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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 May 12, 2023.
Submit questions by email to njoffshorewind@levitan.com with the subject line "NJ OSW 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 March 6, 2023 Order, In the Matter of the Opening of New Jersey's Third Solicitation for Offshore Wind Renewable Energy Certificates (OREC), Docket No. QO22080481; and (ii) the March 6, 2023 Third New Jersey Offshore Wind Solicitation Solicitation Guidance Document Application Submission for Proposed Offshore Wind Facilities ("Solicitation Guidance Document").
1. If the SAA Project is modified to include the Prebuild Infrastructure, when would that be decided?
RESPONSE: If the Board decides that the SAA Project should be expanded to include the Prebuild Infrastructure, bidders will be notified and provided with additional instructions. The timing of this decision is not yet known, but may occur after the Application Submission Deadline.
2. Please define "total funding commitment" on page 14 of the Solicitation Guidance Document ("SGD") which states "Qualified Projects including Tier 1 Investment Commitments shall be required to post an additional Commitment Security in the amount of 100% of the total funding commitment as proposed by the Qualified Project and approved by the Board in the Board Decision."
RESPONSE: "Total funding commitment" is whatever amount that an Applicant proposes to contribute to the development of a Tier 1 supply chain facility.
3. Applicants are permitted to submit one or more Projects that are contingent on the outcome of other offshore wind solicitations. Does "Contingent Project" mean (a) the Project, in its entirety, is contingent on other state solicitations, and thus the Project in its entirety will either move forward or be removed from consideration, or (b) aspects of a Project may be contingent on other state solicitations, i.e., OREC price, Tier 1 investments, etc., and aspects of the Project offering may be contingent/updated per outcomes of other state solicitations?
RESPONSE: "Contingent Project" means a Project in its entirety.
4. 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: Board Staff has not yet made this determination.
5. Would the BPU would award only the Prebuild Infrastructure to an Applicant, or must an award of Prebuild Infrastructure be accompanied by the award of an OSW Project? This question only relates to the scenarios that the BPU awards the Prebuild Infrastructure within the OREC solicitation process.
RESPONSE: The BPU would not award only the Prebuild Infrastructure to an Applicant. The BPU will award the Prebuild infrastructure to an Applicant who also is awarded an OSW Project.
6. Please confirm that any excess revenue generated before, during, or after the OREC term by a Qualified Project can be retained by the Applicant.
RESPONSE: See SGD footnote 38: 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.
7. What is the time period (ex. 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: Excess energy revenues will be determined on an annual basis.
8. Should Applicants include land acquisition costs at the Larrabee Collector Station ("LCS") in their proposals?
RESPONSE: Awarded Qualified Projects will not need to acquire land at/near the LCS for their HVDC converters. Any agreements between a Qualified Project and MOAD for land use should not involve substantial payments or fees, but there may be administrative costs to the arrangement.
9. Can the BPU please clarify whether the OREC Price "offset" of any State or Federal tax credits and other subsidies or grants is strictly limited to the submitted proposal and what was included therein by the Applicants, or would this offset also be applicable to future funding made available via grants, studies, subsidies that were not available at the time of submission? E.g., if a change in law or a ruling would allow the Project to benefit from higher third-party funding than originally anticipated in the original application submission, would this be for the benefit of the Project or expected to be passed on?
RESPONSE: Please refer to 14:8-6.5(a)(5) regarding State and Federal grants, rebates, tax credits, and other programs relating to the offset of the Project cost, and to the item number 8 on the Applicant Commitment Form, Attachment 3 to the SGD.
10. What is required for the pre-bid meetings (content, format, timing, location, etc.) and what is the purpose for the agencies?
RESPONSE: The purpose of these meetings is to allow the Applicant to discuss relevant aspects of their Application with the relevant agency. As stated in SGD Section 2.4, "Instructions for scheduling meetings with each of these parties will be posted to the Solicitation Website."
11. Does the Applicant Commitment Form cover Critical Energy Infrastructure Information ("CEII")?
RESPONSE: As noted in Commitment 13 in Attachment 3 (Applicant Commitment Form): "The Applicant acknowledges that the Board may share confidential information the Applicant provides with other New Jersey agencies, PJM, and federal agencies with jurisdiction over the interconnection and permitting of the Project." Some of that information may be governed by CEII provisions.
12. Is it sufficient to provide the financial statements including the IFRS auditor´s report in a circumstance where an Applicant's parent company publishes its annual financial statements under IFRS and a big four auditor firm provides the relevant auditor´s report confirming the statements "give a true and fair view of the assets, liabilities, and financial position and of its financial performance for the financial year and the accompanying group management report as a whole provides an appropriate view of the company´s position"?
RESPONSE: An Applicant is permitted to provide financial statements as filed in its relevant jurisdictions, including the IFRS auditor's report from a big four auditor. Board Staff reserves the right to ask additional questions that may delve into the financial strength of the parent company or the Project entity if, for whatever reason, Board Staff is not satisfied with information furnished in the financial statement or the auditor's report.
13. 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." Are applicants permitted to include in the Application equipment that is not commercially available today, subject to Applicant also providing the relevant supporting information to the Board?
RESPONSE: Yes.
14. Will draft terms & conditions that could be included in a final Board Order awarding a Project be provided for comment before a Project award?
RESPONSE: If Board Staff determines that it will make a draft of the Terms & Conditions that may be included in a Board Order awarding a Project available to Applicants, the posting of the draft Terms & Conditions will be communicated to all Applicants through the Solicitation Website. Please note, Board Staff is not guaranteeing that a draft will be provided.
15. Does the BPU expect to include a "Floor Price" provision in the Additional Terms & Conditions for awarded ORECs?
RESPONSE: Board Staff cannot commit to whether any specific terms or conditions may or may not be included in a final Board Order awarding one or more Project(s). That decision rests solely with the Board and may not be confirmed before any award and resulting Board Order.
16. 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. Or, otherwise, how might applicants using "innovative technology" comply with the SGD requirements?
RESPONSE: Applicants proposing use of innovative technology would not be exempt from providing relevant specifications. Applicants proposing innovative technology are required to include all relevant information to allow Board Staff to thoroughly evaluate the proposed innovative technology. Board Staff recognizes that the level of supporting technical detail for innovative technology may be less than for conventional technology. However, the Applicant's submittal should still be sufficiently detailed to establish proof-of-concept and OEM timing expectations.
17. Regarding Section 3.2 of the SGD "1) A declaration from the undersea cable manufacturer/ supplier that states its ability to manufacture and deliver all undersea cable components within the targeted schedule (N.J.A.C. 14:8-6.5(a)(2)); and 2) 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 (N.J.A.C. 14:8-6.5(a)(2))." It may be premature to require commitments to particular suppliers given that Applicant's Projects are at varying stages of development and early commitments may disadvantage new entrants (both Applicants and potential suppliers). Can BPU please clarify intent/rationale for this requirement?
RESPONSE: The timing of such commitments rests solely with the Applicant. The Board's intent is to ensure that Applicants are aware of the information Board Staff will consider in its determination of the likelihood of a Project's commercial success and that Applicants are aware of the information Board Staff requires to perform this evaluation.
18. The SGD states that "the feasibility study used to determine the construction costs included in the cost accounting" must be included as an attachment (SGD Section 3.4 - Page 23). Can the BPU please clarify its expectations for this feasibility study? Can the BPU clarify whether Applicants need an external consultant to complete the study or only to conduct a review and verification of applicant's data?
RESPONSE: Board Staff does not require that Applicants retain an external consultant to complete the feasibility study. Board Staff will look favorably on a feasibility study that includes the requisite rigor to enable Board Staff's evaluation, whether or not a consultant or the applicant prepares the study.
19. Can the BPU please clarify its rationale for requiring Applicants to propose detailed legal structures to govern Prebuild relationships? We note that under current Prebuild Infrastructure Requirements, it is difficult for applicants to assess the associated risks and costs if the general terms of the final agreement are unknown (e.g., how do Applicants assess a potential delay risk or prioritization? What if our schedule will not work with the selected Prebuild Infrastructure timing and terms? Would we be able to reprice in that case?).
RESPONSE: Board Staff encourages Applicants to propose legal structures governing Prebuild relationships in whatever level of detail Applicants wish to propose in their Applications. Board Staff will review all suggested Prebuild relationships in order to clarify relevant terms and conditions to be included in the Board Order.
20. Should the detailed legal structures to govern Prebuild relationships be written from the perspective of the Prebuild Infrastructure awardee/developer or another awarded Qualified Offshore Wind Project utilizing the Prebuild Infrastructure?
RESPONSE: Both perspectives should be provided.
21. Can the Board please advise on the process for the selected Prebuild Infrastructure developer to make necessary modifications to its proposed Prebuild Infrastructure design?
RESPONSE: Any subsequent changes to the Prebuild Infrastructure recommended by the Prebuild developer will require Board review and approval. The Board retains the right to specify the applicable terms and conditions regarding potential changes in the Board Order awarding the Prebuild.
22. Will there be a mechanism to modify the proposed cost for the Prebuild Infrastructure in the event that the submitted design needs to be adapted to the actual technical specifications of the other Awarded Projects?
RESPONSE: No. The Prebuild awardee will need to make explicit assumptions in its Prebuild Infrastructure portion of its proposed Project design regarding the technical configuration to accommodate other Projects utilizing the Prebuild Infrastructure.
23. How will the Prebuild Infrastructure legal structure be implemented?
RESPONSE: The Prebuild legal structure(s) will be implemented through terms and conditions in the Board Order awarding the Qualified Project(s). These terms may be subsequently reflected in definitive agreements between the Prebuild developer and subsequent users. These terms and conditions, if appropriate, may subsequently be reflected in PJM's Open Access Transmission Tariff, and, if applicable, FERC decisions.
24. Will the BPU facilitate the negotiation of terms and conditions between the Prebuild developer and any other Qualified Projects utilizing the Prebuild Infrastructure? Would the Prebuild Developer establish these terms and conditions?
RESPONSE: Any terms and conditions regarding the Prebuild Infrastructure, if selected through this solicitation, and any other Qualified Offshore Wind projects utilizing the Prebuild Infrastructure, will be set forth in the Board Order awarding the Qualified Project(s) and therefore established by the BPU. Board Staff does not expect any negotiations to occur.
25. Will the LCS's configuration change (currently, 1,200 MW, 1,200 MW and 1,342 MW circuits)? Will the BPU allow for the utilization of multiple circuit or different size mapping? Will the BPU consider increasing the minimum capacity of each circuit?
RESPONSE: Board Staff has determined that there will be no modification to the configuration of LCS; accordingly, the circuits of the LCS will not change. There are no plans to alter the design of the LCS where all circuits would be intertied.
Projects may propose to utilize multiple circuits at the LCS, or even different capacity sizes than the current for which the configuration allows. However, any costs associated with changes to the configuration would be the responsibility of the Applicant, subject to any approved Transmission System Upgrade Costs ("TSUC") cost sharing. Applicants may also submit a proposed Project with greater capacity, but will be responsible for the TSUCs for any incremental capacity above the SAA Capability through the PJM interconnection process. Please see SGD, Section 3.13 for more information.
26. Section 3.18 of the SGD requires pricing terms for the Prebuild Infrastructure: first-year OREC price, escalation rate, and cost recovery period. Can the BPU please provide more details on "cost recovery period" and its implications?
RESPONSE: The cost recovery period is the period of time Applicants propose to recover the cost of the Prebuild Infrastructure. The cost recovery period may not exceed 20 years. Applicants are able to propose shorter cost recovery periods, provided these shorter periods produce ratepayer benefits. Applicants are therefore encouraged to provide information in their Application that addresses the anticipated ratepayer benefits related to a shorter cost recovery period. Board Staff will look favorably on a cost recovery period that yields ratepayer benefits in its evaluation of price and non-price factors.
27. Can Applicants propose the use of gravity based cofferdam, also known as gravity cell, during the Prebuild Infrastructure construction phase?
RESPONSE: Applicants should provide reasoning for why they are choosing the methods they propose and discuss the anticipated impacts which will result.
28. Regarding SGD requirement for an Offshore Transmission Network ("OTN"), "The OTN Ready platform space cannot be located on a separate platform" (Attachment 11 - Page A11-2), if a parent/child platform configuration is proposed for the OTN Ready space, is that disqualifying? In this scenario, the OTN Ready platform would not be "stand-alone," but rather would be wholly dependent on the parent Offshore Platform ("OSP") for operation. Further, benefits of a separate platform for OTN Ready space including substantial offshore equipment installation savings, reducing stranded investment risk in the event BPU does not implement OTN, reduced O&M complexity by segregating from the OPS, and greater future expandability as the OTN is built out.
RESPONSE: The OTN space should be on the same platform as the HVDC converter, not on a separate platform. Future OTN implementation should only require in-water activities for installing inter-platform cabling; no new in-water activity should be required regarding installation of switchgear, controls, and cable terminations.
29. Can the BPU confirm that it would accept OTN components being housed on a secondary platform that is physically connected to the primary OSP via an interconnecting structure to minimize construction disruption and provide additional OTN design flexibility?
RESPONSE: No, a second platform would not be acceptable. OTN components should be on the same platform as the HVDC converter.
30. "In the future, Qualified Projects may need to install AC equipment to facilitate at least two (2) connections to other offshore wind OSPs" (Attachment 11, Offshore Transmission Network Preparation Requirements, Page 2). Can BPU please clarify at what point "in the future" should a Qualified Project expect to be required to implement the OTN equipment? Is it envisioned that greater than "at least two (2) connections" will be required to an OTN Ready platform?
RESPONSE: There is no current timeline for implementation of the OTN.
31. Can the BPU confirm that only 80% of the balance of the Qualified Project Commitment Security would need to be posted if Critical Milestone 1 was achieved within 3 years of the anniversary date of the Board Decision?
RESPONSE: See SGD, Section 2.6,Pages 13-14, where Critical Milestones are defined.
32. Can the BPU confirm an Awarded Project with a Tier 1 Investment would not be expected to continue to post Commitment Securities in the event an associated Tier 1 OEM walks away prior to Critical Milestone 1 or 2?
RESPONSE: The treatment of Commitment Security for Qualified Projects is addressed in SGD, Section 2.6, Pages 14-15. Commitment Security can only be terminated upon Board approval. Any funds so forfeited will either be committed to development of OSW infrastructure, including, but not limited to, as appropriate, Prebuild Infrastructure and Tier 1 infrastructure, in New Jersey, or returned to ratepayers at the discretion of the Board.
33. Can the BPU confirm that Awarded Projects will not be held financially responsible for generation during negative LMP hours at the injection node?
RESPONSE: Yes, that is correct. Qualified Projects will not be responsible for any negative LMP hours at the injection node during the OREC term.
34. Will the BPU offer a remediation payment structure for the hours that LCS would be impacted by transmission congestion that results in curtailment of Awarded Projects' generation?
RESPONSE: Board Staff does not intend to indemnify or otherwise hold a Qualified Project "harmless" for potential curtailments at the LCS over the OREC term. Any curtailment risk is to be borne by the Applicant.
35. Can the BPU confirm that it would consider a corporate guarantee at the Project level as an acceptable form of Commitment Security?
RESPONSE: Yes, a corporate guarantee at the Project level would constitute an acceptable form of Commitment Security, provided the threshold requirements set forth on SGD, Section 2.6, Page 15 are met.
36. Can the BPU confirm that a remuneration mechanism that does not rely on generation (i.e. OREC sales) will be available for the Awarded Project in the unlikely event that it delivers the Prebuild Infrastructure but is unable to deliver the wind farm?
RESPONSE: The remuneration mechanism covering all costs associated with the Prebuild Infrastructure will be based on the Qualified Project's delivery of ORECs.
37. Can the BPU confirm that the "Fixed first year price" referenced in SGD, Section 1.2 means ORECBase?
RESPONSE: Yes, the "Fixed first year price" means ORECBase.
38. Can the BPU clarify why the milestone selected for inflation adjustment to the OREC Price is the BOEM's approval of the COP? Did the BPU alternatively consider using Final Investment Decision (FID) /Notice to Proceed (NTP) or Commercial Operation Date (COD) and if so, why were they discarded? A true-up at COP approval presents two unintended consequences that will impact OREC price attractiveness: a. It unfairly penalizes projects that are already quite advanced in their permitting process, and hence demonstrate clear deliverability, less risk to the ratepayer, as well as an earlier COD. Indeed, projects with earlier COP approval have a shorter period 'covered' by the inflation adjustment vs. projects with a longer permitting timeline, and will therefore benefit less from the adjustment, to be reflected in their OREC price offer. b. It creates high exposure between COP approval and FID. FID is the standard milestone for major capital projects freezing of capital costs, usually several months following permitting completion, financial close, main supply contracts execution, interconnection agreement execution, etc. A Project would therefore be exposed to indices variations between COP approval and FID that may stretch its business case so far that it becomes undeliverable. Applicants are likely to factor this as a risk premium in the OREC price offer, with this premium not recoverable by the ratepayer in case of index reduction.
RESPONSE: Board Staff considered an array of options to support its selection of BOEM's approval of the COP as the critical milestone triggering the timing of the inflation adjustment. The reasonableness of alternative milestones was considered before Board Staff finalized the mechanics of the inflation adjustment factor.
39. Could the BPU elaborate on how the +/-15% cap to the inflation adjustment was defined? Considering that over the past 2 years, commodities have fluctuated well above this value, did the NJBPU consider setting a variable cap, following the market (e.g., average of annual maximum price of the index for the period) to strengthen the proposed mechanism, further reduce risk and foster more competitive pricing? If not, could the NJBPU consider this change to the Final SGD?
RESPONSE: Board Staff will not consider any further adjustments to the 15% collar when performing its evaluation of Projects.
40. Can the BPU clarify the rationale for the choice of indexes of the inflation adjustment mechanism and clarify (1) why they do not include indices specific to OSW such as copper and aluminum, and (2) why they are only available as actual indices and not as forecasts? Would the BPU reconsider these indices to more closely match the ones used by the OSW supply chain, which include forecasts?
RESPONSE: No. Board Staff will not reconsider the structure, components, or weightings set forth in the SGD.
41. Can the BPU clarify if the same inflation adjustment mechanism and indices used for the OSW project will be used for the Prebuild infrastructure portion of the OREC? If yes, can the BPU address why other indices more closely linked to the Prebuild Infrastructure scope were not considered (e.g. Civil work, HDPE & concrete)? Would the BPU be open to revise this?
RESPONSE: The same inflation adjustment mechanism will apply to the Prebuild Infrastructure portion of the Project as is applied to the generation assets portion of the Project.
42. Please clarify what is the timing of the OREC return to a PBI winning bidder, who does not energize their offshore wind farm years after the PBI is completed?
RESPONSE: The Prebuild Infrastructure is a component of the total delivered OREC. Hence, the timing of the OREC return to a PBI winning bidder would be in alignment with the delivered ORECs from the generation assets portion of the Project. There is no mechanism to accelerate the realization of the return on Prebuild Infrastructure if, for whatever reason, there is a delay in the commercialization of the generation assets portion of the Project.
43. Can the BPU confirm that an OREC award will be contingent on a Board-approved Compliance Filing and posting of Performance Guarantee securities? This is a standard observed in other states with full offtake agreements with securities, ensuring compliance between the terms of the bid proposed and selected, and the Compliance Filing.
RESPONSE: Any Qualified Project award will require the Applicant to meet the Performance Guarantee requirements, including the financial commitment requirements, set forth in SGD, Section 2.6.
44. The addition of Performance Guarantees essentially brings NJ's approach to ORECs, i.e., irrevocable Board Orders, closer to a full power purchase/OREC offtake agreement utilized by other states. However, such agreements are generally negotiated with developers ahead of execution. Considering this, will the Board entertain incorporating a 180-day period, following the issuance of an Order approving a Project, whereby Board Staff and the selected developer can negotiate in good faith regarding any corrections of manifest error, or clarifications to the OREC Order requested by the selected developer, without the need for the selected developer to file a petition? This approach will facilitate a more efficient process by avoiding the potential need for the selected developer to submit petitions requesting clarifications to the order over time (or limit the number of petitions required to be filed).
RESPONSE: Selected Qualified Project awardee(s) will be bound by the terms and conditions set forth in the Board Order regarding such award, unless later modified. Insofar as the awardee(s) experiencing impairment requiring significant modification or corrections of manifest error, any remedy will require the awardee to file a petition for Board consideration.
45. Can the BPU clarify that, if multiple Projects submitted by different Applicants are approved, the Board intends to issue discrete approving Orders, for each approved Project?
RESPONSE: Yes, if the Board grants more than one award, each award will have a discrete approving Board Order.
46. With regards to the requirement in Section 3.1 of the SGD that "The Applicant shall disclose, in detail, any prior business bankruptcies, defaults, disbarments, investigations, indictments, or other actions against either the Applicant, its parent company, affiliates, subsidiaries, or any key employees identified above (N.J.A.C. 14:8-6.5(a)(1)(iv))," the BPU should allow this requirement to be satisfied by submittal of Annual Reports and/or consolidated financial statements of parent companies, which may disclose certain of such information, together with a statement from the Applicant, if applicable, and supporting documentation that, to the Applicant's knowledge, none of the Applicant, its direct parent company, direct affiliates, direct subsidiaries, or any key employees have any prior business bankruptcies, disbarments, investigations, or indictments, nor are there any pending litigations or other actions against such persons or entities relating to defaults or otherwise. Otherwise, this question becomes disproportionately administratively burdensome for companies with varying levels of interest in numerous "affiliates," and bankrupt remote project companies, which have no bearing on the resources of the Applicant project company or direct up stream members. We note that this approach was utilized in connection with the Rd2 Solicitation.
RESPONSE: Board Staff is willing to rely principally on the provision of consolidated financial statement of a Project company's parent companies, provided a senior, authorized officer of the company attests to the veracity of such information, and provided further that any parent company knowledge about pending or actual defaults, bankruptcies, financial reorganizations or restructurings, and the like be brought to Board Staff's attention immediately. Board Staff reserves the right to ask additional questions oriented around affiliate performance.
47. 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 engineered procurement, and construction ("EPC") contractor, balance of plant ("BOP") contractor, and/or key construction contractors or vendors." Since the OSW 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, the BPU should clarify it will deem acceptable to receive a letter of intent from the key contractors identified.
RESPONSE: Board Staff will deem acceptable the receipt of LOIs and/or MOUs from the key contractors identified in an Applicant's Application.
48. Can the BPU clarify that for audited financial statements, a web-based link can be utilized, rather than uploading a PDF file, as long as the linked files are searchable PDFs?
RESPONSE: Yes, as long as links are provided to the specific documents (rather than a link to an investor information page, for example), web-based links are acceptable.
49. Section 3.2 of the SGD states that Applicants must "Account for, to the fullest extent possible, the coincidence between time of generation for the Project and peak electricity demand." The BPU should clarify what is meant by "account for the coincidence" of generation. Would an overlay of production and demand estimates be sufficient to address this requirement?
RESPONSE: An overlay of the Project's expected production and delivery stated at the P50 confidence level in relation to seasonal peak electricity demand in New Jersey will meet the information requirement.
50. Section 3.2 of the SGD states that Applicants must "Provide an estimate, with support, of the amount of energy that will be generated over the term of the life of the turbines." The BPU should confirm whether this estimate should be based on the Applicant's view of (1) the operating life of the turbines (including OREC and post-OREC term) or (2) the duration of the OREC term.
RESPONSE: Applicants should provide an estimate of the generated energy over the 20-year OREC term. To the extent Applicant's turbines will continue to operate after the OREC term, the expected depreciation range and an estimate of expected annual generation for that remaining asset depreciation range should be provided.
51. The twenty-year OREC term for a Project or applicable phase commences on COD for such Project or applicable phase. See Draft SGD FN 105 and N.J.A.C. 14:8-6.1 (definition of Offshore wind facility qualification life). COD, per N.J.A.C. 14:8-6.1, is defined as "the date upon which a qualified OSW project, or a phase of a qualified OSW facility, which is interconnected to the transmission system in New Jersey, begins to generate power for which it is eligible to receive ORECs". However, as part of the Round 2 Q&A, BPU Staff clarified that "COD may be declared once at least 90% of the wind turbines in a phase are commissioned and generating power." See the response to Question 28. For purposes of consistency, the Final SGD [for the Third Solicitation] should likewise clarify that "COD may be declared once at least 90% of the wind turbines in a phase are commissioned and generating power". The Final SGD should also expressly waive any provisions of the OWEDA Regulations, including, without limitation, the definition of COD set forth therein at N.J.A.C. 14:8-6.1, that could be construed to be inconsistent with COD occurring once at least 90% of the wind turbines are commissioned and generating power.
RESPONSE: COD may be declared once at least 90% of the wind turbines in a phase are commissioned and generating power. Board Staff does not anticipate waiver of any provisions under its rules.
52. We fully acknowledge that the ratepayer should benefit from "The value of electric energy, capacity payments, and, if applicable, ancillary services, as well as any other environmental attributes or other benefits, should they arise over the OREC term", as well as "Such other benefits [which] include, but are not limited to, tax credits, subsidies, grants, or other funding not previously identified in the Application and not included in the calculation of the OREC price submitted to the Board". As previously raised to BPU Staff, there is an inherent cost to seeking and realizing qualification for such benefits, as well as multiple considerations to the value of securing such benefits (e.g., meeting certain requirements to qualify may incur additional capital or operational expenditure that renders the operation net negative to the project). As such, we respectfully raise to the BPU that (1) such benefits should only be pursued if they provide a net benefit to the Project, and (2) the Project pass along the net benefit to the ratepayer, minus applicable qualification costs.
RESPONSE: Applicants are required to credit to ratepayers all Project revenues derived from the sale of energy, capacity and ancillary services through wholesale markets administered by PJM. As discussed in SGD, Section 3.7, Applicants are also required to credit ratepayers any revenues associated with the sale of environmental attributes above OREC sales to NJ EDCs. Applicants are required to make efforts to maximize these revenues over the OREC term. Board Staff is in opposition to a revenue crediting plan the passes along only net benefits to the ratepayer.
53. The BPU should clarify what is meant by "resource monitoring" in [SGD,] Section 3.12 and what level of detail is expected to fulfill this criterion.
RESPONSE: Resource monitoring in this context refers to the monitoring of the marine resources and environmental resources that must be conducted as part of Project development in order to determine the potential impact of the proposed Project.
54. Section 3.15 of the SGD states that Applicants must "Address the length of equipment downtime and timing of repair and replacement for the mitigation measures associated with potential risks, including, but not limited to, hurricanes, lightning, fog, rogue wave occurrences and exposed cabling." The length of equipment downtime and timing of repairs will depend on the magnitude of the risk event and damage incurred. Can the BPU clarify if the purpose of this requirement is to provide general commentary regarding repair plans for risk events? It is unclear whether applicants are meant to address separately "the mitigation measures associated with potential risks."
RESPONSE: Yes. Applicants are encouraged to address the mitigation measures envisioned to minimize downtime when risks are encountered.
55. Section 3.2 of the SGD states that Applicants must provide "A detailed description of the types of condition monitoring technology the applicant is going to use and the assigned probability of failures relating to certain potential risks." Can the BPU clarify how the "certain potential risks" are defined?
RESPONSE: Applicants should identify potential operating risks that may give rise to unavailability or unreliability associated with the monitoring technology that Applicant proposes to install within the Project.
56. The BPU should provide guidance on how the selection of the Prebuild Infrastructure will be evaluated (criteria and their weight).
RESPONSE: Evaluation of the Prebuild Infrastructure will be subject to all price and non-price factors identified in the SGD. A 30% weighting covers non-price factors for each Project, including Prebuild Infrastructure. A 70% weighting covers price factors, including the incremental cost of the Prebuild Infrastructure on the OREC Purchase Price, which is to be stated separate from the generation assets portion of the Project, to assist Board Staff in its evaluation.
57. The BPU should elaborate on how economic impacts, strength of guarantees of economic impacts, environment and fisheries impacts build up the 30% non-price criteria.
RESPONSE: The components or relative weightings of the 30% non-price criteria have not been included in the SGD and will not be disclosed to Applicants.
58. The evaluation criteria put forth in the Final SGD do not include 'likelihood of successful commercial operation' as in the Rd2 solicitation. Instead, the BPU's consideration of likelihood of commercial operation will be used "to determine whether a Project is eligible to become a Qualified Project, but will not be include in quantitative scoring." Given the fact that the benefits forecasted to result from development of OSW projects, and development of the OSW industry in New Jersey, are only realized if a Project is approved and executed, can the BPU consider including BPU the likelihood of commercial operation as an evaluation metric?
RESPONSE: The likelihood of successful commercial operation is a prerequisite for eligibility and is not an explicit component of the evaluation metric used to assign price and non-price points.
59. The BPU should clarify what scope of work and schedule the Prebuild Infrastructure winner should anticipate for the transition vault/cofferdam for the future circuits. For example, will the Prebuild Infrastructure developer be required to keep the transition vault/cofferdam in place until the future OSW project is prepared for export cable installation? Or should the vault/cofferdam be removed once the landfall drill is complete?
RESPONSE: The Prebuild Infrastructure developer should leave underwater HDD exits ready for easy access by future OSW projects for their cable installations. This may entail leaving certain structures in place to provide for this future access. On the land side of the shoreline interface, transition vaults should be installed for all 4 circuits with Prebuild construction.
60. Please confirm that the design for the 230kV AC yard is a breaker and a half scheme with open breakers. Note that this question pertains to the maximum current carrying capacity of the 230kV yard, and with the SAA capability limits, we do not foresee a tie between the different capacities. Please confirm whether this interpretation is correct.
RESPONSE: This interpretation is correct. Normal expected operations is for the breakers to be open.
61. Please confirm that the breakers in the 230kV yard are being designed to a 4000A Max Current Carrying Capacity limit. Please advise if MAOD is considering 500kV design solutions at the AC side of this yard.
RESPONSE: The breaker and a half equipment will be operated at 230kV and the circuit breakers will be rated at 4000A consistent with the October 26, 2022 BPU SAA Board Order ("SAA Order").
62. Can BPU please provide additional details on location of and configuration of LCS. How long is the expected AC cable run from the converter location to LCS? Should AC conduit be included in cost estimate? How can a developer specify a route into HVDC termination without the location of the converter stations?
RESPONSE: All the specifics Board Staff can provide at this time relating to the location and configuration of the LCS are in the SAA Order and in the SGD.
The proposed OREC price should include to Point of Demarcation for the Prebuild Infrastructure. The route to the HVDC interface within the parcel may be addressed with true-up mechanism described in the SGD.
At this time, Board Staff cannot provide the exact AC cable length from the converter station to the LCS.
63. Can the BPU confirm that MAOD will cover all costs associated with land acquisition, site preparation, and permitting at the sites for the onshore HVDC converter stations?
RESPONSE: MAOD is responsible for the land acquisition, site preparation (tree clearing, clearing and grading with native soil, seeding, temporary fencing), and access roads.
See the response to Question 8.
64. The BPU should provide the required in-service date for each system upgrade and project under the SAA including the AC switchyard. The Final SGD should indicate (1) availability of back-feed (allowing for commissioning of the HVDC electrical equipment); (2) when the Project can assume it can inject to the grid to start turbine commissioning and the maximum generation at the time; and (3) if applicable, when the full injection capacity is available for generation. Such clarity would be needed to demonstrate deliverability, develop a project schedule, and properly price an OSW project. This information should be provided for each of the 3 circuits included in the SAA, which differentiated backfeed dates were presented at the Bidder's Conference.
RESPONSE: See SGD, Section 3.13, Page 38.
65. The BPU should clarify the Capacity Interconnection Rights eligibility timeline requirements and implications.
RESPONSE: See SGD, Section 3.13, Page 38.
66. Can Sea Girt NGTC representatives please identify any geographic areas of concern within the NGTC property that may be considered problematic or "no-go" zones?
RESPONSE: Concern (environmental, training ranges, cultural, natural, known existing infrastructure and future project areas) are identified on several of the slides the New Jersey Department of Military and Veterans Affairs ("NJDMAVA") presented at the March 24, 2023 Bidders' Conference/Technical Conference for all prospective Applicants (to see the Technical Conference presentation, visit the Announcements page on the Third Solicitation website). NJDMAVA has additional information with regard to areas of concern that can be made available via FTP upon request from NJDMAVA. Details on how to request that additional information was presented at the Bidders' Conference and is documented on the DMAVA Bidders' Conference slide deck. Specifically, with regard to areas of concern in NJDMAVA's FTP package there is a file named "2019"-08-21_PI000682_PAR_Sea GirtNGTC.pdf" that would be helpful to bidders. To access this document package, send a request to:
67. Can Sea Girt NGTC representatives please identify training periods or times of "no constructions activity" that could restrict developers from performing Prebuild-related construction activities along the NGTC property line?
RESPONSE: Construction activities that impact threatened and endangered species located on the site cannot occur from early spring to late summer (March - September). Additional information regarding the threatened and endangered species is located in the file package, specifically in the file named "Sea Girt INRMP 2019". Construction activities proposed that impact training areas, to include but not limited to firing ranges, will be supported to the greatest extent possible and will not unreasonably be withheld but will require advance (at least three months in advance) planning and coordination with the Training Site Superintendent or appointed designee to allow sufficient lead time for using agencies to secure alternative sites to conduct their training.
68. Are there any special requirements for accessing the Sea Girt NGTC?
RESPONSE: U.S. citizenship is not required, but those entering the Sea Girt NGTC grounds must comply with all state and federal laws. Please coordinate with Sea Girt NGTC for more information for visiting the property (people will need to be cleared for visit, prior to arrival).
69. Are there any PPE requirements for visiting the Sea Girt NGTC?
RESPONSE: Regarding personal protective equipment, while safety toed shoes are not required, please take appropriate precautions to come dressed to walk the property which may be sandy, rocky, and unstable (will be walking in dunes). Please coordinate with Sea Girt NGTC for more information for visiting the property.
70. What is the thinking behind the need for cofferdams? Would they need to be permanent (i.e. like a concrete vault) or temporary?
RESPONSE: Applicants should provide reasoning for why they are choosing the methods they propose.
71. Will shapefiles/kmzs be available for the figures in addition to the pdfs?
RESPONSE: Please make that request to NJDMAVA directly.
72. When will the studies reference by NJDMAVA at the March 24, 2023 Bidders' Conference be available?
RESPONSE: Studies are available, and the package is compiled. Any interested Applicant must email Jill Priar (Jill.Priar@dmava.nj.gov) and Steven Hoffman (Steven.Hoffman@dmava.nj.gov) to request the package. Applicants will then be sent the package via FTP.
73. Have the NJ DEP, USACE been consulted when the Sea Girt NGTC landfall was picked? Curious how they think about the constraints on the marine side.
RESPONSE: Yes.
74. To what extent has the BPU engaged with the Sea Girt NGTC and discussed any potential concerns the facility may have about the siting of multiple transmission lines through the facility?
RESPONSE: Board Staff has coordinated closely with the Sea Girt NGTC.
75. Are there any supplemental drawings, studies, or analyses that could be provided to bidders to increase the understanding of existing conditions at the Sea Girt NGTC site?
RESPONSE: Yes. Please make that request to NJDMAVA directly.
76. For modeling purposes, should Applicants treat the LCS as a POI or should studies be run against a specified circuit, e.g. Larrabee/Atlantic/Smithburg?
RESPONSE: Unless proposing an alternative POI in accordance with Section 3.13 of the SGD, the LCS should be used as the POI. However, as noted in the SGD, specification of which LCS circuit (1,200 MW Larrabee 230 kV, 1,200 MW Atlantic 230 kV, or 1,342 MW Smithburg 500 kV) the Project proposes to utilize should be made. The Board will assign which specific circuit at the LCS the Project will utilize in any Board Order awarding a Project.
77. What is the intended use of "anticipated market prices over the anticipated life of the Project, including a forecast of electricity revenues from the sale of energy derived from the Project and capacity." (SGD Section 3.18 - Page 47.) Are these submitted forecasts utilized for evaluation?
RESPONSE: Board Staff will derive the Levelized Net OREC Price (LNOC), which credits to the OREC offer price the expected value of all wholesale products administered by PJM. Board Staff requests that Applicants provide a forecast of the value of all wholesale market products, which will be reviewed in relation to other information available to Board Staff. Board Staff reserves the right to use the submitted forecasts, or its own forecast, in its quantification of LNOC. This decision will be applied equally to all applications.
78. What curtailment expectation should be incorporated into the following required data submission: 3.18 - Project's "expected energy output" and "Net yearly energy output for the Project, accounting for losses"; and 3.4 - Project's "expected (P50) output"; and from Application Form "12x24 Profile of Expected Generation..." and "Delivered Energy..."?
RESPONSE: Information on energy deliverability is available when the system impact study of a given Project is completed by PJM. Applicants are expected to make their own expectations of curtailment based on their own studies or on information provided by PJM in the event that the Project has a PJM system impact study.
79. Can BPU Staff please provide more details on the following language in the SGD: "The evaluation of OREC Purchase Prices will be based on the non-inflation adjusted levelized price per MWh. The quantitative impact of the total award capacity on the level of Ratepayer Impacts will be considered in the selection of qualified Projects." How will it be considered? (Will ratepayer impacts be based on the PVNOC and the NJ EDC retail load, as in the 2021 Solicitation Evaluation Report? Is PVNOC ranked and scored separately and in addition to the LNOC?)
RESPONSE: Board Staff will evaluate PVNOC and LNOCs in performing a standardized comparison among all Applicants. To promote standardization, Board Staff derives LNOCs, which equal the Project's OREC purchase price adjusted for the TSUCPA, if applicable, and the value of capacity, energy, and RECs. Ratepayer impacts are based on PVNOCs and NJ EDC retail load aggregated among four EDCs for residential, commercial, and industrial customers based on recent New Jersey load data. The retail rate impact is stated in 2023 dollars.
80. If the Prebuild Infrastructure does not meet its awarded design specifications, would the BPU allow other users of the Prebuild Infrastructure (not the Prebuild Infrastructure developer) to renegotiate their awarded OREC price to accommodate this circumstance? For instance should the Board go forward with a single-trench four circuit arrangement that results in curtailed output due to conductor heating, will awardees be able to adjust their price to account for reduced lifetime production?
RESPONSE: The Prebuild owner will be responsible for constructing Prebuild Infrastructure facilities to accommodate four (4) individual HVDC circuits capable of 1,500 MW each. Penalties and adjustments for future de-rates if they, should occur, will be addressed in the applicable terms and conditions for Prebuild Infrastructure facilities and future solicitations to be defined in the Board Order awarding the Project. The awardee will not be permitted to negotiate terms and conditions or to adjust their price to account for reduced lifetime production. However, the awardee may petition the Board for approval to make changes to the awarded Project, including the Prebuild Infrastructure.
81. Can BPU please clarify whether the "Project size" should be defined as capacity injected at LCS or offshore nameplate capacity?
RESPONSE: Projects should indicate both-capacity injected at the LCS and nameplate capacity, if the two are different.
SGD Section 2.4 requires that, "Applicants must submit at least one Project that will utilize only 1,200 MW of SAA Capability." This means applicants must submit at least one Project with a Maximum Facility Output of 1,200 MW, as sought in the Project's intended PJM New Services Queue interconnection request.
With respect to any proposed Project, the Applicant must propose an OREC price and schedule. The OREC pricing proposal shall specify the nameplate capacity, expected energy output, and assumed capacity factor for the proposed Project, along with the number of ORECs. Projects should indicate both the capacity injected at the LCS and offshore nameplate capacity. Capacity injected at the LCS will be considered as using SAA Capability of the same MW value.
82. Can the BPU confirm that the Awarded Project is expected to operate and maintain the Prebuild Infrastructure under the terms of the Board Order for the duration of the OREC Term, only, and retains full ownership of the Prebuild Infrastructure post-OREC Term?
RESPONSE: The Prebuild Infrastructure owner will retain ownership of the Prebuild Infrastructure post-OREC Term, subject to all terms and conditions set forth in the Board Order, and any other terms and conditions that may be in place at the end of the Offshore Wind Facility Qualification Life, as defined in N.J.A.C. 14:8-6.1.
83. Can the NJBPU clarify how it will address delays in the LCS backfeed availability which may have cascading effects and lead to delays in the Project approved COD and/or delays in the performance guarantee milestones?
RESPONSE: Construction of the LCS is being handled as any other PJM RTEP project. The risk of schedule delays for these Projects is borne by the generator. Projects may petition the Board to consider reasonable delays.
84. Please clarify what decommissioning scope, cost, and timing should be assumed for the PBI as each circuit in the PBI will have different contract length terms. In addition, please clarify what the operational length should be assumed for the PBI.
RESPONSE: Applicants should submit a general outline of the decommissioning scope, cost, and timing assumed for the PBI. Board Staff does not intend to provide Applicants with guidance on decommissioning scope objectives and approach.
85. Please provide input on how scores will be assigned with regards to the 70% price criterion (e.g., if the most competitive Project gets 70 points, how will other Projects rank relatively?).
RESPONSE: The formula governing the assignment of points is not included in the SGD and will not be shared with Applicants.
86. Please clarify how Energy Storage is scored within the non-price criteria. Is there a bonus in scoring for advancing the New Jersey energy storage capabilities towards its targets?
RESPONSE: Energy storage submission requirements are addressed in Section 3.2 of the SGD, pages 19 -20. Applicants that submit Projects that include energy storage must address how total expected benefits are equal to or greater than the cost of the storage system. The cost of the storage project will be incorporated in the price analysis. The benefits of the storage project will be included in the 30% weighting associated with non-price factors. The weighting of energy storage is not included in the SGD and will not be disclosed to Applicants.
87. Please clarify how energy storage projects of different scale are compared with each other (e.g., per MW capacity constructed).
RESPONSE: Board Staff will evaluate energy storage projects on a standardized basis to the maximum extent practical. Board Staff reserves the right to evaluate energy storage project benefits and costs using an array of evaluation criteria that will not be disclosed to Applicants.
88. Please clarify if co-located and non-co-located energy storage and hydrogen projects receive the same scoring.
RESPONSE: Board Staff intends to apply the same evaluation method to co-located and non co-located energy storage and hydrogen projects. Applicants who intend to submit energy storage and/or hydrogen projects may do so on a co-located or non co-located basis.
89. The Final SGD mentions an estimated COD of 2030. Is there a benefit for having COD in 2030 or before? Is there a penalization in the evaluation for later CODs?
RESPONSE: The estimated CODs stated in Table 1 of the SGD represent a generalized schedule to meet the goal of 11,000 MW by 2040. Applicants should submit schedules and CODs that are appropriate for their Projects.
90. Please clarify what the "lightly loaded" and "fully loaded" cases refer to on page A10-12 in Appendix 10 of the Final SGD.
RESPONSE: The "Cable System" is defined here as the transmission cables and the Prebuild Infrastructure operating as a whole. "Fully loaded" conditions represent a situation where all other cables in the Cable System (excluding the cable being analyzed for its rating) are operating at their normal (steady state) ratings. "Lightly loaded" conditions represent a situation where all other cables in the Cable System (excluding the cable being analyzed for its rating) are operating at 35% of their normal (continuous) ratings.
91. Please clarify what the "4-hour overload" and "15 min overload" cases refer to on page A10-13 in Appendix 10 of the Final SGD.
RESPONSE: The "4-hour overload" rating represents the loading capability of the Cable System (as defined in Question 90 for a period of 4-hours where the Cable System is operated above its normal or steady state rating for the entire 4-hour period and then returned to its normal rating or below at the end of the overload period. This would potentially align with the cable's Long Term Emergency ("LTE") rating.
Similarly, the "15 minute overload" rating should represent the loading capability of the Cable System for a period of 15 minutes where the Cable System is operated above its 4-hour rating for the entire 15 minute period and then returned to its 4-hour rating or below at the end of the overload period. This would potentially align with the cable's Short Term Emergency ("STE") rating.
Allowable maximum conductor temperatures during these periods should take into account as should all applicable standards and practices for rating and operating transmission cable systems located in the NERC, Reliability First Corporation, and PJM jurisdictions.
92. SGD Section 3.2 has requested that Applicants provide Letters of Intent or MOUs from key suppliers, including WTG OEMs, EPC contractors, and more, in addition to declarations from foundation suppliers and cable suppliers. Many projects are too early in development to have secured such agreements except in case of strategic procurement, and such non-binding or non-exclusive requests to meet this requirement could be disadvantageous to the project's competitive procurement, which is critical to securing the lowest cost for ratepayers. (1) Can Applicants provide a description of a procurement plan instead of LOIs, MOUs, and declarations? Further, information regarding financial strength and existing or pending litigation with respect to each possible supplier is fluid and depends upon the cooperation of each potential supplier. Requests to meet these requirements is time-consuming and likely not in the best interest of the industry given the number of potential suppliers and high volume of Applicants. (2) What are NJBPU's expectations regarding the specificity of this type of information, and can this instead be addressed by Applicants providing a procurement plan that outlines future steps for providing this information at NJBPU's request?
RESPONSE: Applicants may provide a description of the procurement plan instead of LOIs, MOUs and declarations. Board Staff reserves the right to view with favor those bid submissions that include commercial support in the form of LOIs, MOUs and/or declarations between the developer and the OEM. Board Staff expects the Applicant to provide ample documentation showing that the procurement plan is feasible. At a minimum, Applicants should address future steps for providing the requested information, including expected milestones.
93. In Section 2 of the Application Narrative, how should an Applicant depict the onshore transmission ROW if this may be subject to the Prebuild Developer awarded design? Please confirm whether there would be any type of price opener in case the awarded Prebuild Design has a materially different route, or other materially different design aspects, than what an Applicant has considered.
RESPONSE: All Projects must include two identical proposals- one with a Prebuild Infrastructure proposal and one without. For the Applicant Narrative for the proposals without a Prebuild Infrastructure proposal, Applicants may note "N/A" for the onshore ROW.
The Applicant should depict the onshore transmission ROW from landfall to the LCS consistent with the submission requirements stated in Attachment 10. If Applicant's proposed Prebuild design is adopted by the Board, Applicant will be bound by the terms and conditions included in the Board Order. If the Board elects to award the Prebuild Infrastructure to another bidder, then an Applicant's Prebuild Infrastructure will be eliminated from further consideration.
Any awarded Project whose Prebuild Infrastructure design is not awarded (i.e., the Project will be solely utilizing, not constructing, the Prebuild Infrastructure), will not be able to reopen their proposed OREC Offer Price, unless the awardee opts to subsequently petition the Board. Applicants are encouraged to propose an OREC Offer Price in their non-Prebuild Infrastructure proposals that considers the risks of utilizing the Prebuild Infrastructure built by another developer.
94. Please clarify the differences between the following three prompts under SGD Section 3.3:
RESPONSE: Applicant should provide an estimate of the total MWh that will be generated and delivered from the proposed Project over the expected life of the turbines, which may exceed the OREC term. If the life of the turbines is expected to extend beyond the OREC term, Applicant should provide information to support the expected annual generation and expected useful life beyond the OREC term.
Applicant should provide an estimate of the total MWh that will be generated and delivered from the proposed Project over the expected life of other Project equipment and facilities, which may exceed the OREC term, if such estimate will differ from the estimate of energy generated and delivered over the life of the turbines. If the useful life of the equipment and other facilities is expected to extend beyond the OREC term, Applicant should provide information to support the expected annual generation and expected useful life beyond the OREC Term.
This estimate would be the same as the estimate in the first bullet above.
95. Related to SGD Section 3.6, can NJBPU please clarify what type of "documentation" Applicants are expected to provide, at a minimum, to demonstrate that the Applicant has applied for credits, grants, and other incentives?
RESPONSE: Documentation may include, at a minimum, a full list of applications for eligible State and Federal grants, rebates, loans, tax credits and incentives affecting Applicant's ability to offset the cost of the Project. Board Staff reserves the right to request additional documentation.
96. Related to SGD Sections 3.4 and 3.7, please confirm that there will not be any pro-forma standard financial statements provided by the NJBPU to all Applicants, and therefore it is the responsibility of Applicants to develop and provide such documents.
RESPONSE: The provision of financial information enumerated in Sections 3.4 and 3.7 is solely the responsibility of the Applicant.
97. The SGD reads as if the EPP prompts should be addressed in a standalone attachment to Section 10 of the Application Narrative, whereas the FPP prompts should be addressed directly in Section 11. Please confirm that is the desired format.
RESPONSE: For consistency, the FPP should be included as an attachment to Section 11 of the Application Narrative.
98. If an Applicant proposes to include supplemental excess merchant headroom, is that supplemental merchant headroom entitled per se to SAA benefits? If it is not, may an Applicant submit two separate Projects (one with and one without)? May an Applicant propose such excess merchant headroom in addition to an SAA eligible bid and receive public policy resource treatment?
RESPONSE: Incremental capacity greater than 1,200 / 1,342 MW is subject to TSUC. See SGD Section 3.13. Applicants can submit one or more alternative proposals that may relate to excess merchant headroom. Applicants are encouraged to review the FERC-approved PJM Rate Schedule 49 § 4.3 and § 6.2 for details on the PJM interconnection study process for offshore wind generators selected by the Board to utilize SAA Capability.
99. Related to SGD footnotes 59 and 61, please confirm that "life of the turbines" and "useful life of the turbines" are defined the same way. Related to SGD footnotes 60 and 61, please confirm that "useful life of the Project equipment" and "useful life of the turbines" are defined in the same way.
RESPONSE: The references to "life of the turbines" in footnote 59 and "useful life of the turbines" in footnote 61 are synonymous.
The references to "useful life of the Project equipment" and "useful life of the turbines" in footnotes 60 and 61 may include different equipment, but the reference to "useful life" in both are defined in the same way.
100. Related to SGD Section 3.3, please confirm if for "the coincidence between time of generation for the Project and peak electricity demand", the peak electricity demand should be derived from the "Metered Hourly Load" data from PJM's Markets and Operations website. Please identify the time period, NERC Region, Market Region, Transmission Zone, and Load Areas that should be considered in the comparison.
RESPONSE: Please see SGD footnote 58, for PJM's definition of seasonal peak and off-peak hours for the wholesale market.
101. Please define "Expected Generation" and "Delivered Generation". Please clarify which losses should be included in each.
RESPONSE: The derivation of losses between the Applicant's Expected Generation and Delivered Generation is the responsibility of the Applicant, based on technology considerations and other risk issues of relevance.
102. In the "WTG Performance Data" tab in the Application Form, please confirm whether Applicants should provide P50 values. Please clarify how Applicants should determine the Annual OREC Allowance, or if it is up to Applicant discretion.
RESPONSE: Yes, the Applicant should consider P50 values in its submission of WTG Performance Data. Applicants are free to consider more or less risky performance profiles in the determination of Annual OREC Allowances. Board Staff reserves the right to submit clarifying questions ("CQs") to Applicants seeking clarification in regard to the determination of the Annual OREC Allowance.
103. Does NJBPU intend to make Critical Milestone dates public?
RESPONSE: Yes, Board Staff expects to make the Critical Milestones public. If a Qualified Project believes that its proposed Critical Milestone dates should be protected under N.J.A.C. 14:1-12.1(b), it should make that assertion per the Board's rules of practice and procedure governing submission of confidential materials, N.J.A.C. 14:1- 12.1, et seq., and the Open Public Records Act, N.J.S.A. 47:1A-1 et seq.
104. "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 provide a working example with hypothetical figures to demonstrate how this reduction in OREC price would work.
RESPONSE: If the Seller-selected Rate of Return is 7.5%, the Estimated Annual OREC Quantity is 5,256,000 MWh (1,200 MW at a 50% capacity factor), and the Uncured Deficiency is $50,000,000, the annuity factor would be 0.0981 and the OREC price adjustment would be $0.93/MWh.
105. Please confirm that the Board plans to direct the SAA developer, Prebuild infrastructure developer, and other offshore wind developer(s) utilizing the Prebuild Infrastructure to execute a contract governing their legal relationship, but that the contract will be negotiated and executed by the SAA developer, Prebuild infrastructure developer, and other offshore wind developer(s) utilizing the Prebuild Infrastructure outside of any Board Order and Board solicitation process. To be clear, we request confirmation to the effect that the SAA developer, Prebuild infrastructure developer, and other offshore wind developer(s) utilizing the Prebuild Infrastructure are expected to engage in their own commercial negotiation and preparation of an agreement.
RESPONSE: MAOD, the SAA developer, is bound by the terms and conditions established by the Board in the Board Order approving the selection of MAOD for the SAA and in their Designated Entity Agreement with PJM, filed with FERC. The Prebuild infrastructure developer and one or more generation project developer(s) will likewise be bound by the terms and conditions incorporated in the Board Order approving the Prebuild Infrastructure and other Board Order(s) granting ORECs to the awardee(s). The Prebuild Infrastructure developer and generation project developer(s) may petition the Board if one or more terms and conditions warrant further consideration. Board Staff does not expect MAOD, the Prebuild Infrastructure developer, and other offshore wind developer(s) utilizing the Prebuild Infrastructure to engage in their own commercial negotiations and preparation of any agreement.
106. Please confirm that the Board plans to have the contract executed by the SAA developer, Prebuild infrastructure developer, and other offshore wind developer(s) utilizing the Prebuild Infrastructure filed with the Board as a supplemental tariff or compliance filing. It would be helpful if the Board could specify the type of filing (if any) and the filing party.
RESPONSE: The terms and conditions for the awarded Prebuild Infrastructure developer and other offshore wind developer(s) utilizing the Prebuild Infrastructure will be set forth in the Board Order(s). Staff does not intend to utilize other contracts or supplemental tariff filings at this time.
107. How will NJBPU evaluate an Applicant's request to "reallocate or replace personnel/resources or key employees listed in their Application", especially for such persons that make individual decisions to change jobs or retire? Related, please clarify whether the reallocation/replacement clause is limited to "key employees", as indicated in the Applicant Commitment Form and defined in NJAC § 14:8-6.1, or to any other "personnel/resources" that may be identified in the Application.
RESPONSE: Board Staff cannot speak to how the Board might evaluate potential future requests to "reallocate or replace personnel/resources or key employees listed in their Application." Unless stated otherwise in the Board Order, any awarded Project will be subject to N.J.A.C. 14:8-6.1.
108. Please confirm that the total funding commitment value specified as the Tier 1 Investment Commitment Security is intended to be the Applicant's portion of investment into the Tier 1 facility, and not intended to be the entire cost of the facility.
RESPONSE: The total funding commitment value is intended to be the Applicant's portion of investment into the Tier 1 facility, and not intended to be the entire cost of the facility.
109. The SGD states that "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." An Applicant's commitment, through the Qualified Project, into a Tier 1 infrastructure investment may instead be an anchor order or reservation commitment. Such orders or reservations may not translate appropriately into a funding commitment for the purpose of the commitment security. Please confirm that if an Applicant's commitment to a Tier 1 facility is an anchor order or reservation commitment, and not funding in the form of cash or loan, there is no commitment security required.
RESPONSE: Commitment security is required for investment commitments by the Qualified Project. If the Applicant does not guarantee or pledge an investment commitment to enable supply chain mobilization in New Jersey, there will be no commitment security required.
110. Slide 7 from the deck presented at the Bidders' Conference indicates that Application Requirements include a "Performance Guarantee Proposal"; however, the SGD indicates that Qualified Projects will address performance guarantees through a compliance filing with the Board within 90 days after the effective date of the Board Decision. Please clarify how Applicants must address performance guarantees in their Application.
RESPONSE: Applicants are not required to address performance guarantees in the Application.
111. Applicants must include unconditional guarantees for proposed in-State jobs by Project phase. 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: Applicants are not required to provide guarantees for indirect and induced jobs.
112. Is the Annual OREC Allowance measured at the point of interconnection?
RESPONSE: The Annual OREC Allowance will be measured based on ORECs registered in PJM-EIS GATS.
113. Please explain how ROI will be calculated and what impact ROI calculation may have on scoring?
RESPONSE: Applicants must include information pertaining to pro forma income statements that provide Board Staff with reasonable insight into financial assumptions supporting Applicant's ROI. Board Staff will rely on the Applicant's representation. ROI will not be quantitatively evaluated.
114. Within the Application Form pg. 17, the chart titled "Expected Annual Total Indirect and Induced in-State Economic Effects" states: "In-State Labor & Prop(r) Income ($ Mil)". What does Prop(r) mean?
RESPONSE: Prop(r) means real proprietor income.
115. Please specify where the value of in-state expenditures for components of a Qualified Project should be captured in the Applicant form?
RESPONSE: The value of in-state expenditures for components of a Qualified Project should be reported in column F of the "Bill-of-Goods" tab (see pages 14-15 of the Application Form included as Attachment A under the heading "In-State Cost ($ Mil)").
116. Please specify within the Applicant form if "Labor expenditures" refers to all labor, or Union Labor.
RESPONSE: Labor expenditures refers to all labor.
117. Please specify if "In-State Expenditures" Capital Investments ($ Mil)" should capture the entire capital investment of a new supply chain facility, or just an Applicant's direct contribution to the facility capex? How should this be treated if multiple Applicants are utilizing a new supply chain facility?
RESPONSE: "In-State Expenditures" Capital Investments ($ Mil)" should reflect the Applicant's direct contribution to the facility capex. If multiple Applicants plan on using the same new supply chain facility then the "In-State Expenditures" Capital Investments ($ Mil)" in each application should report its individual direct contribution to the facility capex.
118. Please explain the statement indicating the LCS configuration may be being modified to support all 3,742 MW. Are there plans to upgrade the design to a single collector station design where all circuits would be intertied?
RESPONSE: See the response to Question 25.
119. Please clarify the scope of work that MAOD will be responsible for at the Converter Site area. Specifically, what degree of site preparation will MAOD do for the Converter Site area?
RESPONSE: MAOD site preparation will consist of tree clearing, clearing and grading with native soil, seeding, temporary fencing and access roads.
120. Can the BPU confirm that BPU/MAOD will secure land rights on behalf of the Awarded Project for the landfall location at Sea Girt to deliver the Prebuild Infrastructure?
RESPONSE: No, neither the BPU nor MAOD will secure land rights at Sea Girt. The Project will need to do so. Please engage the Department of Military and Veterans Affairs to ensure that the Project properly secures such rights.
121. Who should Applicants contact to discuss questions and comments on the NJ Division of Rate Counsel NDA?
RESPONSE: Questions and comments on the NJ Division of Rate Counsel NDA should be addressed to Maura Cariselli (mcaroselli@rpa.nj.gov) and David Wand (dwand@rpa.nj.gov).
122. Can a sample of how the Application Form should be populated be posted?
RESPONSE: Yes, a sample Application Form will be posted to the Solicitation Documents page.
123. Applicants are encouraged to commit/plan to use the New Jersey Wind Port ("NJWP"); however, depending upon BPU's selection of Qualified Projects, it's possible (or even likely) that more than two Qualified Projects will need to secure marshalling ports for the same time period in order to meet their respective Project timelines, and thus a Qualified Project may be forced to marshall at another location - even out of state - through a circumstance that cannot be predicted when calculating in-state economic impacts for the purpose of this Application process. Please clarify if NJBPU will accept qualified commitments for economic benefits associated with use of the NJWP for marshalling, subject to securing a slot at the NJWP. If not, an Applicant may run the risk of failing to meet these in-state spending/job commitments through no fault of its own, which would result in an OREC price reduction, combined with marshalling out-of-state, which is potentially more costly to the project based on longer transit distances.
RESPONSE: Proposed use of the NJWP that contributes to economic benefit commitments will be treated the same as any other economic benefit commitment. More specifically, economic development plans must include unconditional spending guarantees. See SGD Section 3.8.
124. Pursuant to SGD footnote 38 and NJAC 14:8-6.5(a)(12)(ix), Applicant may propose to retain up to 25 percent of the incremental energy revenues, but not any other environmental attributes or other benefits[.] Please clarify what the Board considers to be "incremental energy revenues."
RESPONSE: Board Staff intends the phrase "incremental energy revenues" to relate to ORECs only. Accordingly, "incremental energy revenues" means, with respect to ORECs, those market revenues generated after the annual OREC allowance has been exceeded, subject to an Applicant's ability to bank ORECs up to two successive years, per N.J.A.C. 14:8-6.6(a)(5).
125. N.J.A.C. 14:8-6.1 Definitions appears to indicate that the Project Qualification life can be more than 20 years. Per the definition of Offshore Wind Facility Qualification Life, the Qualification Life begins at COD and extends through the end of the Energy Year that is 20 years later. For instance, if a Project is commissioned on October 10, 2028, then the Qualification Life would extend through the Energy Year that includes the date October 9, 2048, which would be May 31, 2049. Please confirm that this is correct: A Project that commissioned in October 2028 would remain eligible to sell ORECs to NJBPU through May of 2049.
RESPONSE: Per N.J.A.C 14:8-6.6(a)(3), "[a] developer of a qualified OSW project shall be eligible to receive the project's approved OREC rates and payments for 20 years subject to the terms and conditions of the Board Order."
The definition of "Offshore Wind Facility Qualification Life" allows the portion of ORECs associated with the twentieth year of the OREC term to be generated through the end of the twentieth Energy Year. It does not allow a Project to generate ORECs beyond the twenty-year (240-month) OREC term.
126. Can NJBPU please confirm that the Performance Guarantee Critical Milestone one-time as-of-right extension only applies to Qualified Projects, and not Prebuild Infrastructure?
RESPONSE: The one-time as-of-right extension applies to both the Qualified Project and the Prebuild Infrastructure.
127. Tier 1 Investment Performance Guarantee requirements are confusing. Our understanding is:
RESPONSE: Assumptions for the example provided below:
128. The NJWP prospectus indicates a January 2027 site readiness date for Parcel B2. Is it possible to accelerate the readiness date to accommodate an earlier start of building construction on part of that land? If so, what is the earliest possible availability date for partial site readiness?
RESPONSE: The New Jersey Economic Development Authority ("NJEDA") is providing additional clarity on the earliest lease commencement date for Parcel B2. If the parcel (or portion thereof) is leased on an "as is" basis (i.e., without any site preparation or infrastructure improvements), then the earliest lease commencement date is January 1, 2025.
NJEDA has also revised the timeframe for core infrastructure completion on Parcel B2. Previously, NJEDA had advised that parcel development, which includes the improved backlands and wharf infrastructure but not a manufacturing facility, would be complete in 2028. This date is being brought forward to Q1 2027. While NJEDA expects that facility construction could commence prior to the completion of the parcel, it cannot comment on precisely when facility construction could commence. Such a determination would be a facility-dependent one.
129. As per the Final SGD, the awarded project has up to 90 days to make their compliance filing for the offshore wind project but has only 60 days to make first performance guarantee payment for the PBI. Can the NJBPU reconsider the sequence of these events as compliance filing and Board approval should logically take place before posting of any performance guarantees?
RESPONSE: The reference to 60 days to make the first performance guarantee payment for the Prebuild Infrastructure is meant to require the payment be made within 60 days prior to the date for Critical Milestone 1.
130. We believe that project capacity and transmission design will be highly dependent on the pre-build infrastructure design. How will the BPU approach a "mismatch" between an as-bid project and a different bidder's pre-build infrastructure design? For example, let's say a given bidder designs their project under the assumption that the pre-build infrastructure will be designed to allow 1,500 MW at 400 kV, but the BPU decides to select a pre-build infrastructure project designed for 1,500 MW at 525 kV, a significantly lower current. Will the project be allowed to re-design/re-price their bid to conform to the pre-build infrastructure design? Or alternatively, will the pre-build infrastructure bidder be required to re-design/re-price their bid to conform to the project bids? Note that we believe potential mismatch issues could be resolved by modifying the Attachment 10 language so that the casings, conduit, and vaults are sized for the largest possible cable - 525 kV - but the spacing between circuits, depth of circuits, and backfill of trenches are designed for 400 kV, 1,500 MW.
RESPONSE: Applicants will not be allowed to re-design/re-price their project once awarded. Proposals should make clear what assumptions were made. Flexible designs are encouraged.
131. Regarding the cofferdam component of the Prebuild Infrastructure:
RESPONSE: The cofferdams are to facilitate the shoreline interface underwater HDD exit and potentially installation of the cable from the underwater HDD exit to its seabed jet plow installation. Other methods can be proposed. Note that HDD exits on the seabed need to be preserved for future cable installations.
Applicants should provide reasoning for why they are choosing the methods they propose and discuss impacts which may result.
132. Attachment 10, Bullet #8 requests rating scenarios for proposed Prebuild Infrastructure design, including short term overload capability for one circuit. Multiple suppliers have stated that there is no short-term overload capability for 320kV, 400kV, or 525kV HVDC land cables. If no overload capability is found from other suppliers, can this rating case be removed without penalty?
RESPONSE: Ratings for HVDC systems being proposed in the Application (including cables and converters) should be sufficient to deliver the desired power level to the POI at the LCS on a continuous basis for all seasons and normal operating conditions. If any short-term overload capability is available in the HVDC system, the Applicant should specify the MW value of this capability and associated time limit.
133. Collateral provisions are important for project finance lenders and investors. What are the step-in provisions available for Lenders? In the event of a borrower default, will we have the ability to execute a consent to collateral assignment, where there is a change of control, without Board approval?
RESPONSE: Per N.J.A.C. 14:8-6.5(a)(1)(v) and N.J.A.C. 14:8-6.5(a)(4)(iv), in the event of any sale or other transfer to any other entity of an awarded project, the Project must first notify and receive Board approval, including change of control due to a borrower default.
134. To date, have the townships/boroughs along the cable route been consulted or informed of the potential for transmission lines to come through their communities?
RESPONSE: Since the cable route or Prebuild Infrastructure corridor has not yet been established nor determined, Board Staff has not consulted with or informed local communities of the potential for transmission lines to be installed in their communities, with the exception of informing the Department of Military and Veterans Affairs of transmission lines that will be installed on the property of the National Guard Training Facility at Sea Girt. Board Staff has, however, conducted a stakeholder process for the draft SGD, which included public notice of the proposed shore landing spot of Sea Girt NGTC, utilization of the LCS as the POI and the request for Prebuild Infrastructure proposals.
135. Section 3 notes that "A wind resource and energy assessment from a wind energy consultant for the exact manufacturer, model and specifications of turbines selected for the Project." Does this mean that any 8760s and diurnals for production must also come from the consultant, or just the P values and net capacity factors?
RESPONSE: Board Staff did not intend to imply that the technical content requested must come from a consultant. It is up to the Applicant to decide how best to provide the requested information, including content from a consultant and/or responses to CQ requests from a consultant.
136. Could the BPU provide additional detail around the requirements related to the Feasibility Study referenced in the Section 4 requirements? What is the level of coverage and detail sought by the BPU? Does the Feasibility Study need to be completed by a third party?
RESPONSE: N.J.A.C. 14:8-6.5(a)(3)(v) sets forth the cost accounting system. Board Staff encourages Applicants to provide as much as information as possible to support a full cost accounting of the project, including additional detail into the tax credits and subsidies used to derive Project economics. It is up to the applicant to address the level of detail associated with longer term issues associated with decommissioning. The Applicant is free to choose how best to provide the requested information in the Feasibility Study.
137. May Applicants include an OREC cost premium associated with the addition of energy storage? If an energy storage project is selected through the solicitation, will the awardee be required to refund the energy storage system revenues back to ratepayers or will they be retained by the Project owner?
RESPONSE: Bidders may include the additional cost of energy storage in the OREC offer price, as an option. An awardee that includes a co-located or non-co-located energy storage project in the OREC price will be required to maximize and return all revenues during the OREC term to ratepayers.
138. Please elaborate on the anticipated ratings of the equipment at the LCS where the developer HVDC converter stations will connect.
RESPONSE: Ratings of the equipment at the LCS will be consistent with the Board's SAA Order, where 230kV circuit breakers will be rated at 4000A nominal current and transformers for the circuit going to Smithburg at 450MVA each phase.
139. Please advise when the following will be due: "If awarded, a Qualified Project shall implement a community engagement plan specific to the impacted OBC and appropriate control measures approved by NJDEP."
RESPONSE: If impacts to an OBC are anticipated during or after construction, including, but not limited to, increased noise, dust, impervious surface, truck traffic or loss of tree canopy or open space, then the Applicant shall include a community engagement plan specific to the impacted OBC as described in Sections 3.9 and 3.10 of the SGD. Per N.J.A.C. 14:8-6.5(a)(16), this information must be provided in the Environmental Protection Plan to assist the Board in its evaluation of the Application.
140. Please clarify why the BPU has limited its ability to extend the deadline for notification and termination regarding a Contingent Project to one time, for up to 30 days?
RESPONSE: BPU has a statutory obligation to complete its review of eligible projects within 180 days following receipt of an administratively complete Application. To meet the milestone schedule culminating in a potential Board Order in December 2023, the Board reserves the right to terminate consideration of a Contingent Project no later than July 31, 2023.
141. SGD page 48 says [Applicants must provide] "Guaranteed minimum total in-State jobs creation (in FTE-years), labor expenditures, and total expenditures by phase (development, construction, operation, and decommissioning)". Footnote #121 goes on to say "For purposes of identifying shortfalls relative to guarantees, only the total job-years and expenditures will be subject to BPU enforcement." Please confirm that this is correct: The Applicant must provide four guarantees: (1) in-State spend for the development + construction phases, (2) jobs (measured by job-years) for the development + construction phase, (3) in-State spend for the operations phases, and (4) jobs (measured by job-years) for the operations phase. However, shortfalls relative to those four guarantees will be identified as shortfalls for total, cumulative job-years (i.e. 2+4) and total, cumulative expenditures (i.e. 1+3).
RESPONSE: Footnote 121 is more fully explained elsewhere in the SGD, as follows:
"Economic Development Plans must include unconditional guarantees for proposed direct in-State spending stated on a total basis for the development phase and construction (including component manufacturing) phase, and on an annual basis for the operation phase" (p. 28).
"Applicants must also include unconditional guarantees for proposed in-State jobs by Project phase, stated on a total basis for the development phase and construction (including component manufacturing) phase, and on an annual basis for the operation phase" (pp. 28-29).
The sum of the development and construction phases provides their total spending and jobs guarantees. The total spending and jobs shortfalls for those two phases are measured and cured separately from shortfalls in spending and jobs guarantees during the operation phase. The operation phase has two dates when actual total spending and jobs are measured over the preceding subset of operating years, and cumulative total spending and jobs shortfalls over the preceding operating period are cured.
142. Please explain the mechanism by which Applicants can modify proposed nameplate capacity after award, if no changes to the Annual OREC Allowance are proposed?
RESPONSE: After an award has been made, the Applicant may petition the Board for consideration of a modification to Project nameplate capacity.
143. How will BPU evaluate proposed schedules for Prebuild Infrastructure vs. OSW bids? Specifically, will BPU only award a Prebuild bid that has a construction schedule earlier than all to-be-awarded OSW projects? If not, how will OSW projects with proposed CODs before the awarded Prebuild COD be compensated?
RESPONSE: The BPU will only award a Prebuild Infrastructure that has a construction schedule earlier than all to-be-awarded offshore wind Projects. Under certain circumstances, the Board or Board Staff may consider requesting that an Applicant advance the COD of the Prebuild Infrastructure.
144. At the Bidders' Conference, BPU indicated that they would provide final base values for the inflation adjustment indices once the values are published. Can BPU please provide an update on when these values will be provided?
RESPONSE: Board Staff intends to provide the final base values for the inflation adjustment mechanism on or before June 15, 2023.
145. What happens to revenues received before COD (measured as 90% of turbines commissioned)? Please confirm that developers can retain all revenues before start of the OREC term, which is measured as COD.
RESPONSE: With respect to generation revenues, all project revenues derived from test generation prior to the start of the OREC term may be retained by the developer.
146. Regarding the Application Form, please clarify what BPU would like to see presented in row 38 of the Project Summary tab. Is BPU expecting to see gross capacity factor, a capacity factor considering all or some losses (if some, please clarify which ones), or other?
RESPONSE: Gross capacity factor is to be reported in row 38.
147. 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, there is not a recommended list of components and subcomponents. The categorization should be similar to the breakdowns that are used to itemize costs and labor time for each phase in the Applicant's regional economic impacts model and the sources drawn upon to provide the estimates of direct expenses and labor time. Multiple project cost and labor line items may map to the same industry classification in the regional economic impacts model but should be shown in the breakdowns used in the source documents in order to validate and trace how various types of expenses and labor produce local economic impacts.
148. Regarding the Application Form, must there always be a subcomponent for entries on the Bill of Goods tab? For example, it is unclear how to present an item such as project management (PM) and engineering.
RESPONSE: No, subcomponents are not required if the source materials do not further disaggregate the cost and labor estimates in the component category. Items such as PM and engineering are often aggregate estimates over the entire budget for construction, but there may be separate estimates by contractors or subcontractors involved in the manufacturing or fabrication of various aspects of equipment, logistics, or other construction categories.
149. Regarding the Application Form, please confirm if in-state capital expenditures on the Economic Impact tab should include the labor expenditures.
RESPONSE: Yes, in-state capital expenditures should include labor.
150. Regarding the Application Form, please confirm if in-state capital expenditures on the Economic Impact tab should include supply chain purchases.
RESPONSE: Only direct expenditures of purchases from known or to be determined in-state goods and services suppliers are to be included. The entire supply chain, which likely also includes multiple rounds of further purchases for the direct suppliers, would be indirect expenditures calculated by the regional economic impacts model.
151. Regarding the Application Form, please confirm that in-state capital expenditures on the Economic Impact tab are NOT supposed to include transfers to government/non-profits.
RESPONSE: Confirmed.
152. Regarding the Application Form, there are a number of formulas that do not appear to be accurately summing all rows or columns. How should Applicants address this?
RESPONSE: An updated Application Form will be posted with the identified formula errors corrected.
153. Can BPU please elaborate on the "opportunity to cure the shortfall" in the case of not meeting the in-State spending guarantees for the development and construction phases?
RESPONSE: If the in-State spending guarantees for the development and construction phases are not met, the project may opt to "cure" such shortfalls by increasing spending in other areas (See the response to Question 154), or identifying and meeting new guaranteed spending commitments of equal or greater value to ratepayers, subject to Board approval.
154. As the in-State spending guarantees for the development and construction phases are on a total basis, can BPU please confirm that if certain presumed spending within the total in-State spending commitment during those phases is not met, a developer in its own discretion and without approval from BPU can adjust its in-State spending plan to otherwise meet those commitments during each phase?
RESPONSE: Any adjustment in an Applicant's approved in-state spending plan would require Board approval.
155. Regarding Section 3.17, please clarify whether it expects the CBA to include elements associated with prebuild infrastructure or should a separate CBA be prepared and submitted for prebuild only? Specifically, should expenditures and resulting benefits (jobs, induced/indirect benefits, etc...) associated with the prebuild be incorporated into a single CBA or assessed and reported separately. Additionally, should the prebuild be incorporated into the emissions analysis, ratepayer net impacts analysis, and or any other required analyses associated with the CBA?
RESPONSE: Applicants should provide separate CBAs-one associated with the project only and one associated with the Prebuild Infrastructure only. All applicable analyses should be included in both the project-only and Prebuild Infrastructure-only CBAs.
156. Regarding Section 3.17, please clarify whether the environmental and emissions impacts analyses include emissions and environmental impacts associated with construction and operation of any new Tier 1 or Tier 2 offshore wind supply chain facilities funded in part by the Proposer?
RESPONSE: The emissions and environmental impacts associated with the Applicant's investment in new Tier 1 or Tier 2 facilities should be provided, separate from the environmental and emissions impacts associated with the proposed project.
157. Regarding Section 3.18, please clarify whether the emissions, bill-of-goods, and economic benefits components of the application form include prebuild infrastructure or should a separate application form be submitted for prebuild only?
RESPONSE: A revised Application Form will be available soon on the Solicitation Website that allows for separate inputs for the project and the Prebuild Infrastructure.
158. Attachment 11 of the SGD states that "In the future, Qualified Projects may need to install AC equipment to facilitate at least two (2) connections to other offshore wind OSPs" (Attachment 11, Offshore Transmission Network Preparation Requirements, Page 2). Can NJBPU please clarify if it is envisioned that greater than "at least two (2) connections" will be required to an OTN Ready platform?
RESPONSE: In order to be considered OTN Ready, a Qualified Project must have the space available to accommodate no fewer than two connections to other OSPs. Applicants are free to include space for more than two connections to OSPs in their proposals, but it is not required.
159. With respect to NJ BPU's response to Question 28, it is our interpretation that BPU is assuming all electrical equipment is already installed on the OSP to effectuate a future OTN implementation prior to sail-out which would include, but is not limited to P&C equipment, switchgear, transformers, reactors, AC choppers, and associated buswork. From the SGD: "OTN Ready, involves the reservation of space on Qualified Projects' OSPs to accommodate future additions of OTN tie cables and operation." Further, "[t]he Third Solicitation OTN concept does not entail installation of OTN equipment" does not provide clarity as to the BPU's intent as it is not readily apparent what is envisioned to be proposed. As written, Appendix 11 reads as though the BPU is asking for an OSP that include in its base design all necessary HVDC equipment, turbine array AC equipment, necessary OTN AC equipment, and allocated space reserved for future OTN cable pull-in and termination. Can BPU please clarify its expectations regarding the inclusion of potential stranded assets in the form of OTN terminal equipment (switchgear, transformers, AC choppers, etc.) in the design and associated pricing of the OSP?
RESPONSE: The design of each OSP should include space for future installation of all equipment needed for integration of the OTN. This includes spatial, operational, weight, maintenance, and equipment removal/replacement considerations. Qualified Projects are not expected to install OTN related equipment at this time.
160. (Section 3.13, page 38): Can the NJBPU advise how they will compensate projects that have their project delayed solely due to delays in the construction of the PBI that is being developed by another developer?
RESPONSE: Projects will not be compensated for project delays due to delays in the construction of the Prebuild Infrastructure. Projects may petition the Board for approval of project delays in accordance with requirements that will be contained in the Board Order approving a project.
161. With project-only bids and prebuild infrastructure pricing components included in the same Application Form, how would the BPU prefer that bidders separate out or separately indicate economic impacts that are specific to the prebuild infrastructure component of the bid?
RESPONSE: A revised Application Form will be available soon on the Solicitation Website that allows for separate inputs for the project and the Prebuild Infrastructure.
162. Will BPU be requesting a best and final offer, and if so, what will be the parameters of that request?
RESPONSE: BPU Staff may request a best and final offer (BAFO) from all Applicants. If a BAFO is requested, Applicants will be allowed to offer a lower first year OREC price, and/or a reduction in the escalation rate for both the Project and Prebuild Infrastructure components. Applicants will be required to describe the changes to the Application related to their BAFO submission, however no changes to the project design will be allowed. Additional details on the BAFO parameters will be provided if or when the BAFO is issued.
163. Is the Board considering delaying Solicitation 3 Application submittal until the IRS issues guidance on the ITC applicability?
RESPONSE: No. Applicants must include all information requested in the SGD relative to tax credits, subsidies and incentives, including (Solicitation Guidance Document Section 3.6). If additional guidance is issued after the Submission Deadline which impacts a project's application, the Board may offer Applicants the opportunity to refresh their OREC offer prices based on new IRS guidance; and therefore, the Board may consider extending the award date beyond 180 days from receipt of an administratively complete application in accordance with N.J.A.C. 14:8-6.3(c).
164. Related to Question 52 of the posted Q&A, there will be significant additional cost to the project to achieve certain tax credits (for example, ITC domestic content adder), which may not be incorporated into OREC Purchase Price at the time of Application submission, but would result in ratepayer benefits over the OREC term. BPU must change this such that a project only passes on the net benefit, or developers will not pursue these (for example, domestic content adders), as it will result in a loss to the Applicant.
RESPONSE: In return for the sale of ORECs, Qualified Projects are required to return to ratepayers the value of tax credits, subsidies, grants or other funding received that was not anticipated in the Application and therefore not reflected in the Applicant's OREC price, but has been realized through diligent pursuit of additional tax credits, subsidies, grants, or other funding that protects ratepayer interests. See footnote 38 of the SGD. Applicants are required to make efforts to maximize these tax credits, subsidies, grants, or other funding at the time of Application submittal. Awarded projects are required to make efforts over the OREC term to maximize these benefits that provide a benefit to New Jersey ratepayers. Awarded projects are required to return net tax, subsidy, or grant benefits to ratepayers, subject to Board review and approval of the costs to obtain the benefits.
165. Statements from the 8D Order OSW Third Solicitation:
RESPONSE: The Board will not be issuing additional guidance on OTN Ready requirements before the Application Submission Deadline. Applicants must meet the minimum requirements provided in Attachment 11 of the SGD. As noted in Attachment 11, Applicants must envision a "future system based on today's knowledge of offshore wind generation and HVDC transmission technologies.to inform the minimum amount of additional platform space," leaving the assumed specifications of the equipment that may be utilized in the future up to the Applicant.
166. Please clarify which of the below options should be used to understand excess revenues:
RESPONSE: Neither Option 1 nor Option 2 indicates how excess revenues will be determined. Applicants should view Excess Revenue as follows:
167. Please provide detailed, descriptive guidance on what counts as in-State spend. Some examples:
RESPONSE: Contracting through an NJ entity that procures a manufactured good from outside NJ must only include the NJ-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 OSW project developer is $1.2 million, which involves NJ-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 NJ-contractor, the in-State direct expense is $200,000. The Applicant bears the responsibility for sufficient documentation to ensure that the proposed added value allocable to New Jersey can be determined.
168. Regarding Attachment 12, we note that details (e.g., timing for the B1 Marshalling harbor) in "Figure 3 - Parcel specifications" of the SGD differ materially from "Figure 5 Parcel availability" included in the pdf shared by EDA following a mid-March meeting. Please clarify any discrepancies and indicate which document includes the most accurate information proposers should use?
RESPONSE: The New Jersey Wind Port Prospectus (Attachment 12) contains the most up-to-date information on the earliest sublease start dates and expected technical specifications (e.g. psf, acreage) for each parcel of property. This Prospectus, and any additional answers posted by NJBPU, supersede any information previously issued by the NJEDA.
169. With respect to NJ BPU's response to Question 28, requiring inclusion of the OTN equipment and space on the OSP presents several challenges including substantial increases in dimensions and weight, potential for stranded assets in the event that OTN never materializes, or the design substantially changes and added design complexity for an already overly complex facility. There are several instances in the SGD in which the BPU recognizes that there are potential opportunities for optimizing OTN design in the future and an expectation that Qualified Projects consider "future proofing" measures in OTN design. Can BPU please clarify its position on requiring the OTN equipment and space to be included on the OSP given its desire to "future proof" any potential OTN and provide any applicable studies indicating such approach is ideal?
RESPONSE: See the response to Question 165. Further, no studies or additional information will be provided.
170. Regarding Section 3.16 of the SGD, please clarify whether Applicants should plan to decommission the PBI at the end of life of the project or consider selling it to other users for alternative use cases? This may have tax implications. Additionally, does the NJBPU require that Applicants include the cost of decommissioning in their PBI OREC price adder offer?
RESPONSE: Yes, Applicants should include the cost of decommissioning of the Prebuild Infrastructure in their Prebuild Infrastructure OREC offer price, and should include a description of how the Prebuild infrastructure would be decommissioned. If at the end of the Prebuild Infrastructure owner's OREC term, any other Qualified Offshore Wind Project utilizing the Prebuild Infrastructure has continued economic life, then the Prebuild Infrastructure owner cannot decommission the Prebuild Infrastructure. Ownership of the Prebuild Infrastructure may be transferred to another entity, subject to Board approval. Any future owner(s) of the Prebuild Infrastructure will be subject to all terms and conditions set forth in any Board award. See Attachment 10.
171. Regarding Section 3.10 of the SGD, which requires "A visibility study that presents visual simulations of the Project from the nearest coastline point, including, at a minimum, clear, partly cloudy, and overcast conditions during early morning, midafternoon, and late day, as well as one simulation at night with the turbines lit under clear conditions, for both summer and winter"), please clarify/quantify the number of visual simulations required. Are simulations from the nearest coastline point required for both summer and winter for the weather conditions and times of day indicated?
RESPONSE: No set number of simulations is required. Simulations are required for both summer and winter for the weather conditions and times of day specified in the SGD.
172. Regarding Attachment 8, please describe what is meant by "incremental investment" specifically with respect to the deployment of monitoring equipment on offshore wind infrastructure. Please explain the type and extent of information that must be provided to satisfy this bid requirement.
RESPONSE: "Incremental investment" as it relates to the Offshore Wind Infrastructure Monitoring Plan means the proposed capital and operating costs associated with implementing the Applicant's Offshore Wind Infrastructure Monitoring Plan, and which will be recovered through the OREC payments. These capital and operating costs are considered "incremental" in that they do not include any costs associated with constructing and operating the Project itself. Applicants should provide the total capital cost associated with procuring and installing the monitoring equipment, and an estimate of annual operation and maintenance costs over the OREC term.
173. Please provide New Jersey RMI's research objectives as it relates to this information requirement in Attachment 8: "Clearly articulate New Jersey RMI and regional research objectives so bidders can evaluate how to best align with them."
RESPONSE: The RMI's objectives can be found on the RMI webpage here.
174. Regarding Attachment 7, please confirm that the following data categories are not expected to be included the Data Management and Availability Plan: (i) Proprietary Data, (ii) data in the public domain (e.g., environmental data originating from or maintained by federal, state, or nongovernmental repositories and organizations).
RESPONSE: Applicants should identify proprietary data that will be collected, but proprietary data does not need to be made public. The Data Management and Availability Plan, described in Attachment 7, does not need to include data that is already in the public domain but may include such information by reference.
175. Regarding Attachment 7, please clarify (i) what "comprehensive metadata" is required to be submitted with the Plan. (ii) what form of submission is expected for items such as, maps, tables, datafiles, etc., and (iii) in what manner the NJBPU would like the required information to be submitted (upload to platform, link to developer site, etc.).
RESPONSE: Applicants should refer to metadata requirements recommended by the Federal Geographic Data Committee at fgdc.gov.
Applicants are responsible for identifying the federal, regional, and state data repositories that Applicants intend to be the destination for all site and environmental data. See Attachment 7 for further information. Applicants may use their discretion on the form of data submission so long as it meets the SGD requirements, including Attachment 7, and is consistent with any requirements established by the data platform that will be the repository for the shared site and environmental information.
Applicants are permitted to use any manner of submission, provided that the Board and NJDEP are able to fully access the information without additional costs.
176. Regarding Section 2.6 of the SGD, which states: "Not less than three months prior to each Critical Milestone, the Qualified Project may petition the Board to extend any of the Critical Milestone dates if, for good cause, the Critical Milestone cannot be achieved by the date specified in the compliance filing. The Qualified Project may request a one-time as-of-right extension of a Critical Milestone of up to three (3) months upon written notice to Board Staff. Extension of Critical Milestone dates beyond the three-month extension period are subject to Board approval."
RESPONSE:
177. Regarding Section 2.6 of the SGP, which states: "If a Qualified Project misses a Critical Milestone in any of the three categories above, the Qualified Project shall forfeit an amount equal to the total Commitment Security posted for that category, multiplied by the percentage value assigned to each relevant Critical Milestone, as set forth above." In case of an OSW Project with a Tier 1 Investment Commitment that misses Critical Milestone 1: 50% of its security has been posted, and 20% of that security is forfeited. Can the NJBPU clarify what happens with the 30% remaining? Would that amount be released by the NJBPU and returned to the developer? Under which conditions?
RESPONSE: If a Qualified Project misses Critical Milestone 1 for a Tier 1 Investment Commitment, the amount forfeited is 20% of the total Commitment Security of the Tier 1 Investment Commitment, not 20% of the total Commitment Security posted at that time.
The remaining amount of the Commitment Security remains in place and would either be forfeited if additional Critical Milestones are not met, or returned/released to the Qualified Project.
178. Regarding Section 2.6 of the SGD, which states: "If a Qualified Project misses a Critical Milestone in any of the three categories above, the Qualified Project shall forfeit an amount equal to the total Commitment Security posted for that category, multiplied by the percentage value assigned to each relevant Critical Milestone, as set forth above." With regards to the Prebuild Infrastructure performance guarantee, if a developer were unable to meet critical milestone one 1 (all permits secured) and could not secure the required extension, it is very unlikely that they would be able to meet their original (compliance filing) critical milestone 2 (50% of construction achieved. Would the BPU allow full revision of the critical milestones and prevent a cascading forfeiting of securities when the developer defaults on critical milestone 1?
RESPONSE: The Board would not automatically allow for full revision of the Critical Milestones to prevent a cascading forfeiture of securities. The Qualified Project may petition the Board to extend any of the Critical Milestone dates if, for good cause, the Critical Milestone cannot be achieved by the date specified in the compliance filing.
179. Regarding Section 2.6 of the SGD, which states: "If a Qualified Project misses a Critical Milestone in any of the three categories above, the Qualified Project shall forfeit an amount equal to the total Commitment Security posted for that category, multiplied by the percentage value assigned to each relevant Critical Milestone, as set forth above." Will the BPU consider provisions providing for the return of performance guarantees funds drawn if, subsequent to the drawing of such funds, the OSW Developer cures and ultimately satisfies the applicable milestone, even if not timely, or, in the alternative, if the OSW Developer ultimately achieves the final milestone? The ability to recapture funds drawn as a result of a missed milestone can be viewed as an additional incentive for the OSW Developer to work to timely achieve the final milestone. Such provisions could allow for either (i) full refund for better incentive, or (ii) partial refund, with a portion retained to compensate for harm caused to other OSW projects' schedules, as reasonably demonstrated to the BPU.
RESPONSE: Applicant will have the opportunity to cure any failure to satisfy a Critical Milestone. Once an Applicant forfeits all or a portion of the Commitment Security for each Critical Milestone, such forfeiture cannot be reclaimed.
180. Regarding Attachment 11, which states: "Operation and implementation of the OTN are not known at this time and therefore not addressed herein." Is it known which Developer will be responsible for operating the OTN link between two OSPs?
RESPONSE: No, the operator of the OTN is to be determined at a future time.
181. Regarding Attachment 11, which states: "...additional pricing considerations related to OTN equipment and other factors will be established by the Board." Can the NJBPU clarify on what basis these costs shall be calculated? E.g., regulated costs, actual costs incurred, other? Additionally, how will costs and lost earnings associated with down-time or delay of the OSP and associated OSW Project caused by the installation, hook-up and commissioning of OTN equipment be incorporated in the calculation? Will OSW Projects be compensated for such losses?
RESPONSE: BPU Staff takes no position at this time regarding how future OTN costs would be defined and then accounted for in establishing compensation for OTN equipment. Attachment 11 establishes the excludability of OTN costs, with the exception of the cost of the additional space on the offshore platform, in the OREC offer price in Solicitation 3. Consideration of how costs or lost earnings may be recognized in price considerations would be subject to Board determination when the Board authorizes a Qualified Project to connect to an OTN.
182. Regarding Attachment 11, which states: "...the reservation of space on OSP to accommodate future installation of equipment (i.e. additions of OTN tie cables and operation)." Does the reservation of space only mean deck space or does this include:
RESPONSE: The reservation of space to enable OTN entails deck space only.
183. The response to Question 28 statese: "Future OTN implementation should only require in-water activities for installing interplatform cabling; no new in-water activity should be required regarding installation of switchgear, controls, and cable terminations." The size, weight and complexity of the equipment will require crane and/or accommodation vessels (jack-up and/or floating). Is this considered an in-water activity or exempt, similar to cable installation?
RESPONSE: Future OTN implementation will be subject to the terms and conditions incorporated in a future Board Order covering the technical configuration and commercial use of the OTN. Vessels needed for installation of future OTN equipment on the OSP would not be considered new in-water activity.
184. May all project work performed in federal waters by workers based out of facilities located in New Jersey be considered as "in-State jobs", "in-State labor expenditures", and "in-State total expenditures"?
RESPONSE: No. Only work performed in federal waters by New Jersey residents based out of facilities in New Jersey would be considered in-state jobs, in-state labor expenditures, and in-state total expenditures. For work performed in federal waters by temporary workers from other U.S. states or other nations based out of facilities in New Jersey, only their per diem and other personal expenses are counted instead of their entire wages or salaries.
185. Can the BPU confirm that all land lease costs, including at ports (including the New Jersey Wind Port) and for right-of-way concessions, are excluded from economic model input values and spending guarantees? We note that allowing lease costs for port facilities and other productive locations within the state as part of the economic model input values and spending guarantees are a significant incentive to developers to pursue in-State facilities for the projects. In addition, these payments often incent use of currently underutilized assets and therefore represent some of the highest quality economic benefits to be derived from the project.
RESPONSE: Yes, land lease costs at existing or under construction facilities are excluded from economic model input and values and spending guarantees as such costs do not incentivize development. Land lease payments are transfer payments instead of a driver for new economic activity. If the Applicant provides financing or initial land lease payments sufficient to pay for a portion of the development of a new in-State port or other facility, those expenditures may be regarded as capital expenditures for a Tier 1 facility.
186. At the BPU Bidder's Conference, MAOD presented a slide with the LCS Circuit Energizations for Backfeed, with the following dates:
RESPONSE:
RESPONSE: Not at this time.
188. Please clarify the statements on the bottom of page 28 of the SGD that relate to spending and jobs guarantees. As stated in the SGD, the SGD can be interpreted to require a spending guarantee that is completely separate from the jobs guarantee. However, the amount spent on a project and the jobs that are created by a project are interpreted and having separate guarantees can lead to a "double-count". For example, a shortfall in spending of $100,000 on the project that would have employed one FTE will appear as both a $100,000 spending shortfall; and a shortfall of one job. Asking the Project to separately and fully make-up for both would amount to an overpayment ("double count"). Based on the above considerations, (for both development/construction and for operations): may bidders provide guarantees for spending and jobs that avoid this double count problem?
RESPONSE: Applicants are not allowed to provide guarantees for in-state spending and jobs that deviate from the requirements specified in the SGD. The "double counting" referenced above incentivizes Applicants to ensure that both their in-state spending and in-state jobs guarantees are achievable and realistic because each is a distinct metric used in the evaluation of Applications.
189. Referencing Solicitation Guidance Document Att-1-Application-Form worksheet 'Economic Impacts' cells G10:J10 and cells L10:010, can you please provide a more complete description of the values that should be provided in these columns? At a minimum, please confirm the following:
RESPONSE: The Application Form has been revised for the referenced 'Economic Impacts' worksheet table. The restructured table now includes "Total Expenditures" columns for In-State Construction and Operation phases, and an added heading row to clarify that all expenditure components are limited to In-State expenditures.
190. If activities are expected to occur after 2060, please confirm how those values are expected to be incorporated into the Solicitation Guidance Document Att-1-Application-Form.
RESPONSE: The Application Form has been revised to extend the last year to 2075 to allow additional entries.
191. Referencing Solicitation Guidance Document Att-1-Application-Form worksheet 'Economic Impacts' cells D54:E54, G54:H54, J54:K54, and M54:N54, please confirm that Applicants should provide the local labor cost and the total local cost only. For the avoidance of doubt, please confirm that the difference between the total local labor cost and total local cost should equal the sum of local material/equipment, supply chain, and transfers to govt/non-profit expenditures.
RESPONSE: The Application Form has been revised for the referenced 'Economic Impacts' worksheet table. The revised table's column headings (now in rows 68-69) omit the Decommissioning Phase guarantee values and omit In-State Labor Expenditures for the Development, Construction, and Operation Phases. The revision is consistent with the guaranteed metrics stated in the Solicitation Guidance Document.
The table has been restructured to include separate values for In-State Jobs Creation and In-State Total Expenditures in post COD years 1-5 and years 6-10 to allow for differences between early and later operations periods that result from projects with multiple capacity tranches reaching COD and between OEM warranty service agreements in early operation years and no service agreement in later years.
Confirmed that if local labor cost was still included in the table that the difference from total local cost would be the sum of local material/equipment, supply chain, and transfers to government/non-profit expenditures.
192. Referencing Solicitation Guidance Document Att-1-Application-Form worksheet 'Economic Impacts', please confirm that there are no cells identified to provide the direct labor income or direct value added.
RESPONSE: The Application Form has been revised to include direct labor income and direct value added in the 'Economic Impacts' worksheet table renamed "Expected Annual Total Direct, Indirect, and Induced In-State Economic Effects."
193. Can the NJ BPU explain the basis of the schedule for the Tier 1 commitment securities? i.e. why does a Performance Guarantee for the Tier 1 Investment have to be posted just before (60 days) providing funding for the Tier 1 Investment and Performance Guarantee decreases when funding is achieved?
RESPONSE: BPU Staff will not provide additional details on the development of the schedule.
194. The IRS recently issued guidance ("Notice 2023-29") on Energy Communities (as defined by Section 45(b)(11)(B) of the IRS Code), which provide an additional 10% of investment tax credits ("ITC") for eligible projects located therein. Notice 2023-29 specifically provided an example of a qualified offshore wind facility ("Project") that is located on the outer continental shelf, and interconnects at a substation (that conditions the electricity generated by the offshore wind facility) located in an Energy Community. So long as the offshore wind facility meets the requirements, the Project may claim the additional 10% ITC - equating to hundreds of millions of dollars in ratepayer savings when compared to projects that do not qualify for this additional ITC. However, the additional 10% ITC would only apply to the nameplate capacity of the Project that interconnects at a substation located in an energy community. Further, we understand that the contemplated site for the interconnection point to the LCS (i.e., end of onshore Prebuild Infrastructure) for offshore wind projects is not located in an Energy Community. All else being equal, the required project (interconnecting at LCS) will cost more to ratepayers compared to an additional project that interconnect at an alternative POI in an energy community.
RESPONSE:
195. 195. If a developer's project PJM queue request is part of Cycle #1 in the PJM Interconnection Reform, will there be an opportunity to work with the TO/MAOD before the Phase 2 study for any required converter station design parameters?
RESPONSE: Board Staff encourages all Applicants to engage with PJM on its interconnection policies and processes and at this time is unable to answer questions regarding PJM's queue process, particularly given the status of PJM Queue reform process.
196. Subject to BPU awards under OREC solicitations and coordination with BPU, MAOD would be amenable to initiate discussions with an OREC awarded project. Please confirm that it is the BPU's intention to utilize any forfeited Commitment Security for Prebuild Infrastructure to advance the development of the Prebuild (i.e., bring in a replacement developer)?
RESPONSE: Any funds so forfeited will either be committed to development of offshore wind infrastructure, including but not limited to, as appropriate, Prebuild Infrastructure and Tier 1 Infrastructure in New Jersey or will be returned to ratepayers, at the discretion of the Board.
197. Please confirm that the BPU will allow flexibility to consider a delay for Prebuild Infrastructure if a Critical Milestone is missed as a result of reasons beyond the developer's control, such as a siting delay due to litigation from stakeholders.
RESPONSE: A Qualified Project may petition the Board to extend any of the Critical Milestone dates if, for good cause, the Critical Milestone cannot be achieved by the date specified in the compliance filing. The Qualified Project may request a one-time as-of-right extension of a Critical Milestone of up to three (3) months upon written notice to Board Staff.
198. Please confirm that if Critical Milestone 1 (permitting) is delayed and impacts the subsequent Critical Milestones, the BPU would suspend and adjust subsequent Critical Milestones appropriately, so that the project isn't at risk for 100% of the Commitment Security for a delay of the first Critical Milestone.
RESPONSE: The Qualified Project may petition the Board to extend any of the Critical Milestone dates if, for good cause, the Critical Milestone cannot be achieved by the date specified in the compliance filing. Once an Applicant forfeits all or a portion of the Commitment Security for each Critical Milestone, such forfeiture cannot be reclaimed.
199. If there is a delay that causes missing Critical Milestone 1 but that by Critical Milestone 2 the project is back on its original schedule, will the BPU return the Commitment Security from the prior Critical Milestone delay since there was no overall delay to the project?
RESPONSE: See the response to Question 198.
200. Can the BPU provide further information related to forfeiture guidelines for Prebuild Commitment Security. For example, is the BPU considering using these funds for liquidated damages to offshore wind developers that are subsequently delayed by a delay in the Prebuild Infrastructure?
RESPONSE: Any funds forfeited will either be committed to development of offshore wind infrastructure, including but not limited to, as appropriate, Prebuild Infrastructure and Tier 1 Infrastructure in New Jersey or will be returned to ratepayers, at the discretion of the Board.
201. Is the one-time "no questions asked" 3-month extension available to Prebuild Infrastructure separate from the extension available for the Qualified Project? For instance, may the Prebuild Infrastructure claim a 3-month extension for Critical Milestone 1 (receipt of permits and approvals), and the Qualified Project also claim a 3-month extension later for its Critical Milestone 1 (BOEM approval of COP)?
RESPONSE: Yes. The one-time 3-month extension available to the Prebuild Infrastructure is separate from any extension available to the Qualified Project.
202. What if the delay occurs closer to three months before the milestone? For example, if construction is underway but is halted for an uncontrollable reason? Will the BPU consider delays that are requested in less than a 3-month advanced notice?
RESPONSE: Yes.
203. Section 2.g of the SGD states: "If a Qualified Project misses a Critical Milestone in any of the three categories above, the Qualified Project shall forfeit an amount equal to the total Commitment Security posted for that category, multiplied by the percentage value assigned to each relevant Critical Milestone, as set forth above. For example, if a Qualified Project misses Critical Milestone 1 for a Tier 1 Investment Commitment, the amount forfeited shall be the total Commitment Security of the Tier 1 Investment Commitment, multiplied by 20 percentage points."
Please clarify whether a Qualified Project that missed a Critical Milestone is liable for 20% of the Commitment Security amount already posted for that category, or whether it is liable for 20% of the total Commitment Security amount for that category? As a numerical example:
RESPONSE: If a Qualified Project misses Critical Milestone 1 for a Tier 1 Investment Commitment, the amount is 20% of the total Commitment Security of the Tier 1 Investment Commitment, not 20% of the total Commitment Security posted at that time.
204. If a Qualified Project is abandoned prior to the posting of any of the 3 types of security, what is the project's liability?
RESPONSE: If a Qualified Project is abandoned prior to the posting of any of the 3 types of security, the Qualified Project would nevertheless be responsible for the full amount of the required Commitment Security.
205. Regarding Section 3.10 of the SGD, Please confirm that emissions associated with the PBI must be reported separately from the remainder of the onshore emissions for all projects options that include a PBI.
RESPONSE: Yes, the Application Form has been revised to allow for separate entries.
206. Regarding Section 3.13 of the SGD, please provide layout dimensions and shape for each converter station that MAOD is going to prepare. Will there be enough additional space for each developer to use as laydown area for equipment and heavy machinery during the construction phase?
RESPONSE: Board Staff will not be providing the layout dimensions and shape for each converter station. MAOD anticipates that generator developers would utilize their generator area as a laydown area.
207. Question 93 and its response are confusing. Please confirm that only one Narrative is expected per Application, covering all bid alternatives (including an Applicant's plan to connect to the POI with or without pre-build infrastructure) proposed by an Applicant or its affiliates.
RESPONSE: Yes, only one Application Narrative is expected per Applicant. The Application Narrative must cover all Project alternatives.
208. We have noticed that in certain answers the BPU has stated guidance that conflicts with the SGD. Please clarify whether in such situations the guidance stated in the answers supersedes the SGD?
RESPONSE: Insofar as stated guidance in the SGD is not in accordance with answers to questions posted on the Solicitation Website, the Board reserves the right to redress any inconsistencies or information gaps on a case by case basis.
209. The definition of "Project" in the SGD and associated references infer that Prebuild Infrastructure is separate from the Project. Please confirm that for SGD prompts that mention Project and not Prebuild Infrastructure, developers are not expected to discuss Prebuild Infrastructure.
RESPONSE: Confirmed. The definition of "Project" in the SGD does not include the Prebuild Infrastructure.
210. Please confirm that Applicants will be able to upload zip folders to the portal for submission as part of their Application.
RESPONSE: Yes, the submission portal will allow Applicants to upload zip files.
211. For the purpose of calculating operational expenditures of the Prebuild Infrastructure, please confirm that Applicants should assume the cost of maintaining all of the Prebuild Infrastructure through the OREC term and/or full useful life of the Prebuild Infrastructure. If that is not the case, please advise if Applicants should assume that ownership of the Prebuild Infrastructure will be transferred at some point. If Applicants should assume a transfer, for the purpose of cost estimation, please advise when Applicants should assume that will occur.
RESPONSE: Applicants should incorporate all operating expenses associated with the Prebuild Infrastructure over the OREC term, including OpEx related to maintenance. Ownership of the Prebuild Infrastructure may subsequently be transferred to another entity, subject to Board approval. Any future owner(s) of the Prebuild Infrastructure will be subject to all terms and conditions set forth in any Board award. See Attachment 10.
212. Please confirm that Applicants should assume the cost of decommissioning all of the Prebuild Infrastructure for the purpose of providing cost estimates for decommissioning.
RESPONSE: See the response to Question 170.
213. If a Project is expected to incur little to no transmission system upgrades, and thus elects to forego TSUC, please advise how Applicants should address rows 19-28 in the Application Form tab titled "OREC Pricing Schedule."
RESPONSE: The Application Form has been revised to allow Applicants to indicate if they elect to forego TSUC.
214. 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: No. Only the value-added portion of a product or service produced at a New Jersey facility by in-state workers can be claimed as in-State spending.
215. Please confirm that "In-State expenditures" as listed in SGD Section 4.2 can be broader than the in-State spending categories listed in Section 3.8. If this is so, what are the requirements to be a New Jersey business?
RESPONSE: Confirmed. SGD Section 4.2 relates to the guaranteed amounts of all in-State expenditures and jobs that contribute to additional economic value to New Jersey businesses and workers. These expenditures and jobs span the entire economic system of New Jersey. In contrast, SGD Section 3.8 focuses on investments in infrastructure, supply chain facilities, labor force development and other in-State investments that contribute to the development of New Jersey as a regional hub for the offshore wind industry. In both sections, a New Jersey business is one that has at least one New Jersey establishment that contributes to the New Jersey economy by producing goods or services as well as employing New Jersey workers.
To be considered a New Jersey Business, the business must:
216. The response to Question 115 confirms that "The value of in-state expenditures for components of a Qualified Project should be reported in column F of the "Bill-of-Goods" tab (see pages 14-15 of the Application Form included as Attachment A under the heading "In-State Cost ($ Mil)")." Should the value of expected expenditures for components of a Qualified Project, to be provided by an in-state supplier, also be reported within the Application Form's "Economic Impacts" tab under the heading "In-State Expenditures: Supply Chain Purchases"?
RESPONSE: Only the in-State expenditures, meaning costs paid by the in-State supplier to in-State firms and workers are to be reported in the "Economic Impacts" tab under the stated heading.
217. For cumulative jobs and spend over the operations term, are Applicants limited to discussing values for the 20-year OREC term (as opposed to the Project's full expected lifetime). If an Applicant chooses to present cumulative values for the Project's lifetime, please confirm that the BPU will use that for informational purposes only and the only binding values for the operations phase are job guarantees and spend guarantees reported on an annual basis over the OREC term.
RESPONSE: Confirmed. The Board will use annual binding values that pertain to jobs and expenditures guarantees over the 20-year OREC term.
218. Please confirm that MAOD has not met (and is not meeting or communicating directly) with Applicants, and instead, communication for all Applicants with MAOD is only through the BPU Q&A process.
RESPONSE: Yes, communication for all Applicants with MAOD is only through the BPU Q&A process.
219. If a developer produces more than the Annual OREC Allowance, is there any delivery limitation on the Project into LCS? Does the developer have the right to retain all merchant revenues associated with energy generated above the Annual OREC Allowance?
RESPONSE: A developer of a Qualified Project will have the right to retain up to 25% of merchant revenues generated after the Annual OREC Allowance is met, subject to each OREC's qualification life for any quantity that is a carryover from the previous year's Annual OREC Allowance. See N.J.A.C. 14.8-6.5(a)(12)(ix). "Merchant revenue" is defined as revenue from the sale of energy, capacity or ancillary services.
Response was revised and clarified on July 20, 2023
220. The response to Question 117 says, in part, "If multiple Applicants plan on using the same new supply chain facility then the "In-State Expenditures" Capital Investments ($ Mil)" in each application should report its individual direct contribution to the facility capex."
Acknowledging:
RESPONSE:
221. If BPU does not approve the extension of a critical milestone, does the Applicant face any other aspects of default within the Board Order (for example, risk of not being allowed to sell ORECs per the Board Order), or is the only penalty the forfeiture of the respective amount of commitment security?
RESPONSE: The penalty borne by the Applicant is limited to the forfeiture of the relevant Commitment Security, except in the case of the completion of the Project if selected as a Qualified Project or the Prebuild Infrastructure. In those cases, the Qualified Project must petition the Board for approval of an extension to the Qualified Project's COD or the Prebuild Infrastructure COD. If the Board does not approve the extension request, the Qualified Project's OREC term will be shortened by the amount of the unapproved extension.
222. Please confirm that BPU will continue to accept questions after the May 12 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 12 deadline?
RESPONSE: After May 12, 2023, Applicants can submit requests for clarifications to the Board's responses to Questions. Applicants are not permitted to ask new questions after May 12, 2023.
223. The Performance Guarantee requirements for Prebuild Infrastructure, which is equal to 100% of the proposed cost of the Prebuild Infrastructure and to be posted within 60 days of the Board Order, represents a very significant cost and risk profile, to be held by the developer years in advance of FID. This amount will be well in excess of the additional $75,000/MW originally proposed in the draft SGD and significantly greater even than the Performance Guarantee without the Prebuild Infrastructure. Can the Board amend the Prebuild Infrastructure Performance Guarantee amount to be more in line with typical commitment securities and to allow developers to offer more efficient terms for the benefit of ratepayers?
RESPONSE: The Performance Guarantee requirements for Prebuild Infrastructure have been established. The Board does not intend to revisit the Critical Milestones and related Performance Guarantees that apply to the Prebuild Infrastructure.
224. Alternatively, we understand the intent of the very high Prebuild performance guarantee is intended to be protective to the offshore wind developers who are not the Prebuild developer. Would the Board support proposed contractual mechanisms that meet this objective, to allow for a corresponding lower performance guarantee to be posted by the Prebuild Developer?
RESPONSE: See the response to Question 223.
225. The Prebuild Infrastructure represents a different type of infrastructure project than an offshore wind project, and it has a different risk profile. Can the Board amend the SGD so that Applications can be submitted without Prebuild Infrastructure projects? At a minimum, can the Board amend the SGD so that it is not a requirement that each Project must include an option for the construction of the Prebuild Infrastructure (i.e., Applicants can submit at least some Projects that do not include an option for the construction of the Prebuild Infrastructure)?
RESPONSE: All Applicants must submit a proposal, separate from a Project proposal, to construct and own/operate the Prebuild Infrastructure.
226. If the Prebuild Infrastructure developer is prevented from developing its offshore wind project, whether by changes in law or economic conditions, and is thereby prevented from selling the Board ORECs, how does the Prebuild Infrastructure developer recover its costs for construction of the Prebuild Infrastructure? Can the Board propose an alternative mechanism for the recovery of costs associated with the Prebuild Infrastructure?
RESPONSE: Compensation for the costs associated with the Prebuild Infrastructure is dependent on the delivery of ORECs from the developer's Qualified Project. Absent such delivery there is no compensation available to the Prebuild owner. However, the Prebuild Infrastructure developer may petition the Board for the approval of the transfer of the Prebuild Infrastructure to another Eligible Project.
227. Can you confirm if the SAA Project has been chosen to develop the Prebuild infrastructure, or if a decision should be expected by the application deadline?
RESPONSE: MAOD, the owner of the SAA project, has not been chosen to develop the Prebuild Infrastructure.
228. Can NJBPU please clarify its definition for "direct jobs"? Should proposers assume direct jobs are inclusive of jobs created by investing in a new tier 1 or tier 2 supply chain facility? Jobs created through workforce development programs? Or are they limited to those jobs directly hired by the Developer for development, construction, and operations roles? If limited to those direct hires by the Developer, would NJBPU like the Developer to provide estimates of direct jobs attributable to new supply chain facilities and workforce development programs separately?
RESPONSE: Applicants may include jobs created by investment in a new Tier 1 or Tier 2 supply chain facility. If the Applicant only provides partial investment its investment share should be used to calculate a pro rata number of supply chain facility jobs created. Jobs created by investing in a new Tier 1 or Tier 2 supply chain facility should be entered in the Application Form and proposal narrative tables with a separate facility label than those created by the OSW facility itself. This broad definition differs from the standard economic input-output analysis definition which categorizes the jobs for the production of products and services in other industries as "indirect jobs." Our exception to that standard definition is based on economic control and investment in new supply chain facilities by the Applicant.
229. Section 3.8 of the SGD states "Applicants must propose workforce development remedies that will apply if the jobs guarantees are not met, subject to Board approval, to support job creation in New Jersey equal to or greater than the guaranteed values." Can NJBPU please clarify if workforce development remedies would include the funding of developer and / or state sponsored workforce development programs that support job creation, or does it require the creation of and hiring for a specific job?
RESPONSE: The funding of developer and/or state sponsored workforce development programs that support job creation, is an acceptable remedy, subject to Board approval.
230. According to Section 3.16 of the SGD, "segregated decommissioning funds" are required. Please clarify whether Applicants can fulfill this requirement by posting a security commitment that is consistent with the principles outlined in Section 2.6.
RESPONSE: Yes, Applicants will be permitted to post security to cover the segregated decommissioning funds.
231. Regarding Section 4.1 of the SGD, please clarify how the Evaluation Criteria will account for inflation exposure on OREC pricing between different projects? Can the NJBPU consider changing the Evaluation Criteria to be based on ORECinf as defined in Section 1.2?
RESPONSE: The Evaluation Criteria described in section 4.1 will be based on the ORECbase price schedule as bid.
232. Regarding Section 4.1 of the SGD, please clarify how the impact of the inflation adjustment mechanism will be taken into account in the Price evaluation of offers. As stated in Section 4.1, "The evaluation of OREC Purchase Prices will be based on the non-inflation adjusted levelized price per MWh. The quantitative impact of the total award capacity on the level of Ratepayer Impacts will be considered in the selection of Qualified Projects," and in response to Question 79, the NJBPU states that: "Board Staff will evaluate PVNOC and LNOCs in performing a standardized comparison among all Applicants. To promote standardization, Board Staff derives LNOCs, which equal the Project's OREC purchase price adjusted for the TSUCPA, if applicable, and the value of capacity, energy, and RECs. Ratepayer impacts are based on PVNOCs and NJ EDC retail load aggregated among four EDCs for residential, commercial, and industrial customers based on recent New Jersey load data. The retail rate impact is stated in 2023 dollars." Based on this response, we understand that price standardization will only take into account a Project's purchase price adjusted for the TSUCPA, if applicable, and the value of capacity, energy, and RECs; specifically excluding the inflation adjustment of the OREC price. This evaluation frame does not provide for a fair standardization of prices between Applicants - unfairly penalizing mature projects, and it omits the impact of up to 15% of inflation on the final price to be paid by ratepayers.
The following numerical example illustrates this issue:
| Project Name | COP Approval Date | ORECbase (USD/MWh) | Inflation Adjustment Coefficient | ORECinf (USD/MWh) |
| Project A | 100.00 | 2024 | 1.001 | 100.1 |
| Project B | 100.00 | 2027 | 1.061 | 106.1 |
| Project C | 94.34 | 2027 | 1.061 | 100.1 |
RESPONSE: See the response to Question 231.
233. The response to Question 79 states that "Project's OREC purchase price adjusted for the TSUCPA, if applicable, and the value of capacity, energy, and RECs." Please specify if the price will also be adjusted for inflation, as this element was not included in the answer.
RESPONSE: See the response to Question 231.
234. The Draft SGD indicated that details regarding the footprint, land development plan, general cable layout, technology design, and more for up to four separate HVDC converter sites near the Larrabee Collector Station would be provided in the Final SGD. However, this information has not yet been provided. Can the BPU please advise when it will be providing this information as it is necessary for the Applicants' to advance their onshore converter designs?
RESPONSE: See Larrabee Collector Station Indicative Layout.
235. Please confirm where the demarcation would be on the AC side. More specifically, please confirm if it will be (a) open breaker disconnect switches, with the developer then responsible for the conductors from the converter hall to the open breaker disconnects, or (b) if MAOD plans to make the connection from the yard to the converter AC side themselves.
RESPONSE: The AC side demarcation is planned to be at the MAOD installed termination structure (AC interface) located within each converter station area.
Developers will be responsible to connect their equipment to this termination structure, including the supply of all necessary AC equipment on the converter station. From this location, MAOD would make the connection to the AC switchyard.
See the Board's June 29, 2023 Order, under BPU Docket QO20100630, for more information.
236. Attachment 10, page 5 says that: "For purposes of targeting Maximum Power Delivery, Applicants should consider a target nameplate of up to 1,500 MW for each Circuit, with a voltage of 400 kV, or, perhaps, 525 kV, as a technical proxy specification to support flexibility going forward." Engagement with export cable OEMs has indicated that 1,500 MW capacity is not feasible at the 320 kV voltage level due to thermal and soil resistivity limitations. If the proposed prebuild design will meet 1,500 MW capacity requirement at 525kV but not at 320kV or 400kV, would BPU consider this compliant?
RESPONSE: The Prebuild design must be capable of accommodating 1,500 MW per circuit, unless otherwise specified. The initial system installed in the Prebuild may not be rated for 1,500 MW, but should be upgradeable to 1,500 MW without needing to modify the Prebuild design. Applicants should indicate the design parameters, including circuit voltage and ampacity, required to make that feasible.
237. Attachment 10, page 5, says that each circuit should be designed for 525kV and be downward compatible. To reduce prebuild infrastructure costs, can we optimize circuit design for any prebuild circuit our own proposed project will use? For example, if our project is 320kV, can we reduce the conduit size, reduce the number of conduits, and increase the length between splice vaults for the circuit that our project will use only? The other circuits would remain designed for 525kV.
RESPONSE: Yes, Applicants may include Prebuild Infrastructure proposals that optimize circuit designs for the Applicant's individual proposed Project, provided the Applicant details why it has chosen to depart from the minimum requirements set forth in Attachment 10 to the SGD for the specific circuit. The Applicant must provide detailed justification for the change in design that varies from the minimum requirements. All other circuits that are not proposed to be utilized by the Applicant must meet the SGD minimum requirements.
238. Can files be deleted from the Application submission portal?
RESPONSE: Applicants will be permitted to delete files from the portal until the Application Submission Deadline, at which time the files currently active will be moved to a read-only subfolder. Applicants will still be able to view the files but will not be able to delete or add files following the Application Submission Deadline. A similar approach will be used for Clarifying Question responses, insofar as these responses will be moved to a read-only subfolder.
239. Regarding Question 227, please confirm that BPU's response should be interpreted to mean that BPU has not made a decision "yet" on whether MAOD or another entity will be responsible for the Prebuild Infrastructure. Conversely, please advise if BPU's response should be interpreted to mean that definitively MAOD will not be the Prebuild Developer.
RESPONSE: The Board has not made a determination on the entity that will be responsible for developing the Prebuild Infrastructure.
240. Regarding Question 225, please confirm that the reference to the "separate" Prebuild and Project proposals is intended to refer to the fact that the definition of "Project" does not include the Prebuild Infrastructure (as stated in Question 209), and just one Application is required. To that point, please confirm that BPU did not intend its response to change the requirements of the SGD, and that the statement in the SGD that says "Additionally, each Project must include an option for the construction of the Prebuild Infrastructure..." remains true.
RESPONSE: Yes, confirmed that this interpretation is correct.
241. Regarding Question 191, please confirm that guarantees in the Operation phase must be presented on a total basis for years 1-5 and on a total basis for years 6-10 (as stated in Question 191 and shown in the revised Application Form), and not presented on an annual basis (as stated in the SGD).
RESPONSE: Confirmed, the value entered in the Application Form should be the total of the years in each period.
242. Regarding Question #167, please confirm whether the $200,000 value added in your example would be considered in-State direct expense whether the value is added by the Tier 1 contractor or one of its subcontractors. For example, if the $200,000 in value for NJ-based services such as in-State transportation, warehousing, procurement, and engineering services are performed by subcontractors of the NJ entity in New Jersey, are they all considered in-State direct expenses?
RESPONSE: Yes. The $200,000 value added in the example would be considered in-State direct expense whether the value is added by the Tier 1 contractor or one of its subcontractors.
243. Regarding Question #228, please confirm that Applicants may include their pro rata number of jobs created for both (1) their share of construction jobs associated with their investment in the construction or expansion of a new facility in New Jersey and (2) their share of supply chain facility jobs associated with their purchase of goods from the new facility.
RESPONSE: Yes. Applicants may include their pro rata number of jobs created for their share of construction jobs associated with their investment in the construction or expansion of a new facility in New Jersey as direct jobs. Applicants may include their share of supply chain facility jobs associated with their purchase of goods from the new facility as indirect jobs.
244. Regarding Question #228, please confirm that all pro rata jobs associated with the Applicant's procurement of products from a new Tier 1 or Tier 2 facility are considered "direct" regardless of whether the Applicant provides a direct investment in the new Tier 1 or Tier 2 facility.
RESPONSE: Jobs associated with the Applicant's procurement of products from a new Tier 1 or Tier 2 facility are considered "indirect" jobs regardless of whether the Applicant provides a direct investment in the new Tier 1 or Tier 2 facility.
245. Regarding Question #184, please confirm that BPU's response also applies to in-State expenditures for vessels. In other words, please confirm that the following is true: Work performed in federal waters by vessels based out of facilities in New Jersey would be considered in-State total expenditures. For work performed in federal waters by vessels from other U.S. states or other nations based out of facilities in New Jersey, only their per day rate are counted instead of their entire cost.
RESPONSE: Yes. BPU's response also applies to in-State expenditures for vessels.
246. Regarding Question #184, please confirm that all work performed in state waters counts as in-State jobs and spend.
RESPONSE: Work performed in state waters by New Jersey residents based out of facilities in New Jersey would be considered in-state jobs, in-state labor expenditures, and in-state total expenditures.
247. Regarding Question #215, please confirm that a person that resides in New Jersey but is supporting the project from a location in another state (for example, an office or port in New York) counts as an in-State job.
RESPONSE: No. A person that resides in New Jersey, but is supporting the project from a location in another state (for example, an office or port in New York) would not count as an in-State job.
248. Regarding Question #219, please clarify what it meant by the reference to "retain all merchant revenue." Does that mean that a developer can keep 100% of the merchant revenue associated with energy delivered in excess of the OREC allowance? Please provide a working example using hypothetical numbers and the formula defined in Question #166.
RESPONSE: The answer to Question #219 has been revised and clarified. A developer of a Qualified Project will have the right to retain up to 25% of merchant revenues generated after the Annual OREC Allowance is met, subject to each OREC's qualification life for any quantity that is a carryover from the previous year's Annual OREC Allowance. See N.J.A.C. 14.8-6.5(a)(12)(ix). "Merchant revenue" means revenue from the sale of energy, capacity or ancillary services.
249. In the response to Question #184, BPU states: "Only work performed in federal waters by New Jersey residents based out of facilities in New Jersey would be considered in-state jobs, in-state labor expenditures, and in-state total expenditures." We have the following clarifying questions:
RESPONSE:
250. Regarding Question #167, please provide an answer to the second part of the posted question. Specifically, would raw materials (as opposed to manufactured goods) such as steel or iron sourced from US mills be considered as part of the in-State spend?
RESPONSE: While steel or iron sourced from any United States mill is encouraged, steel or iron sourced from mills outside of New Jersey would not be considered in-State spend.
251. Has there been any change/update to NJEDA's leasing plans for parcels G and C further to the NJWP Prospectus?
RESPONSE: The NJEDA remains in negotiations with parties further to the issuance of a 2021 Notice to lease, however the NJEDA has not yet reached binding terms with any party for either parcel. Should the NJEDA not reach binding terms in a reasonable period of time it will re-open the process for submitting non-binding offers to lease parcels G and C. Bidders considering proposing local content uses that include parcels G and/or C should note that NJEDA cannot guarantee those parcels will be available to lease, or that a bidder will be successful in securing a lease further to a future NJEDA Notice to lease process.
252. NYSERDA pushed the award notification date for their solicitation out to Q4 2023. Given the potential issues this updated award timing may cause for contingent bids, does the BPU have any plans to reconsider the "Applicant Notification Deadline to Board Staff on Contingent Projects?"
RESPONSE: Staff recognizes that the change to NYSERDA's schedule may affect the schedule for addressing Board Staff's evaluation of a Contingent Project. Staff will consider a change to that schedule as part of the evaluation process.