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With Pope's Encyclical on Environment, Let's Reflect on Garden State

Reviewing NJ’s progress with solar and wind reveals a troubling lack of progress and a renewable-energy sector that could be in serious trouble

potter
Credit: Amanda Brown
R. William Potter

With publication of Pope Francis’ encyclical on the environment calling on every person in the world to set aside selfish desires and work for the common good to protect the planet on which all life depends, it seems fair to ask how New Jersey is shaping up under the Christie administration. What is the status of the state’s once proud position as a national leader, behind only California, in promoting renewable energy as a substitute for climate-changing fossil-fueled power plants?

There is tangible progress, for instance, toward more renewable energy in the future. Recently state Sen. Bob Smith pushed his bill (S-2444), the Renewable Energy Transition Act (RETA), out of committee so it stands ready for a floor vote. RETA sets an ambitious but achievable goal of 80 percent renewable-electricity production by 2050, comparable to levels being achieved by several European nations. If enacted, New Jersey would be the first state in the continental U.S. to adopt such a provision; Hawaii recently announced a 100 percent renewables goal by 2045.

But before the bill was released from committee, key requirements were stripped away. Most important, in its current form there is no increase in the “Renewable Portfolio Standards” (RPS). The RPS mandates the minimum percentage of electricity sold in New Jersey that must come from renewable sources -- primarily solar and wind. Without a steady and predictable increase in the RPS, the solar industry goes from boom to bust, whatever the long-term goals are for the state.

Also removed from the bill was a shift in the financing of solar energy projects from a “commodity model,” in which the value of solar-produced electricity can fluctuate up or down wildly, depending on the current market price for SRECS (solar renewable energy credits). SRECS are the prices paid by retail electricity providers, such as utilities, for the solar-produced power required to be included in their mix of sources.

Early versions of RETA provided for a “least-cost” system of financing that other states are rapidly embracing. It works this way: Renewable energy companies bid for long-term contracts with power providers (utilities, mostly), thereby guaranteeing that ratepayers pay less and solar developers receive protection against unpredictable market fluctuations. Using this model, New Yorkers pay only 20 percent to 25 percent of what New Jersey consumers pay for solar produced electricity.

Why were these essential reforms removed from this important legislation? (Note that similar legislation pending in the Assembly, A-4224, and sponsored by newcomer Tim Eustace from Bergen County retains these reforms.) Apparently, Sen. Smith, a veteran lawmaker, believed he could not get the bill through the Senate unless RETA was scaled back into a state-mandated goal without the RPS milestones or controversial financial reforms.

Meanwhile, the national campaign by certain utilities against the net metering of solar installations has landed in New Jersey. Net metering is the veritable lifeblood of the solar industry. It allows the host of a solar facility such as rooftop panels on a home or business to “run the meter backward” allowing full retail value for the solar generated power with the excess sold back to the utility.

A little-noted feature of existing law caps solar-produced power at 2 percent of total electricity usage in the state. Since net-metered solar is already exceeding the cap, either it must be lifted or dozens of solar developers will soon be closing up shop, or taking their expertise and investment and moving into friendlier states -- such as across the Hudson.

Legislation to lift the cap to 4 percent or even 6 percent is attracting the active opposition of the NJUA, the powerful New Jersey Utilities Association. Repeat: unless the 2 percent limitation is removed or raised very soon, solar has no future in New Jersey. It’s that simple and that important.

A compromise bill to increase the limit to 2.9 percent has apparently received backroom approval from key state lawmakers, but this is only a Band-Aid, since it yields another 530 megawatts of potential growth in net metered power. That’s equal to no more than three years of net-metered solar projects – – and then nothing.

At the same time, the Christie administration has started two critical energy policy proceedings – an update of the state Energy Master Plan with three hearings in August and a CRA (Comprehensive Resource Analysis) by the Board of Public Utilities -- with uncertain but potentially ominous results. That’s because Gov. Chris Christie’s presidential ambitions have been pulling him ever more tightly into the embrace of the Koch Brothers (fossil-fuel billionaires and active climate-change deniers). So it seems unlikely to expect new policies to emerge from these reviews favoring increased solar or wind in the Garden State.

To sum up, the state of renewable energy in the Garden State is decidedly uncertain and is likely to remain that way for the foreseeable future. This despite Pope Francis’ clarion call for “immediate action” by every person -- presumably including Christie, a lifelong Catholic – to take action to preserve the planet from the looming catastrophes awaiting us if global climate change is not arrested very soon.

R. William Potter is a partner in the Princeton-based law firm Potter and Dickson. The views expressed are his own and do not necessarily reflect the views of the firm or any client.

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