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Christie’s New Budget Plan: Same Old Diversions from Clean Energy Fund

Few consumers understand that when they pay their utility bills, their money helps keeps lights on at state facilities and cover costs for NJ Transit

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Credit: Governor's Office/Mykwain Gainey

When customers pay their utility bills this year, a portion will go to keep the lights on not only at their homes, but also at state-run facilities -- as well as to cover New Jersey Transit’s energy costs.

In the proposed budget for the 2017 fiscal year, Gov. Chris Christie is once again diverting $112 million in state Clean Energy Funds to help pay New Jersey government’s utility bills.

The practice of tapping into the fund is not new. Designed to finance a variety of programs to reduce energy use or promote cleaner ways of producing electricity than conventional power plants, it is one of several funds whose money in tight budget times has been used to balance spending. They include money from pollution settlements with corporations, funds intended to promote affordable housing, and energy taxes intended to go to local governments.

Since Christie took office, more than $1 billion in Clean Energy Funds has been siphoned off to help balance the state budget -- much to the annoyance of environmentalists and clean energy advocates.

“I don’t think average people know that part of their utility bill is being spent to go to the state budget,’’ said Doug O’Malley, director of Environment New Jersey. “It’s the new status quo. The Clean Energy Fund is a slush fund for the general fund and now NJ Transit.’’

Under the proposed budget, NJ Transit would receive $62 million from the energy fund and another $52 million -- roughly the same amounts as in the current state spending plan. The fund is replenished each year by a surcharge on customers’ gas and energy bills, which raised approximately $344 million for the clean-energy program in the current budget.

For typical residential customers, the surcharge runs about $73 a year on their electricity bill and about $89 annually on their gas bill, according to projections last year by the Office of Legislative Service. Businesses, particularly those that use large amounts of energy, pay much more into the Clean Energy Fund.

The Legislature has expressed concern about the diversion, but has gone along with the practice in the past. In fact, during the prior year’s budget process, it proposed diverting another $20 million in clean-energy money to pay for maintenance and salaries at state parks. That provision was line-item vetoed by Christie when he signed the budget.

Because the Budget Summary provided by the state Treasurer’s office does not provide detailed specifics, it is unclear if other money is being diverted from the Clean Energy Fund.

In the current budget, the fund was originally set at $216 million, 80 percent of which was allocated to energy-efficiency projects to reduce consumption of electricity and gas by homeowners and businesses. That does not include the money used to pay state utility costs.

“The problem with the Clean Energy Fund is the administration uses it as an ATM to fund projects that have nothing to do with clean energy,’’ said Jeff Tittel, director of the New Jersey Sierra Club.

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