New Jersey Senators Advance Bill to Boost Transmission-Scale Energy Storage Development

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**News Flash**
**Smith, Burzichelli Bill to Stimulate Transmission-Scale Energy Storage Development Advances**

**TRENTON** – The Senate Budget and Appropriations Committee has advanced legislation from Senator Bob Smith and Senator John Burzichelli aimed at establishing a program through the Board of Public Utilities (BPU) to procure and incentivize the development of transmission-scale energy storage systems.

Essentially, energy storage systems are technologies that store generated energy for later use. For instance, solar panels and wind turbines generate energy only when conditions permit, such as sunlight or wind. When these conditions are not optimal, the energy output may not meet the demand at that moment. Energy storage systems capture surplus energy for use during high-demand periods or when generation is low, thus reducing energy costs, enhancing grid resilience, and ensuring the reliability of various energy types.

“The benefits of energy storage systems cannot be overstated. They enable a broader application of clean, renewable energy and can significantly reduce energy costs by storing energy during low-demand hours and releasing it when demand is high,” stated Senator Smith (D-Middlesex/Somerset). “As projected energy demand and electricity costs continue to rise, investing in these systems becomes increasingly crucial for achieving cost savings.”

The bill, designated as S-4289, defines “transmission-scale energy storage systems” as systems capable of at least five megawatts (MW) of storage that are interconnected to the PJM Transmission Network. These systems must either be located within a Transmission Zone in New Jersey or otherwise qualify to provide services in the wholesale markets established by PJM. The legislation empowers the BPU to create a program offering long-term, stable financial incentives to large transmission-scale energy storage projects. Eligibility criteria will focus on projects that are further along in development and demonstrate the highest potential for successful deployment.

“Energy storage is one of the most effective means to enhance grid resilience against demand fluctuations and bolster energy supply, which ultimately helps reduce costs,” remarked Senator Burzichelli (D-Cumberland/Gloucester/Salem). “We must take proactive measures to safeguard consumers from rising electric bills, and investing in transmission-scale energy storage is a vital component of this strategy.”

The legislation establishes a procurement target of 1,000 MW of installed capacity for eligible projects. The first tranche aims to award at least 350 MW by December 31, 2025, prioritizing projects that are further along in development and shovel-ready. The remaining capacity will be addressed in a second tranche, which aims to meet the full 1,000 MW goal by June 30, 2026. Projects that are less mature will also be eligible for consideration in this second round. Incentive awards will consist of a fixed series of annual payments over a 15-year period, contingent upon the successful completion and operation of the project. Once the BPU meets its procurement goal under this bill, it will initiate a proceeding to consider extending the procurement program. If extended, future tranches will be administered similarly to the first two.

Funding for the program will come from a special, non-lapsing fund called the “Energy Storage Fund.” This fund will be administered by the BPU and will receive $60 million annually from the revenues of the societal benefits charge until the final award period concludes. Additional funds may come from legislative appropriations, returns on investments deposited into the fund, and other sources such as federal funding.
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