Office of Clean Energy Ponders $100 Million in Cuts

Tom Johnson | March 18, 2010
Revamped spending plan honors all current rebate commitments

The state Office of Clean Energy is proposing to slash spending on energy conservation projects by more than $60 million and reduce investments in renewable energy sources, such as solar and wind power, by another $46 million as a result of diversions made by the Christie administration to balance this year’s state budget.

The revamped spending plan, a subject of a hearing next Thursday in Trenton, indicates the spending diversions will mean deeper cuts than those suggested by Board of Public Utilities President Lee Solomon in recent days. Solomon had said the clean energy program would be able to meet all of its obligations.

The diversion of funds to plug a hole in the current state budget has come under fire from clean energy advocates and lawmakers, primarily because the money being diverted is raised by a special surcharge on gas and electric bills paid by most customers. They also worry it will undermine aggressive targets set by the Legislature and previous administration to sharply curb energy consumption in New Jersey and promote cleaner ways of producing electricity.

In the straw proposal issued by the Office of Clean Energy, it acknowledged the revised budget will require “consideration of deferral or elimination or new programs, reductions to some program budget and changes to program incentives.” Nonetheless, the revamped spending plan does honor all existing rebate commitments, which are vital to helping homeowners and small businesses install solar systems on their homes and buildings.

Future Unclear for Combined Heat and Power Plants

Also, the office budget plan does not spell out how the agency will finance a couple of dozen projects to build more efficient, combined heat and power plants. The administration also has emptied a special fund financed by a surcharge on businesses’ electric bills, forcing the state agency to search for new ways to fund $48 million in combined heat projects.

In talks with various stakeholders earlier this week, Solomon said the agency was hoping to use federal stimulus money for that purpose but was awaiting a ruling from the state Attorney General’s office on the issue, according to industry lobbyists briefed on the issue.

Assemblyman Upendra Chivukula (D-Middlesex) said he felt strongly the administration needs to look for other ways to finance the clean energy projects. “There was a lot of thinking that went into ensuring there would be enough money to finance our clean energy goals. This could set us back (in that effort),” he said.

Matt Elliott, clean energy advocate for Environment New Jersey, agreed. “This is a huge hit to the very program that for over a decade has built a robust solar market in New Jersey and helped up reduce statewide energy demand, avoiding the need to build expensive and polluting power plants,” he said.