Lawmakers Look to Pull the Plug on Draft Energy Plan

Tom Johnson | September 14, 2011 | Energy & Environment
Proposed bill would boost reliance on renewable energy, preserve controversial surcharge

The legislature is moving to block the Christie administration from implementing some key aspects of its three-month-old draft Energy Master Plan, posting a bill that would require New Jersey to have at least 30 percent of its electricity produced by renewable energy by 2020.

The bill (S-3032) is up for a vote in the Senate Environment and Energy Committee on Monday. It fulfills a promise made by the panel’s chairman, Sen. Bob Smith, a Democrat from Middlesex County, and other Democratic lawmakers who have accused the administration of scaling back the state’s goals to rely on solar power and other sources of renewable energy.

Beyond ramping up how much power is produced by renewable energy, the legislation also would require the administration to set a controversial surcharge — the societal benefits charge (SBC) — at the same level as it was on January 1, 2011.

That provision may be more important than establishing a new renewable energy portfolio standard of 30 percent, up from the current 22.5 percent target, which has been the focus of much of the debate over the draft plan.

Funding Clean Energy Programs

The surcharge has raised more than $4 billion since it was enacted more than a decade ago, when the state broke up its electric and gas monopolies, about 40 percent of which has gone to fund clean energy programs. Board of Public Utilities (BPU) President Lee Solomon said earlier this summer that he’d like to see the charge shrink to zero and be replaced by a revolving loan fund, a strategy being pursued by one of several stakeholder groups set up by the agency.

While the surcharge costs homeowners roughly $5 per month on their utility bills, it can be a huge burden to businesses and institutions that use a lot of energy. In some cases, the SBC runs more than $1 million a year, a cost business advocates have long lobbied to reduce.

If Democrats are successful in keeping the surcharge at its current funding level, the state’s clean energy program probably would avert steep reductions in various undertakings to promote solar power and other renewables.

“The whole purpose of this legislation is to protect the state’s renewable energy goals and to preserve renewable energy funding through the societal benefits charge,” said Jeff Tittel, director of the New Jersey Sierra Club.

Smith, who has been very critical of the administration’s draft energy plan, did not return a call for comment.

Second to California

Last year, the state’s ratepayers spent $122 million to install 132 megawatts of new solar capacity, which helped New Jersey rank second behind only California in the number of solar installations. In recent years, the solar sector has enjoyed enormous support from lawmakers, but the Christie administration has expressed concerns over the high cost of the technology. In its draft plan, it recommends targeting aid mostly to bigger utility-scale projects on brownfields and landfills rather than small commercial or residential installations.

That suggestion has been criticized by clean energy advocates and solar industry officials.

“We’re on track to meet our goals for renewable energy,” said Matt Elliott, clean energy advocate for Environment New Jersey. “This [the bill up on Monday] is all about harnessing that momentum and moving forward on renewable energy.”

That view was disputed by Joseph Sullivan, a vice president of energy policy and development at Concord Engineering and who helped draft the energy plan while at the BPU earlier this year. He argued too much focus of the debate on the plan has occurred over the solar sector, which accounts for about 2 percent of the electricity produced in the state.

“We need to support less expensive technologies,” said Sullivan, citing combined heat and power (CHP) plants, which could produce an equal amount of power at a fraction of the cost of solar. “It’s pretty alarming we’re not doing the things that are most cost-effective,” he said.

The 30 percent goal also was derided by Gov. Chris Christie as a “pie-in-the-sky” sop to special interests in the press conference unveiling the plan. Since then, administration officials have sought to rebuff criticism for scaling back renewable goals by emphasizing they retained the 22.5 percent renewable energy portfolio standard, which has always been in place. The 30 percent target set by the Corzine administration, they have argued, was merely an “aspirational” goal.