Garden State Energy Storage Program Phase 1, Tranche 2 FAQs
Access to these questions and answers by PDF are available here.
1. We see for the GSESP Phase 1 Tranche 2 that proof of a PJM system impact study is enough to qualify for the program, but we do not see where it says what exactly constitutes as proof. Could you please provide some detail as to what would need to be submitted to prove that the SIS process is ongoing?
Answer: Applicants may submit a completed Phase 1 System Impact Study as evidence of readiness for interconnection. If a project is actively undergoing a Phase 1 System Impact Study, a bidder must submit the applicable Project ID (Queue Number) corresponding with the project in order for NJBPU Staff to verify that it is being studied in Phase 1 of an active interconnection cycle. In addition to the Project ID of the applicable project, bidders may submit supplementary documentation to demonstrate a project is actively undergoing a Phase 1 System Impact Study such as:
- A completed and executed Application and Studies Agreement (ASA)
- Documentation demonstrating payment of the study deposit and readiness deposit required at the time of application.
2. We are evaluating whether two proposed energy storage projects may be eligible for participation in the Garden State Energy Storage Program (GSESP) Phase 1, Tranche 2 solicitation and would appreciate clarification regarding the interconnection readiness requirements. Both projects are transmission-scale battery energy storage systems located in New Jersey and have submitted validated applications into PJM's Cycle 1 interconnection cluster study process. The PJM Cycle 1 application window closed on April 26, 2026, and both projects are currently in the early stages of PJM's interconnection review process. The Tranche 2 Pre-Qualification Request & Final Application Instructions state that projects may satisfy the interconnection readiness requirement by providing: “A completed Phase 1 System Impact Study, a completed Surplus Interconnection Study, or equivalent study, or evidence that the project is in the process of undergoing a Phase 1 System Impact Study.” Could you please clarify whether a project with a validated application currently enrolled in PJM's Cycle 1 cluster study process would be considered to be “in the process of undergoing a Phase 1 System Impact Study” for purposes of GSESP Tranche 2 eligibility?
More specifically:
a. Does a validated PJM Cycle 1 interconnection application satisfy the interconnection readiness requirement for Tranche 2 pre-qualification?
b. If not, what specific PJM milestone or documentation would be required before a project in the cluster study process would become eligible?
c. Would NJBPU consider projects currently progressing through PJM's Cycle 1 study process to meet the intent of the interconnection readiness criteria?
Answer: The Board intended to allow projects undergoing interconnection review in PJM Cycle 1 to qualify for Tranche 2 when it set Tranche 2 interconnection maturity requirements. However, a validated interconnection application will not be sufficient evidence to demonstrate that a project is undergoing a Phase 1 System Impact Study for the final application, as a project will need to provide Staff with information that allows Staff to verify the project is actively undergoing Phase 1 review, not just the initial review PJM performs prior to the start of Phase 1. That said, Staff is aware that Cycle 1 will not progress to Phase 1 review until the end of July, and consequently no project will be able to demonstrate it is currently undergoing a Phase 1 System Impact Study during the prequalification review stage. Thus, for prequalification purposes only, Staff is willing to accept a validated Cycle 1 interconnection application, along with proof of payment of the accompanying study and readiness deposits, as evidence that a project will be undergoing a Phase 1 System Impact Study by the time of the final application deadline. As noted in the answer to question 1 above, projects will still need to provide a PJM queue ID number in their final application so Staff can confirm they are actually undergoing a Phase 1 System Impact Study during final application review.
2(a): As indicated above, a validated PJM Cycle 1 interconnection application, if accompanied by proof of payment of the required study and readiness deposits, will satisfy the interconnection readiness requirement for Tranche 2 pre-qualification purposes, but not final application purposes.
2(b): Please see answer to question 2(a) above.
2(c): Yes, projects currently progressing through PJM’s Cycle 1 study process meet the intent of the interconnection readiness criteria. As explained in the answer to question 2(a), a validated Cycle 1 interconnection application accompanied by proof of payment of the required study and readiness deposits will suffice for the prequalification application. However, in the final application bidders must submit their applicable Project ID (Queue Number) in order for NJBPU staff to verify the project’s queue status and ensure that it is still in the study process.
3. Our project may not have the specific manufacturer and model for the battery storage system in place before the August submittal deadline. Can we provide a general statement confirming adherence the NFPA 855 and other safety standards?
Answer: Yes, if battery specific information is not available at the time of application, a Preliminary NFPA 855 Compliance Demonstration statement that the battery storage system will adhere to the most recent version of NFPA 855 (presently NFPA 855-2026) and other safety standards are sufficient as part of the final application. The Preliminary Compliance Demonstration consists of a draft of a full compliance plan, using information available at the time of application.
In addition to assurances that the storage system will adhere to the latest version of NFPA 855 and inverters meeting the latest UL 1741 SB and IEEE 1547-2018 standards, bidders must provide specific evidence as part of their Final Application, such as:
- Evidence that the project will utilize only energy storage systems certified by a Nationally Recognized Testing Laboratory (NRTL) such as UL 9540 and UL 9540A for thermal runaway testing;
- Evidence that installation will be performed by certified technicians in accordance with all manufacturer specifications, such as copies of a commissioning report and ongoing maintenance plan aligned with manufacturer guidelines and industry best practices;
- A signed and sealed letter by a New Jersey licensed professional engineer confirming that the system design, installation, and operation will adhere to all relevant building codes (e.g., NFPA, NEC), local permitting requirements, and the manufacturer’s safety and installation guidelines;
- And/or a detailed Safety and Code Compliance Plan to ensure adherence to all applicable federal, state, and local codes outlining procedures for installation, commissioning, inspection, and ongoing maintenance, referencing specific applicable laws, permits, and standards (e.g., NEC, IEEE, NFPA 855), with confirmation of coordination with AHJ.
4. Can we provide a price that includes levers in case things such as PJM network upgrades or equipment costs rise?
Answer: No. For the Bid Incentive Requested, only one requested incentive level may be submitted per project.
5. Could you please confirm whether any credit support, if any, will be required for awarded projects under this solicitation?
Answer: We confirm that no credit support or pre-development security will be required for awarded projects under this solicitation. Tranche 2, projects will only receive incentive payments once they achieve commercial operation and any penalties for failure to achieve commercial operation deadlines will be deducted from incentive payments.
6. Should the project site plan show our proposed layout or just the site boundaries and parcel information?
Answer: At a minimum, the project site plan should show the site boundaries and parcel information. Including any additional relevant information in the site plan is in the best interest of the proposed project.
7. For the safety adherence of the BESS, are we expected to submit evidence for all 4 bullet points, or just what we feel best accommodates answering the request?
Answer: In addition to assurances that the storage system will adhere to the latest version of NFPA 855 and inverters meeting the latest UL 1741 SB and IEEE 1547-2018 standards, bidders are expected to submit evidence for at least one of the 4 bullet points to demonstrate compliance with the safety requirements outlined in the Tranche 2 Board Order and final application instructions.
8. Is the difference between requirements 5 and 6 just showing the ability to obtain revenues? The first part of question 6 looks to be the same as question 5.
Answer: Yes, that is the main difference between requirements 5 and 6 of the Final Application form for Tranche 2. Requirement 5 specifically asks for evidence of financial means to construct the energy storage system, which may be met by providing the following:
- Audited financial statements from the applicant or project sponsor showing sufficient assets, liquidity, or net income to support project development;
- Proof of committed funding, such as executed equity investment agreements or letters of credit;
- Bank statements or financial institution letters demonstrating access to capital reserves;
- Loan agreements or term sheets from lenders confirming project finance arrangements; and/or
- Evidence of successful past development and operation of energy infrastructure projects of a similar scale.
Requirement 6 specifically asks for evidence of the ability to obtain revenues through electricity markets and non-ratepayer funding, including but not limited to energy arbitrage, ancillary services, and capacity revenues in PJM. This requirement may be met by providing the following:
Market analysis or third-party revenue projections demonstrating potential earnings from energy arbitrage, frequency regulation, spinning reserves, and capacity market participation in PJM;
Letters of intent or executed contracts for energy or capacity sales, power purchase agreements (“PPAs”), or tolling agreements; and/or
Registration or enrollment of the project in PJM as a market participant or asset.
9. For brownfields sites, what is the expectation for evidence showing compliance with NJDEP’s CSRR program?
Answer: For project sites located on a brownfield, the Board requires applicants to include in their application the following:
- An attestation of Compliance with NJDEP Contaminated Site Remediation & Redevelopment (CSRR) program requirements that considers and incorporates the proposed BESS project;
- Identification or confirmation of an appropriate NJDEP PI/Case Number for the project; and
- Identification of the Licensed Site Remediation Professional (LSRP) for the site.
10. For winning bids, will there be a requirement to post security and if so, how is that calculated?
Answer: There is no requirement for pre-development securities for Tranche 2. This is because no Tranche 2, projects will receive incentive payments until they achieve commercial operation and any penalties for failure to achieve commercial operation deadlines will be deducted from incentive payments. Consequently, the program design ensures the financial risks of a project failing to achieve commercial operation or only doing so on a delayed timeline are already born by program applicants.
11. Section 5 of the Tranche 2 instructions does not specify which effective nameplate capacity figure converts the bid rate into the "requested annual incentive" used in the numerator. The worked example illustrates year-by-year effective nameplate capacity in the accredited-capacity denominator, but it is ambiguous which effective nameplate capacity basis is applied to the bid rate in the numerator ($ requested annual incentive). Please can Staff confirm whether in Tranche 2 scoring they will calculate the requested annual incentive using the following:
- The five-year-average effective nameplate capacity;
- The year-one effective nameplate capacity; or
- A year-by-year figure.
Answer: To clarify, the “requested annual incentive” is the one provided by bidders in their final application in $/MW of effective nameplate capacity per year, and unlike the projected accredited capacity values using for scored purposes, is not calculated by Staff. This requested annual incentive is converted into a per-unit bid price by dividing this requested annual incentive by the expected average accredited capacity of the battery over the first five years of the system’s operation. Program Staff will determine a project’s expected accredited capacity in each of its first five years of operation by multiplying the project’s expected effective nameplate capacity for that year, calculated using the projected degradation data supplied by the applicant and the number of CIRs it holds, by PJM’s forward projections of Effective Load Carrying Capability (“ELCC”) rating for the relevant capacity storage resource class in the corresponding year. In other words, for the purposes of calculated the requested incentive per unit average expected capacity value used in project scoring, Staff will use a year-by-year figure. But the requested annual incentive per unit of effective nameplate is simply an input provided by the applicant.
Using the 4-hour battery example on page 14 of the Tranche 2 Launch Order, if a bidder request’s an incentive of $X/MW of effective nameplate capacity per year, the per-unit bid price would be calculated by multiplying the requested incentive level by the average effective nameplate capacity (95 MWs) and dividing by the average expected accredited capacity of 40.2 MW.
12. Section 5 of the Tranche 2 instructions calculates expected accredited capacity using PJM's ELCC class ratings, but the forecast cited (p16, footnote 4) extends only through Delivery Year 2034/35. A project with a planned COD in the 2031/32 Delivery Year or later would have a five-year scoring window running through 2035/36, at least one year beyond the published forecast. Please can Staff confirm, for projects with delivery years beyond the published horizon, whether you will:
- Hold the final published rating (2034/35) flat; or
- Use an updated PJM ELCC forecast if one is released before evaluation?
Answer: NJBPU Staff has developed extrapolations of the ELCC Class Rating values beyond PJM’s forecast window and intends to use those here. Per these extrapolations, Staff will assume the ELCC rating for 4-hour storage will decline by 4% per year in every subsequent delivery year and 1% per year for 6-hour storage, while the ELCC rating for 8-hour and 10-hour storage will remain constant.
13. Could you please confirm which ELCC ratings the program intends to use for evaluating bids under this solicitation? Specifically, will projects be evaluated using the most recently published PJM ELCC values, or a different ELCC schedule specified by the program? Any guidance on the applicable ELCC ratings would be greatly appreciated.
Answer: NJBPU will use the preliminary ELCC Class Ratings for Period Delivery Year 2026/27 – Delivery Year 2034/35, PJM. Please see the answer to question 12 regarding NJBPU’s assumptions regarding ELCC Class Rating values for years beyond Delivery Year 2034/2035.
14. Can the project developer’s name be changed to an affiliate entity post-award?
Answer: Yes, but system owners must notify the Board of any changes in ownership, development, or operation. Specifically:
- Within thirty (30) days of a change in system owner, the new system owner shall notify the Board of their individual and/or corporate names, tax identification number, address, contact telephone number, and the percentage of the energy storage system they own. The new system owner shall update any pre-development security as necessary.
- Within thirty (30) days of a material change in the project operator, either the system owner or the new project operator shall notify the Board of their individual and/or corporate names, tax identification number, address, and contact telephone number.
- Within thirty (30) days of a material change in the project developer, including a change in a subcontractor, either the system owner or the new project developer shall notify the Board of their individual and/or corporate names, tax identification number, address, and contact telephone number
15. Attachment 6 requires project developer to submit: “Evidence reasonably satisfactory to the Board of the applicant’s financial means to construct the transmission-scale energy storage system and ability to obtain revenues through electricity markets or non-ratepayer funding, including, but not limited to, energy arbitrage, ancillary services, and capacity revenues in PJM. When submitting your evidence, please ensure that the file is named using the following format: GSESP_ApplicantName_Application_DocumentType. Adhering to this naming convention helps ensure proper identification and processing of your application materials. Such evidence may include the following:
- Market analysis or third-party revenue projections demonstrating potential earnings from energy arbitrage, frequency regulation, spinning reserves, and capacity market participation in PJM;
- Letters of intent or executed contracts for energy or capacity sales, power purchase agreements (“PPAs”), or tolling agreements; and/or
- Registration or enrollment of the project in PJM as a market participant or asset.”
Does the GIA application adequately satisfy the board's evidence requirement?
Answer: No, a GIA application does not adequately satisfy the board’s evidence requirement for financial means to construct the storage system. To meet this requirement, bidders should submit one of the following:
- Audited financial statements from the applicant or project sponsor showing sufficient assets, liquidity, or net income to support project development;
- Proof of committed funding, such as executed equity investment agreements or letters of credit;
- Bank statements or financial institution letters demonstrating access to capital reserves;
- Loan agreements or term sheets from lenders confirming project finance arrangements; and/or
- Evidence of successful past development and operation of energy infrastructure projects of a similar scale.
16. What changes are allowed to the application parameter post submittal and award?
Answer: Changes in project ownership, developers, contractors, or operators are allowed, but the Board must be notified. Additionally, bidders can increase the planned nameplate capacity, CIRs, or duration of the system post-award, but would not receive any additional incentive award for doing do. Bidders are not permitted to downsize the system post-award.
17. If we submit an additional project to what we initially submitted for prequalification, will it be evaluated like the other prequalified projects?
Answer: Bidders may submit additional projects from what was initially submitted for prequalification. Any additional projects that are submitted after the June 10, 2026, deadline for guaranteed pre-qualification may not have the opportunity to correct any deficiencies before the final bid deadline and will be evaluated against the criteria outlined in the Tranche 2 Board Order and the Pre-qualification Request and Final Application Instructions.
18. Section 4.4 requires applicants to provide assurances that the project will comply with applicable safety codes, standards, and permitting requirements, followed by several examples of supporting documentation, including NRTL certifications, commissioning and maintenance documentation, a signed and sealed letter from a New Jersey licensed professional engineer, and/or a detailed Safety and Code Compliance Plan. Because these documents are typically developed by different parties and become available at different stages of project development (e.g., equipment procurement, engineering, permitting, construction, and commissioning), can the Board clarify whether the listed items are intended to represent examples of documentation that collectively demonstrate compliance over the project lifecycle, or whether each item is expected to be available and submitted as part of the Final Application? Additionally, if certain documentation is not yet available due to the project's stage of development, will the Board accept equivalent evidence demonstrating the applicant's commitment and ability to satisfy these requirements prior to commercial operation?
Answer: The listed items are intended to represent examples of documentation that collectively demonstrate compliance over the project lifecycle. Applicants should submit evidence demonstrating the applicant’s commitment and ability to satisfy the relevant requirement prior to commercial operation if the corresponding documentation is not yet available at the time of final application. The Board will treat such evidence as satisfying the relevant requirements when determining whether final applications are administratively complete.
19. What is the distinction between the use of the planned COD in Section 4.3 and the guaranteed COD in Section 5 when evaluating project maturity and preferential consideration?
Answer: NJBPU Staff will use the guaranteed COD date, as well as other relevant documentation submitted as part of the application, to evaluate project maturity. The Board retains the discretion to issue awards to more expensive projects on the basis of greater maturity if they have guaranteed CODs within 42 months of the solicitation application closing date and the Board determines that the additional benefits the projects provide, including but not necessarily limited to greater capacity savings, outweigh the additional cost of any higher incentive awards such projects may request.
20. Since Section 7.1 establishes delay penalties based on failure to achieve the planned COD, what is the intended purpose of the guaranteed COD (up to 150 calendar days after the planned COD) in the evaluation and administration of the program?
Answer: In addition to using guaranteed COD as a basis for evaluating project maturity during application review, during program administration failure to meet the guaranteed COD starts the clock that will lead to full incentive award revocation if a project fails to COD within the following 36 months. Note that a project that achieves commercial operation within that 36-month window will still be subject to delay penalties and loss of incentive payments for the period during which it failed to operate.
21. If design is not completed by the time of the submittal, what is the expectation for the stamped letter by a New Jersey licensed engineer: “A sealed letter by a New Jersey licensed professional engineer confirming that the system design, installation, and operation will adhere to all relevant building codes (e.g., NFPA, NEC), local permitting requirements, and the manufacturer’s safety and installation guidelines”
Answer: Applicants should submit evidence demonstrating the applicant’s commitment and ability to satisfy the relevant requirement prior to commercial operation if the corresponding documentation is not yet available at the time of final application. The Board will treat such evidence as satisfying the relevant requirements when determining whether final applications are administratively complete.
22. We’re trying to understand the process for becoming an eligible or supported battery manufacturer within New Jersey’s energy storage incentive programs (including GSESP and related utility programs). Could you please advise:
- Whether there is an approved equipment list or manufacturer qualification process
- How a new battery OEM gets evaluated for program eligibility
- Any technical, safety, or interoperability requirements (UL, communication standards, etc.)
- The correct point of contact for onboarding or vendor qualification discussions
Answer: There is no process to become an approved manufacturer or vendor for GSESP, as the program is intended to be technology neutral and allow developers to employ any storage systems that can meet the relevant safety requirements and technical standards. For guidance related to safety requirements and technical standards, please review the Tranche 2 Board Order, the Tranche 2 Pre-qualification Request and Final Application Instructions and/or the GSESP Phase 1 Tranche 2 FAQs.
23. Does N.J.S.A. 48:3-87(s) — the bar on farmland-assessed properties being deemed connected to the distribution system — apply to standalone battery energy storage systems (BESS) seeking incentives under the Garden State Energy Storage Program (GSESP), or is that statutory provision limited to solar electric power generation facilities? Is there any land use restriction under GSESP that would bar a standalone BESS project on unpreserved farmland?
Answer: N.J.S.A. 48:3-87(s) does not apply to the GSESP and is limited to solar electric power generation facilities. There are no land use restrictions under the GSESP that would bar a standalone BESS project on unpreserved farmland in the current Tranche 2 solicitation. However, Staff cautions that the Board may decide to impose land-use restrictions on eligibility in potential future Phase 1 transmission-scale storage solicitations or as part of the forthcoming Phase 2 design for distributed storage projects.
24. Is it true that no project under 5MWac can participate in this Tranche 2? Would GSESP be able to support a project looking to install a new solar + BESS (326kW Tesla Battery) for their onsite use?
Answer: Note that for the purposes of the Tranche 2 solicitation, an energy storage project constitutes a transmission-scale energy storage project if it (1) has an installed (nameplate) capacity of at least 5 MW Alternating Current (“AC”), and (2) will either interconnect directly to the transmission system or be eligible to participate in PJM markets. Thus, a 326-kW battery is not eligible for the current Tranche 2 solicitation.
25. Does an Applicant have to demonstrate a specific interconnection milestone to be considered a viable applicant?
Answer: To be eligible for participation in Tranche 2 of the GSESP, projects must demonstrate readiness for interconnection. Specifically, applicants must provide one of the following as part of their submission:
- A fully executed Generation Interconnection Agreement (“GIA”) or a fully executed Interconnection Service Agreement (“ISA”);
- Fully executed distribution-level interconnection agreement with a Wholesale Market Participation Agreement (“WMPA”) or be in the process of pursuing a WMPA;
- A completed Phase 1 System Impact Study, a completed Surplus Interconnection Study, or equivalent study, or evidence that the project is in the process of undergoing a Phase 1 System Impact Study;
- Documentation demonstrating that they have notified PJM of intent to transfer existing Capacity Interconnection Rights (“CIRs”) of a deactivating generation facility.
This documentation is required to confirm that the project has a viable and approved path to interconnect with the grid. Failure to include appropriate interconnection documentation may result in ineligibility for program participation. Based on the description of your project, you would likely need to have a fully executed distribution-level interconnection agreement with ACE by the final application deadline to qualify for Tranche 2.
26. Section 4.4 (p. 9) of the Pre-qualification Request & Final Application Instructions states that Final Application submissions must include the proposed project’s PJM interconnection queue ID number. Does this requirement apply for projects proposing using CIRs of a deactivating generation facility?
Answer: For reference, the final version of the Pre-qualification and Final Application Instructions can be found on our website, here. The interconnection queue ID number is only required as applicable. In addition to the other requirements outlined in section 4.4, for your case providing a copy of your notification to PJM of the intent to transfer existing CIR associated with a deactivating generation station would be sufficient.
27. Per answer to question 3, what does a draft of a full compliance plan require?
Answer: A draft compliance plan may include, as applicable:
- A general statement confirming the project is being designed to comply with the applicable edition of NFPA 855 and all other applicable state and local codes.
- A high-level description of how the project intends to address key NFPA 855 requirements, such as system technology, equipment spacing, fire protection features, emergency response considerations, and coordination with the Authority Having Jurisdiction (AHJ).
- Identification of any project-specific compliance issues that have been identified to date and the applicant's proposed approach for addressing them.
The Board does not expect final engineering drawings, stamped plans, or formal approval from the AHJ at the Final Application stage. Detailed compliance documentation would be developed as part of the project's final engineering, permitting, and construction processes.
28. Section 5 of the Instructions states that Program Staff will apply PJM's ELCC ratings for "the corresponding year" of the project's first five years of "commercial operation." Could you please confirm whether "commercial operation" refers to the project's planned COD or guaranteed COD for purposes of assigning the first PJM Delivery Year?
Answer: Staff will use the project’s guaranteed COD for the purposes of assigning the first PJM Delivery Year in order to determine the project’s expected accredited capacity.
29. Would the materials listed below suffice as evidence that the Project is in Phase 1 of PJM’s Cycle 1 interconnection process?
- Screenshot of proof of project in PJM NextGen showing project queue number
- Screenshot of proof of Study Deposit from PJM NextGen
- Readiness Deposit proof by Letter of Credit
- Project Application & Study Agreement
- Project single line diagrams
Answer: Yes, the materials listed would suffice as evidence that the project is actively undergoing a Phase 1 review by PJM, provided that Phase 1 has actually commenced at the time the materials are submitted.
30. Based on PJM's most recent guidance, the commencement of the Phase 1 process for Cycle 1 may be delayed beyond the end of July, and potentially beyond the Tranche 2 final application deadline. In that scenario, can NJ BPU confirm that the most current PJM interconnection documentation available to a project at the time of bid submission -- for example, a validated Cycle 1 interconnection application with proof of payment of the required study and readiness deposits, along with the project's PJM Queue ID -- will be sufficient to satisfy the interconnection readiness requirement for the Tranche 2 final application?
Answer: No. Projects are statutorily required to have at least reached Phase 1 by the time of final application. However, the March 4, 2026, Tranche 2 Launch Order authorizes Staff to extend the final application deadline if this is necessary to ensure an adequate pool of projects qualify for the Tranche 2 solicitation. Staff therefore has extended the Final Application deadline for Phase 1, Tranche 2 to 11:59 p.m. EST on October 5, 2026. This extension is intended to ensure that projects in PJM Cycle 1 remain eligible for the Tranche 2 solicitation.