Constitutional Amendment to Stop Diverting Clean Energy Funds?

For some environmentalists, an amendment won’t be on the books fast enough. They want lawmakers and governor to cease and desist immediately

Doug O'Malley, director of Environment New Jersey
Environmentalists urged legislators yesterday to stop raiding clean energy funds to solve state budgetary problems, a tactic that has resulted in up to $1.5 billion in diversions over the past seven years.

The pleas came as lawmakers are considering taking up a constitutional amendment that would phase out such diversions, eventually ensuring all of the money in the fund is dedicated to its original purpose — funding renewable energy and projects to reduce energy use.

The fund, financed by a surcharge on customers’ electric and gas bills, is losing approximately $161 million in next year’s budget that begins July 1, about the same amount siphoned off by the Christie administration and legislators in the current budget.

Repeated criticism of tapping into the fund from the business community, clean-energy advocates and others may finally be resonating a bit as the Senate Environment and Energy Committee is scheduled to discuss a resolution (SCR-151) that would gradually phase in dedication of the charge to its original intended uses.

In next year’s budget, the fund would raise $764 million, roughly half of which is supposed to go to clean energy. The remainder goes to support low-income energy assistance programs, remediation of coal gasification plants, and other social programs.

At a hearing of the Assembly Regulatory Oversight Committee, some environmentalists blamed lawmakers for going along with annual diversions from the fund, dubbed the Societal Benefits Charge, proposed by Gov. Chris Christie in approving the annual budget.

“A lot of the time, Democrats are just as bad as the governor,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “There’s a lot of blame to go around.’’

He urged the committee to take up the proposed constitutional amendment that would phase out the diversions and ensure the money goes where it is supposed to go.

Others, however, want the Legislature to immediately end the practice, fearing pursuing a constitutional amendment might allow the practice to continue for a couple more years at least. It may be difficult to get an amendment on the ballot this fall given it would need to be overwhelmingly approved by both the Assembly and Senate by early August. The resolution has yet to move out of committee, and is not scheduled for a vote on Monday.

“The best way to fund clean energy is to stop the raids cold turkey,’’ argued Doug O’Malley, director of Environment New Jersey. “The largest danger of the raids is that they have become the status quo.’’

The state Board of Public Utilities administers the clean energy fund, but O’Malley claimed it has been informally told not to expend all the money it raises each year so the administration can tap into it when needed. The BPU was invited to the hearing, but did not show up.

David Pringle, campaign director for Clean Water Action, noted the diversion of clean energy funds began during the Corzine administration, but has accelerated under the Christie administration.

“Unfortunately, the Legislature has enabled it,’’ he said, but added, “It’s the one thing the Legislature can say ‘no’ to.’’