Assembly Committee Redefines Renewable Energy

Tom Johnson | March 13, 2012 | Energy & Environment
Bill would extend ratepayer subsidies to some technologies based on fossil fuels

In a Statehouse deeply split along partisan lines, there is a lot of agreement that New Jersey needs to do more to promote renewable energy and energy conservation.

How to go about achieving that is another matter entirely.

Those dividing lines emerged again yesterday, as the Assembly Telecommunications and Utilities Committee debated and approved over the objections of environmentalists and the state Division of Rate Counsel a bill (A-1383) to redefine what technologies would be considered renewable energy. It passed in a party-line vote.

The legislation, sponsored by Assemblyman Upendra Chivukula (D-Somerset), would expand the universe of technologies that would be eligible for ratepayer subsidies to incent their development, including some based in whole, or in part, on carbon dioxide-emitting fossil fuels.

That concept troubled Division of Rate Counsel Stefanie Brand, who noted it would extend ratepayer subsidies for the first time to technologies that reduce greenhouse gas emissions for energy produced by fossil fuels. Others feared it could lead to waste-to-energy facilities being eligible for the subsidies.

The committee amended the bill to try and address those concerns, but the debate was quashed, primarily because environmental groups objected to expanding the definition of Class I renewables, which, until now, have primarily been solar, wind, and small micro-hydro projects.

“Our vision is that Class I renewables are reserved for the cleanest of the clean,’’ said David Pringle, campaign director of the New Jersey Environmental Federation.

His view was echoed by others, a stance that prompted Chivukula to sharply question them as to how the state would meet its aggressive goals of having 22.5 percent of its electricity produced from renewables by 2020.

“You can’t keeping saying no,’’ Chivukula said, when defending the expansion of renewables. He also mocked assertions that the state will be able to build 3,000 megawatts of offshore wind capacity by 2020.

“This is a dream,’’ he said, citing the lagging efforts to develop an offshore wind industry off the coast of Jersey. Two recent reports from state-hired consultants suggested New Jersey should not approve the first application to build a wind farm three miles off of Atlantic City.

Others, however, were more concerned with the impact of moving forward with an expansion of the definition of “approved alternative sustainable technologies.’’

Critics said the definition is worded far too broadly. More importantly, they worry that those facilities would be given an exemption that would not require them to pay a societal benefits charge, which helps finance clean energy programs in New Jersey, Brand said.

“We are asking ratepayers to subsidize large, carbon-producing technologies, some of which may be feasible without subsidies, and some of which may be prohibitively expensive,’’ Brand said.

The surcharge has become a political football in Trenton, with business advocates arguing that it has caused New Jersey to be put at a competitive disadvantage with neighboring states. For some businesses, the surcharge could top $1 million a year.

The bill also would establish an energy efficiency portfolio standard similar to the renewable energy certificates established for solar and wind. In this case, however, instead of rewarding owners of solar systems for the electricity they produce, an energy efficiency certificate would pay them for the energy they do not use.

In both instances, the cost of those certificates ultimately are or will be passed on to electric customers, a subsidy designed to kick-start those renewable energy technologies. And there is the rub.

The concepts of an energy efficiency certificate and of expanding the definition of renewable energy technologies have been bandied about previously– a remarkably similar bill ended up being conditionally vetoed by Republican Gov. Chris Christie in the previous legislative session over a provision dealing with solar that is not in the current bill.

The concept won endorsement from environmental groups, but was criticized by Brand, who questioned whether such a program could work in a state like New Jersey, which deregulated its gas and electric sectors back in 1999.

Her views triggered a dubious response from Chivukula, who noted that the state is ranked only 15th in the nation in terms of its success in promoting energy efficiency. “We have to come up with a better way,’’ the chairman of the committee said, arguing right now there is too little monitoring of the success of current energy efficiency programs administered by the Board of Public Utilities.

Under the state’s energy master plan, the state aims to reduce energy consumption, but does not specifically set a target, abandoning a previous goal of reduce energy use by 20 percent by 2020.