Explainer: Exploring the Promise of New Jersey’s Energy Master Plan

For all the ambition of its goal, the plan is running headfirst into reality

explainer button shadow
In 2011, the state adopted a plan to revamp its energy policies, one that aimed to lower gas and electric bills for consumers while creating of a vibrant solar industry and a robust offshore wind sector.

Three years later, the plan is looking less like a roadmap to a secure and cheaper energy future for New Jersey, and more like a highway pitted with potholes and unexpected detours, leading to questions over the reliability of the power grid.

How so? Many of the initiatives the Christie administration laid out in its Energy Master Plan have yet to be realized, raising questions as to whether in 2020 — when many of those goals are supposed to be accomplished — where will the state find the electricity to power homes and businesses and at what cost.

Questions abound about many aspects of the plan, ranging from the prospects of an offshore wind industry along the Jersey coast, to its once flourishing solar sector, to a controversial program to promote new power plants in the state by subsidizing their development with money from already strapped utility customers.

What’s gone right, sort of

The Christie administration’s plan to expand the power infrastructure, including gas and high-voltage electric transmission lines, is having some success. New gas pipelines throughout New Jersey are being built, a step that will deliver cheap natural gas from the Marcellus Shale formation in neighboring states to customers, which has lowered bills for both electric and gas ratepayers. A new high-voltage electric transmission line also is under construction in northern New Jersey that could help lower bills for electric customers. From an environmentalists’ perspective, however, the downside is that many of those projects have crisscrossed lands previously set aside with taxpayer money for preservation and protection of drinking water supplies. A transmission project by Public Service Electric & Gas traversed three parts of the national park system in northern New Jersey.

What’s gone wrong

A key part of the plan was to try and promote the development of new natural gas-fired power plants in New Jersey, a goal some lawmakers and the Christie administration said would only be realized with $3 billion in subsidies from ratepayers. The program, expected to promote up to nearly 2,000 megawatts of new generation, would reduce congestion on the power grid, which spikes costs to consumers. However, the initiative was bitterly contested in federal court by power suppliers, who won their case, although the state is appealing the decision. One of the three suppliers awarded subsidies under the program already has dropped its plans to build a plant, and it uncertain whether either of the two other plans will proceed without subsidies, depending the outcome of the state’s appeal.

What, no offshore wind?

The state’s plan recommends the development of 1,100 megawatts of offshore wind along the Jersey coast, by 2020, a goal embraced, at least in words, by both the Christie administration and state Legislature. It is in no way close to happening, partly because of the states’ failure to enact a financing mechanism to allow offshore wind developers to line up funding from Wall Street. The federal government also has been slow to offer leases for offshore wind development along the Jersey coast. The delays have been so extensive that offshore wind advocates called on the Christie administration this week to urge the federal government to postpone the lease auction, allowing New Jersey more time to get its act together.

What happened to combined heat and power (CHP)?

The plan calls for 1,500 megawatts of CHP plants by 2020, another goal that seems to be increasingly elusive as time passes. Both the BPU and the Democratic-led Legislature have yet to come to a consensus on how to help fund these projects, which are viewed by many as a way to prevent critical public facilities, such as hospitals, prisons, and wastewater treatment plants from losing power. That happened repeatedly during Hurricane Sandy, often with dire consequences. Still, no plan has emerged as to how fund these projects, other than with some clean energy money.

Where will the power come from?

This is a particular issue in South Jersey, where the Oyster Creek nuclear power plant is due to come offline in 2019. Where the 645 megawatts of new generating capacity will come from remains an unanswered question. The region’s reliability needs also may be tested by the failure of the Pinelands Commission to approve a plan to construct a 22-mile pipeline through the heart of the Pinelands to convert a former coal-burning unit at what once was the B.L. England plant to natural gas.

What’s happened with energy efficiency?

Clean energy advocates say the state is not doing enough to promote ways to reduce energy consumption among businesses and residents. That view was echoed in a petition submitted last week by the Sierra Club to push the New Jersey Board of Public Utilities to begin efforts to promote energy efficiency more aggressively.

What lies ahead for solar?

Once the biggest success story in New Jersey’s efforts to promote renewable energy, the state’s solar sector has fallen on hard times, a victim of its own accomplishments. So much solar has been built in the state that the prices owners of solar arrays earn for the electricity their systems produce have plummeted, drying up investment in the sector. A legislative initiative to fix problems in the solar sector seems to be working, but it could be some time before investments reach their previous levels.