Fine Print: Getting the Measure of New Jersey’s Energy Master Plan

Tom Johnson | March 31, 2015 | Energy & Environment
The administration encounters difficulties in trying meet goals it put in place in its 2011 energy strategy

Public Service Electric & Gas is building a 10.14-megawatt solar farm at a former landfill in Bordentown.
What it does: Adopted by the Christie administration early in 2011, the plan sets out a strategy to reduce New Jersey’s high energy costs by promoting development of new power generation and encouraging new pipeline infrastructure in the state. It also seeks to develop more distributed generation, a term used to refer to locally based, smaller power units to deliver electricity to hospitals, wastewater treatment plants, and other critical facilities.

Is it working: In part, yes, but not primarily due to the plan. A steep drop in natural gas prices has greatly lowered heating bills of customers who depend on the fuel. The decline has also helped reduce electric bills for ratepayers because a good portion of the electricity in the state is generated by natural-gas-fired plants. The Christie administration also has stressed the importance of developing Marcellus Shale deposits in Pennsylvania and New York, which have led to lower prices for natural gas.

What about renewable energy: The plan also laid out a strategy for changes in the once-thriving solar industry sector in New Jersey, which fell on hard times because of overbuilding. That caused a big decline in solar development because it led to drop in how much developers could earn for electricity generated by their systems. Environmentalists also were unhappy that the plan retained a statutory goal of having 22.5 percent of the state’s electricity come from renewable energy –instead of the 30 percent target set by the former Corzine administration.

What is not happening: Another goal of the plan is to develop 1,100 megawatts of offshore wind capacity along the Jersey coast by 2020, a target that is unlikely to be met because no offshore wind farms have yet to been approved by the state. Perhaps, just as importantly, offshore developers — more than a dozen were interested in building the projects — have yet to see the state adopt a financing mechanism to make their projects economically viable.

[related]How the state is doing on its other goals: Not very well. The plan calls for the development of 1,500 megawatts (one megawatt provides power to more than 800 homes) from combined heat and power (CHP) plants. The technology uses a more efficient system of producing electricity while at the same time producing heat that can be used to lower heating and cooling costs. The state has set aside $200 million in federal funds to help finance these projects to promote resiliency of critical facilities, but has yet to award any money.

Is energy efficiency a part of the plan: Yes, but it scales back a bit from the goals of the previous plan to achieve a 20 percent cut in energy use by 2020. To some, the state’s efforts to achieve that target are undermined by repeated cuts in the Clean Energy Fund that helps support those programs. More than $1 billion has been diverted from the program to plug holes in the state budget.

What lies ahead: Uncertainty. The plan’s goals, as well as questions about retirement of the Oyster Creek power plant and other units, raises concerns about how strained the state’s power system will be in providing electricity to homes and businesses in the future. Also, there is a bill pending in the Legislature that would dramatically increase how much electricity should be produced from renewable energy sources, a goal many believe would increase energy costs for consumers.