NERA serves as the Auction Manager to sell solar renewable energy certificates (SRECs) on behalf of New Jersey’s four electric distribution companies (EDCs) through an ascending clock auction. NERA was retained by the EDCs to design and oversee the auction process by which the EDCs sell SRECs to interested buyers at market-reflective prices. Five auctions are held each year via a highly adaptable, cost-effective, and flexible model; the auction design allows for SRECs of different vintages to be sold in the same auction. NERA markets the auctions and designed and continues to review the qualification process in which applicants apply to qualify to bid in the auctions. NERA also advises the EDCs on auction starting prices and number of SRECs to be bundled into a “block” to be offered in the auction. Finally, NERA prepares the contracts and transaction confirmations to be executed by the EDCs and winning bidder(s) at the conclusion of the auction, facilitating a post-auction transaction process that takes place within a week of the auction’s conclusion.

The qualification requirements allow for many market participants to participate including energy providers, traders, and aggregators. The design allows the EDCs to sell and interested parties to buy SRECs in large quantities in a transparent manner and efficiently allocates the quantities of SRECs purchased across multiple buyers. The multi-round auction format provides bidders with real-time marketplace information by providing aggregate information about competition levels each round while keeping a bidder’s specific bid private. Winning suppliers take part in an almost immediate transaction process with the EDCs, receiving the purchased SRECs within a matter of days.

Following each auction, NERA manages both the allocation process, pairing winning bidders with the EDCs, and the contract execution process, preparing the contracts and related documents to be executed by the utilities and their winning bidders, aiming to minimize transaction time and cost for all parties. The design includes competitive safeguards to ensure a competitive environment, which is closely monitored by NERA experts.

NERA has managed up to five successful auctions per year and has sold over 3.2 million SRECs since 2010. All available SRECs have been sold in each auction.