BPU Taken to Task for Raiding Clean Energy Fund — Just Like Last Year

Christie administration, with cooperation of Legislature, has siphoned off $1.5 billion from fund over governor’s two terms

Assemblyman John Burzichelli (D-Gloucester)
The New Jersey Board of Public Utilities yesterday received its annual scolding over diversion of money from a $356 million Clean Energy Fund from one of two legislative committees that decides where and how state funds are spent.

In what has become a yearly ritual, lawmakers on the Assembly Budget Committee criticized BPU President Richard Mroz over siphoning off money from programs designed to promote conservation and renewable-energy projects, a ploy one legislator called just another tax. It also pays for a low-income energy assistance program.

During Gov. Chris Christie’s two terms, approximately $1.5 billion from the fund has been used by his administration with the approval of the committee and Democratic majority in the Legislature to plug holes in the state’s annual budget. This year’s diversion is $161 million, roughly equal to last year’s allocation from the fund, which is financed by a surcharge on customers’ gas and electric bills.

Big business, big bills

The tactic has long been decried by clean energy and consumer advocates, as well as business lobbyists whose clients end up paying for much of the $764 million raised each year by the surcharge, but to no avail. The surcharge is based on how much energy is used by the customer, so manufacturers and large energy users’ bills pay the brunt, with surcharges occasionally topping $1 million annually. For residential customers, charges range from roughly $35 a year to as much as $64, depending on the utility.

As in last year, most of the money being diverted from the fund will go to pay energy bills in state buildings and energy costs at NJ Transit, a use hardly the intention of lawmakers when they created the surcharge, according to Assemblyman John Burzichelli (D-Gloucester). Another $20 million is being used to pay for state parks management and operations, as was done in the current state budget.

“The electric bill is being used as an alternative tax,’’ he said. “It just doesn’t help.’’

Burzichelli, a frequent critic of the practice, said the diversions pose a special threat this year to the state’s low-income energy assistance program, funded in part by the federal government, which is in danger of losing any financial assistance in next year’s federal budget.

“You are not going to have the resources to do it,’’ he said, referring to filling in any gaps if a projected elimination of $140 million in federal funding for the Low-Income Home Energy Assistance Program occurs. The program provides aid to 300,000 households in New Jersey.

Mroz did not address the question directly, but noted the agency has managed over the past several years through the budget “reallocations.’’ As have other Cabinet officers during budget hearings, Mroz declined to speculate on what the federal budget will look like until Congress adopts a spending plan for the next fiscal year, which begins in October.

This year, the extra charge on the utility bill raised $764 million, according to the Office of Legislative Services. Dubbed the Societal Benefit Charge, it funds a variety of programs besides the Clean Energy Program ($356 million); and Universal Service Fund, which funds helps the needy pay energy bills ($242 million). The balance provide funds back to the state’s eight utilities to cover unpaid electric and gas bills; to pay for decommissioning of nuclear power plants; and to clean up contaminated gas-manufacturing sites.

It did not come up at yesterday’s hearing, but there is a legislative effort to prevent the raiding of the clean energy funds in the future. Sen. Bob Smith (D-Middlesex) wants to put a constitutional amendment on the ballot that would phase out such diversions over a five-year period, but the bill has not yet received a hearing in either house.