Load Serving Entities (“LSEs”) in New Jersey are responsible for complying with Transition Renewable Energy Certificate (“TREC”) obligations, with SREC-II obligations arising from the Solar Successor Incentive Program (“SuSI”), and with Offshore Wind Renewable Energy Certificate (“OREC”) obligations as a component of the BGS Supplier’s Class I obligation under New Jersey’s Renewable Portfolio Standards (“RPS”) requirements. However, LSEs (including winners of the 2024 BGS Auctions) are not responsible for purchasing TRECs, SREC-IIs, and ORECs to satisfy these obligations. 

Regarding the TREC and SREC-II obligations, it is our understanding that the TREC and SREC-II program administrator will purchase TRECs and SREC-IIs on a monthly basis from eligible system owners with accounts on PJM-EIS GATS. TRECs and SREC-IIs will be retired to the EDCs’ joint GATS account and BPU Staff will allocate them to BGS Suppliers annually based on the BGS Supplier’s market share of electricity supplied during an energy year. Allocation of the statewide TREC obligation and the statewide SREC-II obligation to suppliers will follow the method set forth in N.J.A.C. 14:8-2.3 (r) and (t). It is our understanding that the Transition Incentive and SuSI program costs are collected by the EDCs from ratepayers. The costs are based on the number of TRECs and SREC-IIs purchased under the applicable program and retired by the applicable program administrator on behalf of LSEs in New Jersey, multiplied by the value of each TREC or SREC-II. Please see New Jersey Administrative Code 14:8-2.3 for further information.

Regarding the OREC obligations, the OREC Funding Mechanism codified in N.J.A.C. 14:8-6.6 describes the mechanism for payment and retirement of ORECs to meet the offshore wind renewable portfolio standard requirement set by the Board. As currently proposed, the EDCs will collect the charges for these ORECs, on behalf of suppliers, from ratepayers through a non-bypassable charge. The EDCs will pay the developers of off-shore wind projects on a monthly basis. Upon receipt of payment, developers of off-shore wind projects will transfer the ORECs to the suppliers’ account so that they can be retired. Thus, while BGS suppliers have the responsibility to retire ORECs, BGS suppliers bear no cost to acquire the ORECs. OREC obligations constitute a component of Class I RPS requirements. Please see New Jersey Administrative Code 14:8-6, including the Funding Mechanism Rules, for further information.