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Substantial Changes Proposed to Energy Storage Rules
On September 10, 2026 the New Jersey Board of Public Utilities (BPU) issued a notice of proposed substantial changes upon adoption of proposed rules in New Jersey Register associated with the launch of the Garden State Energy Storage Program (GSESP), previously referred to as the New Jersey Storage Incentive Program.
Among other things the BPU is proposing to:
(1) “strike all language related to the distributed segment [i.e., Phase 2] from the proposed rules,” saying that it chose “to narrow the scope of the existing rulemaking to just the transmission-scale segment, and to continue working on distributed segment development through separate proceedings” because it “determined it could not gather and incorporate sufficient stakeholder feedback to formulate a revised proposal for the distributed segment that could be issued prior to the expiration of the current notice of proposal” due to significant changes likely to be necessary in light of”: (i) the need to ensure alignment and avoidance of double compensation with the virtual power plant (VPP) program directed by Executive Order 2; (ii) substantial necessary changes revealed by stakeholder comments; and (iii) potential statutory requirements from the pending A1072;
(2) “tie annual incentive payments to battery cell degradation in addition to the existing tie to annual dispatch availability, pursuant to a methodology that will be specified in the Board Order opening the relevant solicitation”;
(3) “allow for application deposit refunds in the case that an application becomes disqualified for reasons beyond the applicant’s control”;
(4) “waive the bid fee for applicants who did not receive an award in a solicitation and who submit a substantially similar project to a subsequent solicitation”;
(5) “add a bid validity period of nine months from the final submission deadline”;
(6) amend “the qualification requirements for transmission-scale energy storage incentives” such that “projects will be required to have entered the PJM interconnection process and, at a minimum, be in the process of undergoing a Phase 1 System Impact Study, or have completed a Surplus Interconnection Study or an equivalent study” or provide BPU “with documentation demonstrating that they have notified PJM of their intent to transfer the existing capacity interconnection rights of a deactivating generation facility”; and
(7) “remove the requirement to report details regarding the installed capacity toward the State’s 2030 energy storage goal, including the total installed capacity, technology type, number of projects, and identification of applications that were awarded and not awarded,” requiring only that projects report the installed capacity.
