Getting to 80% Renewable Energy by 2050: Lawmakers Start to Talk Tactics

Tom Johnson | March 1, 2016 | Energy & Environment
Reaching this target without further burdening NJ consumers is chief concern -- for now

wind farm
The state is once again pushing a bill that would ramp up how much electricity used in New Jersey must be produced by renewable energy, a step backers say is crucial to reducing greenhouse-gas emissions contributing to global warming.

The vehicle would be a much-debated measure that would require 80 percent of the electricity in the state to come from renewable sources such as solar and wind by 2050, as well as other less polluting ways to create energy to power homes and businesses.

Perhaps more important than voting the bill out of the Senate Environment and Energy Committee, advocates not only talked about why the state should pursue the goal, but also began discussing how it would achieve the target without saddling consumers with ever-rising energy bills.

Sen. Bob Smith (D-Middlesex), the chairman of the committee, conceded the targets are aggressive, but “some places on the planet are well on the way to achieving it.’’ He echoed the need to act now to address global warming. “If you are still in the camp that thinks climate change isn’t happening, you have a severe IQ deficit,’’ he said.

The legislation (S-1707), similar to a bill approved by the Senate in the last session but never passed by the Assembly, has faced tough criticism from business interests, the state Division of Rate Counsel, and others over its impact on already high energy costs.

Smith (D-Middlesex), the sponsor and chief driver of the bill, acknowledged those concerns when he urged those interested in the issue to begin discussing possible alternative ways to fund solar in New Jersey. Solar energy is projected to be a crucial factor in achieving the bill’s goal, but skeptics question whether the state can afford that route.

Division of Rate Counsel Stefanie Brand last year told the committee the 80 percent goal could boost ratepayer exposure to higher costs of up to $2.8 billion, which would be on top of the $5 billion it could impose on them through the state’s current system of financing solar facilities.

“I do think every once in a while, the rate counsel is right,’’ Smith said, when he questioned a prominent solar developer, Lyle Rawlings, about how solar systems should be financed.

[related]“Anything, but what we have now,’’ Rawlings said, noting it costs New Jersey four to five times what it costs New York to produce a kilowatt of electricity from a solar array.

The current model requires utility customers to ultimately pay for the electricity the owners of solar arrays produce. The system has put the state in the forefront of developing solar installations, but even solar developers say it might not be the best way to promote the technology.

Smith directed Rawlings get together with Andrew Hendry, the president of the New Jersey Utilities Association, to begin discussions on resolving the issue. “We have to find a way to make the utility and renewable worlds compatible,’’ Smith said.

With the growth of solar and other forms of so-called distribution generation — power systems that generate electricity locally rather than via a conventional centralized facility — utilities are seeing their top line erode because of a drop in energy use. The state also is banking on offshore wind farms to help drive a cleaner energy future, but that goal is far from being realized.

Some utilities, particularly Public Service Enterprise Group, have embraced those changes and invested hundreds of millions of dollars in developing solar systems and energy efficiency. Most industry observers say dramatic changes are needed in the century old business model, which relies on growing customer usage of gas and electricity to remain profitable.

Hendry, too, expressed concern about the costs associated with increased reliance on renewable energy, but seemed to agree there was some common ground to be found among the various stakeholders on how to proceed.

Rawlings was even more optimistic. “It was a real step forward,’’ he said afterward. “It’s moving to a new stage on both the legislative side and stakeholders’ side.’’

Not everyone agreed. Mike Proto of Americans For Prosperity, a conservative interest group, warned “this bill will lead New Jersey down a dangerous and uncharted path.’’