State Seeks to Cut Back Ambitious Energy Reduction Goals

Straw proposal could mean higher utility bills for consumer and commercial customers

Say adieu to the state’s aggressive goal of reducing energy use by 20 percent by 2020, a target once considered crucial to achieving equally ambitious goals in curbing greenhouse gas emissions.

The state expects to achieve far fewer reductions in energy use — at least in the short-term — from consumers and businesses as a result of changes it is proposing to its clean energy program.

In a straw proposal outlining its spending plans from 2014-2017, the state Office of Clean Energy estimates it will cut energy consumption by 17 percent by 2020, a 3 percent decline from an earlier goal in the Energy Master Plan adopted by the Corzine administration.

Reflecting the goals outlined in the new Energy Master Plan adopted by the Christie administration, the straw proposal “addresses the potential transition from a majority of rebate-incentive programs to a balance of rebates and financing programs, such as revolving programs . . . and alternate funding mechanisms.’’

Beyond cutting ambitious energy conservation goals, the straw proposal is important because it has a significant impact on consumer and business utility bills. The clean energy program is almost entirely funded by a surcharge on ratepayers’ gas and electric bills. From 2001-2012, those charges totaled more than $2.4 billion.

The costs are not expected to decline much in the straw proposal suggested by the Office of Clean Energy, which projects approximately $2 billion in spending over the next four years.

The impact of the surcharges on residential customers’ bill is projected to run about $22.39 a year; for midsized commercial and industrial customers approximately $4,231.52 annually; and for larger commercial and industrial facilities at least $11,763 each year.

The increases in electric and gas bills in a state already saddled with some of the highest energy bills in the nation has led to widespread criticism of the surcharges, dubbed the societal benefit charge (SBC), particularly from business customers who bear about 60 percent of the program’s costs.

Clean energy advocates echoed those concerns, criticizing the Christie administration for using ratepayers’ funds to plug holes in state budgets in recent years. The most recent clean energy budget indicates that $313 million in clean energy funds were used to help balance the state budget.

Even with increased money allocated for clean energy funds, some environmentalists questioned whether the money would be there to finance renewable energy and energy efficiency projects.

“Given the administration’s performance to date in raiding clean energy funds, I’m skeptical anything will reverse that record,’’ said Dave Pringle, campaign director of the New Jersey Environmental Federation.

Industry lobbyists were just as upset about the straw proposal, saying that even though they contributed the majority of funding for clean energy programs, they have gotten short shrift in the past.

“We haven’t been getting our fair share,’’ said Hal Bozarth, executive director of the Chemistry Industry Council. “I have always had problems with the way the program was run in the past. As bad as it was before, it makes it worse.’’

Michael Egenton, a senior vice president of the New Jersey State Chamber of Commerce, also said the state needs to look at the subsidies it awards clean energy programs.

“There’s point in time when you have to push them out of the boat and let them swim for themselves,’’ Egenton said.

There will be a public hearing on the straw proposal on Friday, beginning at 10 a.m. at the office of the Board of Public Utilities in Trenton.