Clean-Energy Straw Proposal Budget Comes in at $355 Million

Tom Johnson | June 10, 2016 | Energy & Environment
As in recent years, a big slice of the fund -- at least $125 million -- is being diverted for other purposes

The state is proposing to spend $344.7 million on clean energy in the upcoming fiscal year — the same level it has maintained for the past several years despite new diversions of money from a special surcharge to finance the program.

The straw proposal, the subject of a public hearing this morning in the State House Annex, will provide funding for a wide variety of clean-energy initiatives, with the bulk of the expenditures ($182 million) targeted to efforts to cut energy use in homes, low-income households, commercial and industrial facilities, and state buildings.

As in the past, the program is funded entirely by a surcharge on customers’ gas and electric bills. Once again, however, at least $124.9 million will be diverted to pay for utility bills at state buildings and other energy-efficieny programs at state-run institutions.

The diversions have angered clean-energy advocates in the past, who argue they impedee efforts to a “greener” economy. But the Christie administration and Democratic-controlled Legislature have approved the siphoning of funds each June as part of the annual budget process.

Four others areas will be funded by the program: $22.7 million will go distributed-energy projects, such as standalone power plants and microgrids; renewable energy will get $1.9 million; Economic Development Authority projects will see $160,000 from loan repayments and interest; and state agency administrative costs will receive $12 million.

The clean-energy program was established when the state deregulated the energy sector and created the the surcharge on utility bills. The program has grown substantially since its inception in 1999 with the surcharge now raising more than $910 million. A huge portion of the money funds a low-income energy assistance program, among other things.

So much money is raised each year that it has become a frequent target for lawmakers and the executive branch when funds are needed for other programs. More than $1 billion has been diverted from the fund since Gov. Chris Christie took office.

The straw proposal is expected to be adopted by the state before the next budget year begins on July 1. The hearing begins at 10 a.m. in Room 11 of the annex.