Three new natural gas generation facilities appear likely to be constructed in New Jersey as a direct result of a new state law. The Long-Term Capacity Agreement Pilot Program (LCAPP), signed into law by New Jersey Governor Chris Christie on January 28, 2011 aims to spur new baseload and mid-merit capacity in the state in hopes of reducing ratepayer costs.

Proponents of the LCAPP law have pointed to auction clearing prices for capacity in New Jersey being as high as nine times the same price in other parts of PJM's territory as a driving force for its adoption. While related controversies at FERC have arisen over capacity prices and rules, in New Jersey, the LCAPP program offers developers of approved projects a guaranteed capacity price for a period of up to 15 years, limited by law to 2,000 megawatts of new generation.

The projects benefitting from the law have now been identified. Pursuant to the LCAPP law and a February 10, 2011 order of the New Jersey Board of Public Utilities, the process involved the state's four public electric utilities retaining an agent to evaluate and recommend proposals. On March 21, 2011, that agent released its final report recommending that the utilities enter into Standard Offer Capacity Agreements with three projects (from 34 original submissions), guaranteeing the developers of those projects a set price for the maximum term of 15 years. All three of the projects selected by the agent are combined cycle natural gas facilities located in Northeastern New Jersey and are expected to generate between 625 megawatts and 665 megawatts. Each is expected to begin operating in 2015 or 2016. The Board of Public Utilities approved of the agent's recommendations on March 29, 2011, and the utilities will now begin the process of signing contracts with the selected generators.