State Targets $65M for Country’s First Energy Resiliency Bank

Tom Johnson | September 3, 2014 | Energy & Environment
Fund’s initial order of business: Keep NJ's water and wastewater treatment plants in service during and after violent storms

When wastewater treatment plants lost power during Hurricane Sandy, they dumped untreated sewage into NJ's waterways.
The state is targeting an initial $65 million allocation for its first-in-the-nation Energy Resiliency Bank to help New Jersey’s water and wastewater treatment plants to keep running in the wake of severe storms like Hurricane Sandy.

Under a draft proposal developed jointly by the state Board of Public Utilities and Economic Development Authority, the agencies outlined how the bank would help critical facilities, such as treatment plants — and later hospitals and long-term care units — stay in service even if the regional power grid fails.

With $200 million allocated to the state by the federal government, the two agencies are aiming to provide the necessary funding to keep the facilities up and running by using so-called distributed energy resources.

According to the draft, initial funding will go to water and wastewater treatment plants, many of which suffered extended outages caused by Sandy. In all of New Jersey’s 21 counties, 91 sewage treatment plants either flooded or lost power during the storm, spewing between 3 billion and 5 billion gallons of raw sewage into state waterways.

Nearly one-third — 267 of 604 public water-supply systems — also lost power. That led to 37 boil-water advisories, seven of which were still in effect a month after Hurricane Sandy made landfall.

To keep those facilities operational, the draft proposal suggests a range of options to keep power flowing. They range from local plants that generate power and thermal power, to installing equipment that will let solar systems keep operating even if the grid shuts down, to fuel cells that convert hydrogen into electricity.

Ever since Sandy struck, the state has been looking at ways it could prevent the kind of widespread outages that occurred after the storm. The problem, according to the draft proposal, is that while many of the technologies are cost-effective over the long-term, the installation costs at critical facilities are considerable.

The proposal said it would provide both grants and low-interest loans to facilities eligible for funding, although not to cover the entire cost of a project.

Given the high costs of the projects, some questioned how much the funding will spur improvements to the facilities.

“It’s not clear how many people will line up for the program,’’ said Steven Goldenberg, an energy lawyer. One concern is the proposal requires facilities to be able to operate on alternative energy systems — even if the grid goes down. That requirement could increase the costs of installing such systems, he said.

“They should recognize how it will increase costs,’’ said Goldenberg. This argument was also made by others during stakeholder meetings on how the program should work.

Initially, the program will be focused on water and wastewater treatment plants, but the next priorities will look to fund projects at hospitals and long-term care facilities, nursing homes, and colleges and universities, among others.

Some colleges provided refuge during the storm, according to the draft. At the College of New Jersey, a combined heat and power (CHP) plant provided power, heat, hot food, and hot showers for an estimated 2,000 mutual-aid workers who were called into the state to help restore power during Sandy.

Most of the funding will go to the nine counties in the state most affected by the storm — Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union counties, according to the draft.

There was also some criticism. “They’re using federal dollars for projects that either have been eliminated or raided by New Jersey (for similar projects),’’ said Jeff Tittel, director of the New Jersey Sierra Club.