach may be coming from north of these cables (where they also may have already collected offshore geophysical and geotechnical survey data), while some have offshore lease areas where the most logical and efficient export cable approach to the NGTC is from the southern side of the existing telecoms cables. Not having the landfall HDD exits installed in the area (northern or southern) that is most suitable for the different offshore lease areas will:
RESPONSE: Based on the recent awards to Qualified Offshore Wind Projects ("QOWPs" or "Qualified Projects"), BPU recommends that PBI designs incorporate landfall HDD offshore exit pits to the south of the numerous existing subsea telecommunication cables and associated HDDs in the area of the Sea Girt NGTC.
32. The PBI solicitation design requirements, which include two 320kV circuits at 1360 MW are highly concerning. We have worked with several electrical consultants and cable manufacturers who have modeled the ampacity of the PBI and all stated this capacity is not achievable for the PBI at the 320kV level. The cable modeling would need to use a 90- degree maximum operating temperature to be near the 1300 MW capacity range, but this maximum operating temperature is only available today with a single cable manufacturer, and is not matured in the market. We recommend that the PBI design be based off the current cable market capabilities. This will provide more viability and critical assurance the PBI can be delivered in a way that does not hinder future offshore wind projects. Furthermore, with all of the existing utility constraints it is unlikely the 1360 MW capacity can be met in the roadways of New Jersey. Can the BPU provide clarity on the viability and market readiness of 320kV at 1360 MW over a 10-12 miles transmission route?
RESPONSE: BPU recognizes the potential for technical and commercial challenges associated with the PBI design but is seeking solutions from Applicants that can meet these challenges in a creative way, in accordance with standards of technical excellence, and within BPU's cost containment and reliability goals.
33. A 525kV Converter Station and cable system can accommodate approximately 2 GW or more of capacity. Due to the costs of a 525kV Converter Station, it is in the New Jersey's ratepayers' interests to fully utilize the maximum capacity of this expensive system. Put differently, by requiring only 1500 MW of capacity on the 525kV circuit substantially underutilizes the capability of a 525kV bi-pole system and its export cable. Can the BPU clarify why requiring only 1500 MW on a 525kV circuit is in the best interest of New Jersey ratepayers? Has the BPU considered increasing this required capacity to allow the advanced 525kV technology to be fully and properly used?
RESPONSE: We encourage each Applicant to make reasonable efforts to meet or exceed the requirements set forth in the SGD. Applicants are free to propose PBI designs that can accommodate more capacity, provided the technical design is in accordance with the SGD's requirements.
34. In regard to Section 3.2 (page 8) of the PBI SGD states that, "[t]hese transmission capability ratings and circuit ampacities shall be for continuous operation occurring during the most restrictive seasonal conditions." Can the BPU please clarify if the PBI ampacity calculations can use a dynamic (time based) load profile or whether they must use steady state ratings (assuming 100% generation from the wind turbines at all times)?
RESPONSE: The PBI ampacity calculations must use steady-state ratings.
35. Section 1.4 (page 3) of the PBI SGD states that, "[t]he preferred Cost Containment commitments will utilize an inflation adjustment. that will automatically adjust the level of the submitted Cost Cap." Can the BPU please confirm that if a proposal does not utilize the preferred Cost Containment as currently written in the PBI SGD, the proposal may nonetheless be eligible to utilize the Inflation Adjustment?
RESPONSE: Applicants that do not utilize the preferred cost containment mechanism will be permitted to utilize the inflation adjustment.
36. In order to enhance economies and decrease community disruptions, would NJRd3 awarded Qualified Projects be permitted to coordinate with the PBI Solicitation winner to install their cables prior to the PBI being completely constructed? For example, would an awarded Qualified Project be permitted to install its export cable into their designated PBI conduit (if complete) while other PBI sections are still being completed?
RESPONSE: The BPU will coordinate with the Qualified Projects that will utilize the PBI and the PBI developer to foster timely installation while minimizing community disruptions and environmental impacts.
37. Section 3.5 of the PBI SGD (page 9) states that, "[t]he Applicant must keep all elements of the Prebuild, relating to Conduits, maintained until such time that they are transferred to or accessed by each Qualified Project that will install cables therein." Can the BPU please clarify which entity-the offshore wind developer or the PBI developer-is responsible for the following prior to export cable installation:
RESPONSE: Each conduit will end at a transition vault associated with a specific LCS circuit. Each Qualified Project will use the conduit associated with their designated LCS circuit, which will be coordinated with MAOD, the developer of the LCS.
The PBI developer will provide formal engineering documentation and certification by a third-party engineer regarding the integrity, of the full scope of the PBI, based on standard industry requirements, which include the use of video and borescopes for inspection purposes.
38. Section 4.3 of the PBI SGD (page 18) states that, "[s]taff may delay the Expected In-Service Date of the Prebuild at its discretion." Can the BPU please clarify this statement? For Qualified Projects that will utilize this infrastructure, discretionary delays without notification or consent from PBI users is highly concerning.
RESPONSE: The Board retains the discretion to delay the Expected In-Service Date of the PBI. Board Staff intends to utilize such discretion only if the delays do not conflict with Qualified Projects' COD. In the event of delay, PBI users will be notified on a timely basis. Any delay instituted by the Board would allow for a permissive extension of the Expected In-Service Date for PBI developers, however a PBI developer, if so inclined, would be allowed to maintain its current development schedule upon timely notification to the Board.
39. Section 4.3 of the PBI SGD (page 19) states that, "[a]pplicant will provide such documentation regarding Duct Banks, Cable Vaults, HDD bores, Conduits, and any submarine exit points in an informational filing to the Board prior to the utilization by a Qualified Project." Has the BPU considered including a requirement in any awarding Board order that requires the PBI developer to also provide this information to all awarded Qualified Projects that intend to utilize the PBI?
RESPONSE: The BPU will consider this requirement when developing the resulting Board Order.
40. Section 4.10.2 (page 33) of the PBI SGD provides for the treatment of the Commitment Security. We greatly appreciate the BPU's efforts to ensure the PBI is constructed on time, however, we urge the BPU to consider including a requirement that some of the forfeited securities be used to compensate Qualified Projects scheduled to utilize the PBI that will be uniquely harmed and incur cost and schedule overruns due to the PBI delay or abandonment. Can the BPU please confirm whether Qualified Projects may be eligible to receive some of the forfeited securities?
RESPONSE: The BPU will consider this when developing the resulting Board Order.
41. We appreciate the BPU's efforts in including a performance bond within the PBI SGD. As demonstrated in NJRd3, which required significant financial commitments for similar infrastructure, the BPU recognizes the critical nature of the PBI and seeks to ensure awarded developers deliver on their applications. With this in mind, and compared against the NJRd3 requirement to post security for the full cost of the PBI, we respectfully request clarity on how the 10% performance bond was determined. Why is the PBI's performance bond significantly less than the NJRd3's requirement?
RESPONSE: BPU is satisfied that the security requirement is reasonable and protects ratepayer interests.
42. We are deeply concerned the current 10% performance bond is insufficient to incentivize the PBI developer's decision to deliver the PBI, particularly if their ROE is ultimately diminished (due to delays) or the developer decides to abandon continued development for other reasons (e.g., their cost estimates were more than 10% lower than actuals, or fatal flaws are discovered in their permitting). While both the performance bond and the ROE reductions seek to incentivize on-time completion, we believe that these measures are simply not enough to provide the proper assurances to future PBI users. Has the BPU considered increasing the performance bond to provide a better tool to achieving the ultimate goal? Can the BPU provide assurances that the current 10% performance bond will suffice?
RESPONSE: BPU is satisfied that the security requirement and ROE reductions are reasonable. Board Staff will perform extensive due diligence on the PBI Applications to ensure that the selected developer is capable of completing successful development of the PBI in a timely manner to support delivery from the Qualified Projects utilizing the PBI.
43. Will price evaluation will be performed on CapCostbase or CapCostinf?
RESPONSE: Price evaluation will be performed on CapCostbase.
44. Section 4.9 of the PBI SGD (page 31) provides requirements for a form Lease Agreement. This agreement is a critical element as it will define clear roles and responsibilities between the PBI developer and end users of the PBI. We respectfully ask if the BPU will consider including the below points in all submitted PBI bids into this solicitation?
RESPONSE: The BPU will review these points when considering the proposed Form Lease Agreements and resulting Board Order.
45. Section 4.9 of the PBI SGD (page 31) states that the form Lease Agreement should address "[r]emedies for failure to perform, including options for a third party to step in to complete the construction of or operate the Prebuild." We request clarity on the type of remedies, and specifically, the recipient(s) of those remedies. While a remedy to complete the PBI is helpful, Qualified Projects utilizing the PBI may incur substantial damages, due to no fault of their own. How will these risks be mitigated?
RESPONSE: Following award, the selected developer will be expected to negotiate and execute with each Qualified Project a Lease Agreement that meets the requirements in the SGD, including the ability of the Lease Agreement to be between the selected developer and the one or more Qualified Projects selected by the Board to utilize the Prebuild Infrastructure. The Board does not currently plan to formally approve these Lease Agreements; however, the Board expects the Lease Agreements to include commercially reasonable terms, including incentives as well as damages and other remedies. Board Staff further expects the selected developer to provide Board Staff with fully executed courtesy copies of each Lease Agreement into which it has entered, within seven (7) days after each Lease Agreement's execution. The Board will consider and review the types and strength of remedies proposed by PBI bidders when conducting its evaluation.
46. In its October 25, 2023 Order, the BPU stated that Applicants who participated in the BPU's third offshore wind solicitation may re-submit their PBI proposals, should they so choose. Can the BPU please clarify whether interested offshore wind developers must create a separate entity in order to: 1) submit a PBI Application; or 2) be awarded the PBI? Are there any conflicts offshore wind developers bidding into the PBI solicitation should be aware of, including different terms or conditions they may have (as compared to other PBI solicitation bidders that are not an offshore wind developer)?
RESPONSE: Interested offshore wind developers are not required to create a separate entity to submit an Application, but the developer must show that it is eligible to be a Designated Entity and Transmission Owner under FERC and PJM rules. Offshore wind developers submitting applications will be subject to the same terms and conditions as PBI Applicants that are not offshore wind developers. If the awarded PBI developer is the same entity as an Applicant in the third solicitation, the Board will consider award conditions to help minimize any real or perceived conflicts.
47. Is Sea Girt the mandatory landfall location for all bidders and bid scenarios?
RESPONSE: Yes, see Question #4.
48. Applicant Commitment Form #13 requires that "Under no circumstances will ratepayers be directly or indirectly responsible for any cost overruns associated with the Prebuild Infrastructure, or for costs associated with non-performance by Applicant or the Prebuild Infrastructure." Is NJ BPU able to clarify how this language conforms with the preferred cost containment and rate design frameworks described in Section 4.5 which provide guidance towards recovery, at a lower ROE, of costs incurred between 100-110% and over 110% of the "Firm cap" described?
RESPONSE: Ratepayers will not be directly or indirectly responsible for cost overruns associated with the PBI outside of those permitted under the awarded cost containment approach and rate design framework.
49. Is the NJ BPU Commitment Security described in section 4.10 in addition to the letter of credit required under PJM's DEA?
RESPONSE: Yes, see Question #14.
50. Regarding HVDC cables for all major vendors, can NJ BPU confirm if there is any guidance regarding maximum operating temperature which can be considered for the design?
RESPONSE: No, see Question #22.
51. Is there any specific requirement or NJ BPU guidance, in addition to any jurisdictional authorities, regarding the minimum spacing when crossing an underground utility?
RESPONSE: No, the BPU has no minimum spacing requirement with respect to crossing an underground utility. Applicants must communicate with jurisdictional authorities and existing utilities to determine if they have their own requirements or standards.
52. Does NJ BPU have guidance regarding minimum depth of laying?
RESPONSE: Applicants are responsible for determining depth of laying based on their knowledge, calculations, and field conditions as well as governing standards and Good Utility Practice for underground transmission.
53. Can the BPU confirm that there is no Application Deposit required from Applicants?
RESPONSE: Yes, see Question #19.
54. Could the BPU clarify the distinction between an "alternative route", "alternate corridor" and "scenario"?
RESPONSE: The SGD defines a Corridor as "the cable route from the transmission cable's landfall location on the shoreline to the POI into the regional electric grid." The term "alternative route" does not appear in the SGD, but "alternative route" and "alternative Corridor" have the same meaning. A "scenario" is any separate Project option, which can be different from another scenario because of the Corridor, or because of another differentiating factor between the proposed Projects.
55. Could the BPU provide guidance on how applicants should include narrative in the proposal for any alternative routes and scenarios in the application? Should there be entirely separate applications for each alternative route/alternate corridor/scenario, or should there be a separate section within the proposal to capture the alternative routes/alternate corridor/scenarios?
RESPONSE: Each Application must select one Corridor for description in the Application Narrative. Applicants are encouraged to submit additional Applications for alternative Corridors. If specific content is relevant to multiple sections of the Application Narrative, or to multiple Applications (i.e. multiple cable routes), it does not need to be repeated in each of those sections, but instead should be cross-referenced as needed.
56. Could the BPU clarify that spare conduits are only necessary in the "Duct Banks," which are defined as the concrete structures between the cable vaults? Can you clarify that the spare conduits are not needed in the landfall HDD?
RESPONSE: Spare Conduits are required in the Duct Banks, in accordance with the SGD. Spare Conduits are not required in the landfall HDD.
57. Do all proposed solutions need to include the specified number of spare conduits for the respective circuit, or will alternative duct bank or conduit designs be accepted?
RESPONSE: All designs must conform to the requirements stated in the SGD.
58. Is it a requirement to enable the 525kV design to be downward compatible, or can an applicant offer alternative scenarios?
RESPONSE: Applicant can offer an alternative technology configuration. However, an Applicant nevertheless is also required to propose a technology configuration that is constructible at 525 kV that is downward compatible.
59. Is it permissible for an applicant to propose alternative Expected In Service Dates, including having 2 circuits completed by January 29, 2029 and 2 circuits completed after this date?
RESPONSE: To avoid community disruption and adverse environmental impacts, the Board expects all Circuits to be completed by the Expected In-Service Date.
60. Will the BPU adjust any of the PBI requirements based on the January 24 offshore wind generation awards? For instance, will the Pre-Build Specification requirements to deliver infrastructure associated with two (2) ±320kV Offshore DC System Solutions and two (2) ±525kV Offshore DC System Solutions be adjusted given the New Jersey BPU announcement on January 24, 2024 where the three (3) Projects recommended for New Jersey 2023 OREC solicitation will likely employ ±320kV Offshore DC System and two (2) are at 1,200MW?
RESPONSE: No adjustments to the PBI requirements are planned as a result of the recent selection of the two (2) Qualified Projects selected from the Third Solicitation, Attentive Energy Two and Leading Light Wind.
61. How close do ROWs along two adjacent streets need to be, to be considered within the same corridor?
RESPONSE: The BPU does not have a prescribed overall Corridor width that corresponds to a single vs. split ROW. The preference for a single ROW is intended to minimize community disruption, which will be assessed qualitatively.
62. The SGD requires the Form of Lease Agreement to have a term addressing the "commitment to lease cable conduits to each Qualified Project owner for a nominal cost." Could the BPU please clarify if and how the earnings from such lease payments should be returned to NJ ratepayers (given the Prebuild Developer's return is via FERC regulated rate)?
RESPONSE: The nominal cost of the lease payments by Qualified Projects to the PBI owner will be included in the FERC cost of service. Because the lease cost is prescribed to be nominal, there will be a de minimis impact on ratepayers.
63. Could the BPU confirm PJM has been consulted with and agrees to support FERC regulated rates for this scope of work? Could the BPU confirm the real power delivery requirement to the Larrabee Collector Station for a ±320kV Offshore DC System?
RESPONSE: Yes, PJM has been consulted with and has agreed to support FERC regulated rates for the PBI scope of work.
The PBI must be capable of accommodating four circuits operating at 1,360 MW at 320 kV.
64. Could the BPU confirm the real power delivery requirement to the Larrabee Substation for a ±525kV Offshore DC System?
RESPONSE: The PBI must be capable of accommodating two circuits operating at 1,360 MW at 320 kV and two circuits operating at 1,500 MW at 525 kV.
65. The document states that the circuits must be capable of "at least" 1,360 MW for 320 kV circuits, and 1,500 MW for 525 kV circuits. What if ampacity modeling shows this rating cannot be achieved at a particular part of the circuit (example at the landfall)?
RESPONSE: See Question #6.
66. Will the developer be responsible to install a spare conduit on the water side of the TJB for future use?
RESPONSE: No, spare conduits are not required on the water side.
67. There could be instances of thermal impacts of a circuit affect the rating of one of the adjacent cables. In these cases, should priority be given to maintaining 4 circuits in a single roadway, or maintaining the minimum circuit ratings (1,360MW and 1,500 MW)?
RESPONSE: See Question #7.
68. All thermal resistivity survey samples and soil temperatures will not be obtained in time for the ampacity modeling during the bid process, assumptions for the thermal resistivity will be made all along the route and at the landfalls. Will thermal resistivity and soil temperature assumptions be provided?
RESPONSE: Thermal resistivity and soil temperature assumptions will not be provided. Applicants will need to make their own assumptions for their thermal calculations and include those assumptions in their proposals.
69. Will the maximum operating temperature of the cable be provided?
RESPONSE: No, see Question #22.
70. We'd like to confirm the time period used in IndexM,i as defined in the Inflation Adjustment. With the Expected In-Service Date being Jan '29 for the full scope and Oct '28 for Onshore only, could you please clarify the expected 6-month period used to calculate IndexM,i? Specifically, we note three references to this time period in the Solicitation document:
RESPONSE: See Question #10.
The applicable Expected In-Service Date (and 18 months before the Expected In-Service Date) will depend on whether the Board awards the full scope or the onshore only scope. The Effective date is 18 months before the Expected In-Service Date. IndexM,i will be the average of the values three months prior to and three months after the Effective Date for each commodity.
To clarify a related issue, all cost commitment, schedule commitment, and performance guarantee terms will be enforced for both the Expected In-Service Date - Full Scope date (January 17, 2029) and the Expected In-Service Date - Onshore Only date (October 18, 2028).
71. Please clarify the precise difference between Expected ISD Full Scope and Expected ISD Onshore Only.
RESPONSE: Per the Bidders’ Conference presentation on December 1, 2023, the onshore portion of scope includes the transition vaults. The HDDs are considered part of the submarine portion of the scope.
The Onshore Only and Full Scope bids are required to maintain contingencies. The BPU will award either the Onshore Only scope or the Full Scope. If the Full Scope is awarded, it is possible that, post-award, the Board will change the scope to the Onshore Only scope. The BPU is working with the US Army Core of Engineers (“ACE”), BOEM, and the New Jersey’s Department of Environmental Protection (“DEP”), to assess whether the offshore work would be permittable under the PBI framework. The BPU will look to generation developers, awarded under Solicitations 3 or later, for them to construct – likely as a modification to their OREC award – the offshore portion of the work if permitting issues arise under the Full Scope. Consistent with the foregoing, the Board reserves the right to change the scope from Full Scope to Onshore Only scope post-award and require the awarded PBI developer to construct the awarded PBI project accordingly.
72. Are we correct in our understanding that the awarded PBI developer will be required to provide the as-bid design basis package for their awarded PBI project to Qualified Projects immediately following the Prebuild award in Q3 2024? If not, please confirm the latest date in which the PBI design basis package must be made available to Qualified Projects awarded in NJ3.
RESPONSE: The as-bid design basis package for the awarded PBI project will need to be provided to Qualified Projects within 30 days of the Prebuild awarding Board Decision. If a Qualified Project identifies a reasonable basis as to its need for a particular PBI engineering drawing, the PBI awarded project is expected to share the drawing.
73. Related, what PBI engineering drawings must be made available to Qualified Projects and by when?
RESPONSE: Which drawings and when they need to be shared will be determined between the PBI awarded Project and the Qualified Projects.
74. What are the PBI decommissioning requirements for the PBI developer and for the Qualified Projects using the PBI? Is a there a specific handover time for decommissioning envisioned that should be considered in bids, or will that be determined in the future?
RESPONSE: Decommissioning requirements will be determined in the future and will be in accordance with then-prevailing standards for industry best practices.
75. Will there be Critical Milestones in the PBI developer’s Compliance Filing, and if so, are there specific milestones envisioned? In the NJ3 Solicitation Guidance Document, there were prescribed Critical Milestones for the Prebuild (i.e., receipt of permits and approvals, completion of 50% construction, and completion of construction).
RESPONSE: The performance bond and associated Compliance Filing will only have one milestone, placing the awarded Prebuild project in-service within one (1) year of the Expected In-Service Date.
76. Is the In-Service Date (i.e., Expected ISD Full Scope, Expected ISD Onshore Only) the handover date to the Qualified Projects that will use the PBI, with all inspections complete and certification & engineering documentation for the entire PBI circuit handed over, including any testing reports?
RESPONSE: No, the awarded Prebuild Project in-service date is not the handover date. The awarded Prebuild Project in-service date is when the PBI is completed. The handover date for each Qualified Project will be when the Qualified Projects is ready to occupy the PBI.
77. Within the duct banks, splice vaults, transition vaults, and cable vaults, what are the requirements and responsibilities for the PBI developers for handoffs, accessories, racks, support frames, grounding, drainage, and all other non-conduit and non-duct related items?
RESPONSE: The requirements and responsibilities will be identified in the terms of the Lease Agreements. Good Utility Practice will be the guiding principle for what is assumed to be needed.
78. What are the manhole entry requirements for each cable vault? Should bidders assume that each Qualified Project’s access and O&M requirements for the PBI align with standard “Good Industry Practices”? If not, what is the expectation for access and O&M?
RESPONSE: The requirements and responsibilities will be identified in the terms of the Lease Agreements. Good Utility Practice will be the guiding principle for what is assumed to be needed.
79. What interface requirements are expected between the awarded PBI developer and MAOD for the Prebuild Extension Works?
RESPONSE: The awarded PBI developer will be responsible for constructing the PBI from the Prebuild Point of Demarcation vaults to the Sea Girt NGTC (the full scope extends to the HDD bores under the shoreline interface). The interface between the PBI and the LCS will be coordinated between the PBI developer and MAOD, the LCS developer.
80. Is the PBI developer expected to coordinate or coincide onshore and offshore survey activities near the HDDs with any offshore survey activities being completed by Qualified Projects using the PBI? Will the PBI developer be expected to exchange survey data with the Qualified Projects to account for identification of any MEC or UXO near the PBI?
RESPONSE: The Board encourages the PBI developer and the Qualified Projects to coordinate survey activities and to share survey data to the extent reasonable. Board Staff currently expects that Qualified Projects will specify their HDD location(s) and provide this information to the awarded PBI developer for inclusion in the PBI design.
81. Section 4.3 of the PBI SGD (page 18) states that, “[s]taff may delay the Expected In-Service Date of the Prebuild at its discretion.” Assuming that such delays will have material impacts to Qualified Projects using the PBI, do bidders in their PBI Applications need to propose recourse, or will that be defined by Qualified Projects and the BPU?
RESPONSE: See Question #38. Any such delay would be designed to avoid material impacts to Qualified Projects using the PBI.
82. Please confirm whether this understanding is correct: PBI Applicants must propose terms governing the relationship and interface between parties during the development, construction, and operations phase in their bid through the standard form of lease agreement that they must provide, but final terms are subject to negotiation and mutual agreement between the PBI developer and each Qualified Project that will use the PBI.
RESPONSE: Yes, this understanding is correct.
83. We note that Qualified Projects had proposed terms and conditions governing use of the PBI in their NJ3 Applications. As part of the evaluation, will the evaluation team consider the extent to which a PBI Applicant’s terms align with those of the Qualified Projects that will use the infrastructure? What would happen in the event that one or more terms conflict?
RESPONSE: Yes, Board Staff will consider alignment between proposed terms from a PBI Applicant with respect to those of the Qualified Projects for use of the PBI. Any conflicts between such proposed terms will need to be negotiated between the PBI Applicant and the Qualified Projects.
84. One of FERC’s core ratemaking principles is that a transmission asset must be used and useful and provides electric service before a public utility can commence cost recovery for the asset. The Solicitation Guidance Document, Attachment 4 (Proposed Non-Standard Terms and Conditions) defines the terms “Expected In-Service Date” and the “Initial Operation” to reflect the date on which the Pre-Build project is “capable of accepting electric cables and other infrastructure” from offshore wind generators and “can be placed in service for purposes of operation.” Based on these definitions, it appears that there could be a misalignment of the “Initial Operation” date of the Pre-Build Project and the in-service date(s) of the offshore wind generators. What actions can the NJBPU take or intend to take to minimize the risk of a misalignment of the in-service dates or to avoid too much of a timing mismatch? To the extent that there is such a mis-alignment, how is the cost recovery or the commencement of the cost recovery of the Pre-Build Project affected?
RESPONSE: Board Staff will coordinate with the PBI developer and Qualified Projects to minimize misalignment risk. Further, Board Staff expects that cost recovery at FERC for the PBI may begin before the circuits are installed.
85. Can the NJBPU indicate the proposed first power dates for each of the three approved circuits associated with Attentive Energy Two 1,342MW project and Leading Light Wind 2,400MW project?
RESPONSE: PBI Applicants should look to the information regarding project schedules provided in the Board Orders and the public versions of the Applications. Additional information will be provided following the Board Decision for the PBI award.