NJ Energy Resilience Bank Getting Ready for Second Round of Withdrawals

Tom Johnson | September 29, 2016 | Energy & Environment
Some $135 million in federal loans and grants to go to projects to ensure power stays on at wastewater treatment plants and hospitals

The state is preparing to award up to $135 million in federal loans and grants to keep hospitals and wastewater treatment plants running even if there are widespread outages on the power grid.

The outlay, the latest from the Energy Resilience Bank operated by the New Jersey Economic Development Authority, is projected to go to between seven and 10 projects in the agency’s pipeline, according to officials. All but one of the projects involve hospitals.

The bank, the first of its kind in the nation, was set up in the wake of Hurricane Sandy when the tremendous surge of flooding wiped out power in much of the state, leaving more than 90 wastewater treatment plants unable to treat sewage and forced the evacuation of at least two hospitals when the lights and electricity failed.

The bank provides low-interest loans and grants to facilities that would allow them to keep operating even if a severe storm shuts down portions of the power grid. For the most part, the hospitals and treatment plants are using the funds to provide backup power to build small and efficient power plants to provide electricity when traditional power sources are disrupted.

So far, the bank has awarded $65 million to a couple of hospitals and two wastewater treatment plants to make those facilities more resilient during outages. Operational since 2014, the bank is now accepting applications until the end of the month for the latest round of funding.

The funding for the initiative comes from $200 million in Community Block Development grants allocated to New Jersey in disaster-aid recovery money. The primary focus is to finance so-called distribution energy technologies, including combined heat and power (CHP) plants and fuel cells, which are designed to start up and function, disconnected from the grid during a power outage.

After a somewhat sluggish start, the program is now generally well regarded.

“There will be a number of very good projects that likely otherwise would not be done,’’ said Steven Goldenberg, an energy lawyer who has followed the program since its inception. “Any program that ensures the lights will stay on in the state’s hospitals is a worthy cause.’’

Two hospitals already have received funding from the bank — St. Peter’s University Hospital in New Brunswick and Cooper University Hospital in Camden. The latter received $19.5 million as a grant and $8.7 million as a low-interest loan. St. Peter’s received $4.4 million as a grant and $3 million in a loan.

Both facilities are using the money to develop CHP capability to operate independently if and when the power grid goes down. Both facilities also received loans from Public Service Electric & Gas to cover any gaps in funding between the bank’s financing and project’s total estimated costs.

The other two facilities receiving funding are the Bergen County Utility Authority and South Monmouth Regional Sewerage Authority, both of which lost power for extended periods after Sandy. They were awarded $26.9 million and $2.46 million, respectively.