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Clean-Energy Fund Diversions Already Built Into Christie’s Budget

Critics argue that siphoning off funds makes it all-the-more difficult to attain state’s aggressive renewable-energy goals

John Burzichelli
Assemblyman John Burzichelli (D-Gloucester)

The state continues to rely on money from the Clean Energy Fund to plug holes in its annual spending plan with the Christie administration proposing to use $153 million from the program for the current and next year’s proposed budget.

The diversion of the money from the program -- funded by a surcharge on customers’ gas and electric bills -- drew criticism once again from legislators yesterday during a hearing before the Assembly Budget Committee.

Since the Christie administration took office it has shifted more than $1 billion from the fund -- intended to promote clean-energy projects and reduce energy consumption by residents and businesses -- to the general fund. Despite the criticism from lawmakers, the Legislature has adopted budgets with those diversions intact.

The siphoning off of funds intended to help the state reduce air pollution and institute cleaner ways of meeting energy needs rankles many environmentalists. They say it has undermined New Jersey’s leadership position in promoting renewable energy and energy efficiency, as well as jeopardizing the state’s efforts to meet aggressive targets for reducing pollution contributing to global climate change.

It also has been a bone of contention among some legislators because money is being used for purposes they believe the law passed in 1999 to promote clean energy never intended.

Next year’s proposed budget would divert about $53 million to energy costs at state buildings, as well as $62 million to NJ Transit -- more than double the $29 million allocated to the agency in the current budget.

“Running NJ Transit on the backs of utility bills is not the way to do it,’’ said Assemblyman John Burzichelli (D-Gloucester), a frequent critic of the shifting of clean-energy funds.

“The utility bill should not be a vehicle for taxation,’’ Burzichicelli said. Saying when he read the BPU’s website for clean-energy program, “it made no mention of paying bills at the Statehouse.’’

State Treasurer Andrew Sidamon-Eristoff defended the diversions, saying to the extent that New Jersey can support mass transit, it is supporting clean energy by getting more vehicles off the road.

New Jersey Board of Public Utilities President Richard Mroz agreed. “These allocations are not inconsistent with the original intent of EDCA,’’ he said, referring to the 1999 law that deregulated the energy industry.

Assemblyman John McKeon (D-Essex) disagreed, saying the ratepayers are not receiving the economic benefits intended to reduce energy costs to customers by the shifting of funds from the program.

Despite the diversions, the state said it will not increase the so-called Societal Benefits Charge on customers’ utility bills. For residential customers, it amounted to as much as $73 on their annual electricity bill and $89 on their gas bills in fiscal year 2015, depending on the utility, according to an analysis by the state Office of Legislative Services.

Business customers pay a lot more, particularly manufacturers and pharmaceutical companies that use large amounts of energy. In some cases, it amounts to more than $1 million a year -- on top of what the business pays for the energy delivered to its facilities.

Burzichelli said the diversion of the funds from the clean-energy program could lead the Legislature to look at adopting a constitutional amendment to dedicate those funds to that specific purpose. The Legislature proposed and voters approved a similar amendment that prevented the state from siphoning off funds from the state’s unemployment fund.

The Christie administration has tapped into existing programs beyond the clean energy program to help balance budgets, such as diverting money from affordable-housing programs -- a decision that a state appellate court blocked last month.

Such constitutional amendments -- even though sometimes approved by voters --are opposed by some as tying the hands of future Legislatures and governors to deal with potential fiscal crises. And they don’t always prevent diversion of funds from what advocates say is not intended by the proposal.

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