Opinion: The BPU, The Garden State’s Green Jobs Machine

R. William Potter | August 9, 2011 | Opinion
An obscure legal clause gives the Board of Public Utilities the ability to fund green jobs

With the drying up of federal stimulus funding, and with Gov. Chris Christie standing firm on his no-tax pledge, where does the state turn for the funds needed to generate jobs–especially when unemployment is at 9.2 percent?

And that joblessness figure seems likely to rise even further as the nation heads into what looks like a double-dip recession.

Even the Democrats who control the legislature, which is up for election in November, may have to concede that their hands are tied. They lack the votes to override yet another expected Christie veto of the millionaire’s tax — if the Republican march in lockstep, as they’ve done so far.

Then where to turn for funds to create new jobs? The answer, at least in part, is the Board of Public Utilities (BPU), the 100-year-old regulatory agency established by Woodrow Wilson in 1911 to reign in the excesses of railroad magnates and utility barons.

Those industries are mostly deregulated now. A 1999 restructuring law lifted much of the remaining utility controls in favor of retail competition and bidding for bulk power suppliers. But that 1999 law also contains the means to create the kind of jobs that every state wants a lot more of.

Green jobs — designing and installing solar electric panels, erecting wind turbines, and helping consumers save energy in their homes and businesses. Be sure to factor in all the spin-off jobs that go with these.

Point of Law

An obscure clause in the omnibus 1999 Electric Discount and Energy Competition Act, or EDECA, directs the BPU, which consists of five commissioners (three Republicans and two Democrats), to fund a handful of societal programs. These are to be funded at cost-levels the BPU considers appropriate for achieving the varied goals of EDECA.

This is the Societal Benefits Charge, or SBC. It is an open-ended fund to pay the costs of decommissioning nuclear power plants (like Oyster Creek in 2019), cleaning up polluted gas utility sites sprinkled around the state, and set up a “Universal Services Fund to help the poor and unemployed pay their utility bills and avoid harmful shutoffs.

Finally, the SBC pays for certain energy efficiency and renewable energy programs that produce “net environmental benefits.” This is where the green jobs machine comes into being, if the BPU will agree to it.

How much SBC money are we talking about for green jobs? A lot. Last year, the state’s utilities spent “$698.2 million in support of SBC programs,” according to the BPU’s website. That’s a lot of potential workforce stimulus. And best of all, EDECA gave the BPU all the legal power it needs to increase the SBC even more, as “appropriate.”

But a crowd of nay-sayers argue that SBC funds — which appear as a surcharge on electric and gas bills — cost too much already, burdening ratepayers at a time when everyone is cutting back.

They are wrong. The SBC is one of the best policy bargains ever enacted by the state’s lawmakers, if only the BPU will stay the course and use it to the fullest.

As the BPU explains on its website, despite all that money raised and spent by the SBC, the total charge “equates to approximately 3.8 percent of a customer’s energy bill” or about $56 a year for a residential consumer. This is less than $5 a month to support a basket of important programs, of which clean energy investments and green jobs are by far the largest beneficiaries.

Back to the BPU website: “In 2010, $229.6 million of SBC funds were expended to support New Jersey’s Clean Energy Program” for a grand total of $1.2 billion over the last decade. Of that sum, almost 80 perent went to conservation and efficiency programs that put thousands to work saving energy — while also reducing pollution — in homes, stores, delis, schools and industries around the state.

True, exactly how many green jobs these SBC programs finance is hard to pinpoint, especially since most solar projects are no longer funded through the SBC but from the sale of Solar Renewable Energy Credits. (See my column, “Helping Steer the BPU Back on Track”, for a discussion of SRECs and how they work.)

A 2009 study by the Center for Workforce Development at the Edward J. Bloustein School of Rutgers, entitled “Green Jobs in New Jersey’s Energy Sector,” estimates that 2 percent of all jobs in the nation were green in 2007, a year when the green jobs movement was still in its infancy. As for New Jersey, the researchers found that “over 20,000 jobs by 2015” will be in the green energy, of which 95 percent will be in conservation.

The Energy Master Plan

So with all this good news in the midst of so much political gloom and political from Washington, DC, to Trenton, what is the BPU doing to get the most jobs for the SBC buck? The answer lies in the 2011 draft revision of the Energy Master Plan (EMP), which seems internally conflicted on the subject.

On the one hand, the EMP is determined that New Jersey maintain its solar edge, second only to California in the number of solar installations. The way to do this? By openly embracing the concept of green jobs for the Garden State.

On the other, the EMP warns of “solar subsidies” putting an “undue burden” on ratepayers, weighing them down with an “economic albatross” to pay for the estimated 9,000 solar installations around the state — equal in capacity to one-third of a large nuclear plant.

Indeed, one proposal floated in the EMP is to do away with the SBC entirely, replacing it with some kind of “revolving loan program” or an “energy efficiency utility” whose details are to be worked out later.

Also of concern, last year Gov. Christie, aided and abetted by the state legislature, raided the SBC to fill gaps in the general state budget. He walked away with some $158 million in all — causing many green job prospects to disappear. (Disclosure: I was on the legal team that challenged that seizure by Executive Order followed by a supplemental appropriations law, which the courts eventually sustained.)

Bottom line: The BPU’s five commissioners — headed by former judge, prosecutor and Camden County assemblyman Lee Solomon — have the power to help refloat the New Jersey economy. They can do what the legislature may find it impossible to do. They have embraced the “jobs, jobs” credo of the day. That’s one reason the BPU calls for construction of several gas fired-power plants. Now they may see fit to save the SBC and use it as a true green jobs machine at a time when they are needed most.