Murphy Diverts $136M in Clean-Energy Funds to Help Balance Budget

Raiding Clean Energy Fund is nothing new, Christie and Democratic Legislature regularly did it in preceding administration

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In his first budget message, Gov. Phil Murphy retained one tactic frequently employed by his predecessor: diverting more than $136 million in clean-energy funds to help ensure a balanced state spending plan.

The diversion is a practice the Democratic governor railed about during his campaign last year, and one his own transition team on energy and environment recommended he curtail in a report issued earlier this year.

The fund, financed by a surcharge on utility customers’ monthly bills, essentially became the Christie administration’s and Democratic-controlled Legislature’s ATM during the former governor’s two terms, with more than $1.5 billion raided to fill budget shortfalls.

The tradition will continue if lawmakers go along with the governor’s budget. The bulk of the clean-energy funds will go to New Jersey Transit ($82 million, down from $132 million in fiscal year 2017) and to pay the state’s energy bills ($47.5 million, a drop from $70.8 million in fiscal 2017). Other clean-energy funds are being used to get New Jersey back into the Regional Greenhouse Gas Initiative ($5 million) and are going to the state Board of Public Utilities ($2.7 million).

The diversions have been repeatedly criticized by clean-energy advocates and business groups, who argue it hampers the state’s efforts to switch to cleaner fuels and reduce emissions contributing to climate change.

At one point last year, the Legislature appeared poised to put a constitutional amendment in place that would prevent the diversion of clean-energy funds, but that effort stalled and never made it onto the ballot.

With Murphy embracing an aggressive clean-energy agenda, backers had hoped he would end the diversions, or at least significantly curtail how much money is siphoned away from clean-energy programs.

“It’s disappointing, although not completely unexpected,’’ acknowledged Jeff Tittel, director of the New Jersey Sierra Club. “My biggest concern it’s still in line with what Christie took. We need to stop the bleeding of the Clean Energy Fund.’’

The governor’s office did not respond to a request for comment.

On principle, the clean-energy funds should remain committed to their intended use, said Michael Egenton, executive vice president of the New Jersey State Chamber of Commerce. “We don’t like moving money around and taking it away from its intended purpose,’’ he added, although he understands the need to fund NJ Transit properly.

The surcharge, dubbed the societal benefits charge, has steadily grown since its inception about two decades ago. This year it was projected to raise over $700 million, about half of which was supposed to go to the Clean Energy Fund. Most of the rest of the money goes to an energy-assistance fund to help low-income households pay their utility bills.