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In the Matter of Customer On-Site Renewable Energy (Core) Program

March 31, 2011

IN THE MATTER OF CUSTOMER ON-SITE RENEWABLE ENERGY (CORE) PROGRAM REBATE APPEAL: ACFD DEVELOPMENT, L.L.C., PETITIONER-APPELLANT, AND ENGLISH CREEK SELF STORAGE, PETITIONER.


On appeal from a Final Decision of the New Jersey Board of Public Utilities, Docket Nos. EO09070550 and EO09070551.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 1, 2011

Before Judges Yannotti and Espinosa.

ACFD Development, L.L.C. (ACFD) appeals from a final decision of the Board of Public Utilities (Board) dated December 1, 2009, which denied ACFD's application to increase the amount of rebates awarded to it for two of its solar energy projects, and denied ACFD's application for an evidentiary hearing in the matter. We affirm.

In 1999, the Electric Discount and Energy Competition Act, N.J.S.A. 48:3-49 to -98 (EDECA), was enacted. EDECA authorized gas and electric utility companies to impose a societal benefits charge upon their ratepayers, which would be used for, among other things, energy efficiency (EE) and renewable energy programs (RE), as determined by the Board. N.J.S.A. 48:3-60(a)(3).

The Board has, from time to time, issued orders setting the funding levels and budgets for the EE and RE programs. The Customer On-Site Renewable Energy (CORE) program is among the RE programs that the Board has established. The CORE program provides financial incentives or rebates to public utility customers who invest in, among other things, solar photovoltaic (PV) energy systems.

It appears that the CORE program experienced what the Board considered "exponential growth and overwhelmingly high participation rates," and applications exceeded available funding. The Board issued an order dated February 13, 2006, which directed its staff to hold all private sector rebate applications "in queue" until budgeted funds became available as a result of cancellation or expiration of previously issued rebate commitments, or as additional funds were transferred to the CORE program budget.

At its meeting of March 13, 2006, the Board approved policies and procedures for the CORE program queue, which were memorialized in an order dated March 22, 2006. The Board's order stated that once a rebate application was received, reviewed and deemed complete, the applicant would receive a letter from the Office of Clean Energy (OCE) indicating that the project had been placed in queue. The March 22, 2006, order also stated that placement of a project in a queue was intended to establish the project's "place in line," should CORE funding become available.

On March 1 and March 13, 2006, ACFD submitted applications for rebates for solar PV energy projects for its buildings in English Creek and Pleasantville, New Jersey. ACFD sought a rebate of $489,042.40 for the English Creek project, which has a 144.768 kilowatt (kW) capacity; and a $2,031,093.20 rebate for the Pleasantville project, which has a 650.624 kW capacity. The OCE informed ACFD that the applications had been placed in queue.

In late 2007, more than $126 million in rebate applications remained in queue, while the estimated budget for these projects was only $57 million. In August, September and October 2007, the Board's Renewable Energy Committee, the OCE and others reviewed various preliminary CORE budget allocations for 2008. The proposed allocations were distributed for comments by "stakeholders" on the allocation of CORE monies.

The Board issued an order dated December 6, 2007, which limited new rebate approvals for private sector solar energy projects with a capacity of 100 kW or more to $245,000. According to the Board, this limitation would prevent oversubsidization of large projects, should they receive both the CORE rebate and funding through the use of solar renewable energy certificates (SRECs). In June 2008, the Board's "Market Manager" issued commitment letters to ACFD indicating that it would receive rebates of an estimated $245,000 for each of the English Creek and Pleasantville projects.

By letter dated April 15, 2009, ACFD's counsel informed the Clean Energy Program (CEP) Coordinator that it could not come to a "fruitful" resolution of the dispute concerning the "appropriate rebate level[s]" for the two projects. Counsel stated that the CORE rebates had been substantially and retroactively reduced without prior notice and an opportunity to be heard, and that the rebates had been reduced after ACFD had made contracts and incurred substantial financial obligations. The CEP Program Coordinator responded in a letter dated April 22, 2009, and explained the Board's reasons for limiting the rebates. The Coordinator advised ACFD's counsel that if ACFD wished to pursue the matter further, it could file a formal petition with the Board.

On July 20, 2009, ACFD filed a petition with the Board. It asserted that the $245,000 CORE rebate cap for solar (PV) energy projects of 100 kW or more was arbitrary. It said that the English Creek and Pleasantville projects had been in queue for an "unconscionable" amount of time, during which time it continued to develop the facilities at "substantial cost." ACFD also said that the Board had imposed the rebate cap "without regard" to the extent by which the solar energy ...


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