Gov. Phil Murphy yesterday signed bills to dramatically overhaul New Jersey’s energy policies while ensuring nuclear power will remain a significant part of its energy mix — albeit with a hefty new subsidy from consumers.
In a ceremony at a solar farm in Monmouth Junction, the governor’s action marked a step toward achieving his ambitious clean-energy agenda, by requiring at least half of the state’s electricity to come from renewable energy by 2030. The plan also mandates utilities ramp up programs to reduce energy use.
“Today is a big leap forward,’’ Murphy told legislators, cabinet officials, and representatives of key environmental groups who gathered at the solar farm, which is still under construction. The governor also signed an executive order, directing the development of a new Energy Master Plan to have the state achieve 100 percent clean energy by 2050.
Whether the state can deliver on that agenda and at what cost to ratepayers will likely generate as much debate and argument over the next few years as occurred during the bruising fight to get the bills through the Legislature in the past six months.
No issue was more controversial than the measure (S-2313) to direct up to $300 million a year in ratepayer subsidies to keep three nuclear power plants from closing in South Jersey. Public Service Enterprise Group threatened to shutter them, arguing they are no longer economically competitive.
In the money — or not?
Critics, including many business groups, consumer advocates, and environmental groups, countered that PSEG never demonstrated the plants are losing money. By handing out such a huge subsidy, opponents feared it would hinder efforts to reach the aggressive renewable energy targets set by Murphy.
“What we have here in New Jersey is the company admitting they are profitable —they are just not profitable enough,’’ said Ev Liebman, director of advocacy for AARP of New Jersey. If implemented, the bill could cost residents about $41 a year, and large companies, tens of thousand of dollars annually, according to opponents.
But Senate President Steve Sweeney, the sponsor and big force behind the bill, said the state could not allow the plants, which employ 5,800 in South Jersey, to shut down.
“There is a cost to the plan, but the cost of ignoring this threat and allow our nuclear plants to close is far worse,’’ Sweeney said. “If the plants close, jobs will be lost, consumers will pay more in utility bills, and the increased use of carbon-based energy will be harmful to the environment.’’
The PSEG perspective
Ralph Izzo, PSEG’s CEO, president, and chairman, said the bill will help preserve nuclear energy, which generates 40 percent of the state’s electricity and more than 90 percent of carbon-free electricity.
Murphy tried to quash concerns about the bill’s impact on utility customers, saying Stefanie Brand, director of the Division of Rate Counsel, would be part of a proceeding to determine if the plants should be handed a subsidy. The bill appears to exclude Brand, who is supposed to represent ratepayers in utility cases.
The governor also said there are safeguards in both bills to protect ratepayers. In the clean-energy legislation, a cap on costs is aimed at holding down what utility customers end up paying for a more aggressive solar program in the state.
Still, Brand acknowledged the ratepayer is going to face significant increases. “There’s no question that the two bills, plus other things we are doing, are going to have a tremendous impact on rates,’’ she said. “Affordability has to be a top priority as we move go forward and work at all these things.’’
Stabilizing the solar sector
Others were more optimistic, particularly regarding the efforts to stabilize the state’s solar sector, codify the governor’s goal to build 3,500 megawatts of offshore wind by 2030, and mandate utilities cut electricity use by 2 percent and natural gas use by 0.75 percent.
“The new law is nothing less than a fundamental overhaul of the way our state will generate, distribute, and use energy,’’ said Jim Spano, vice president of the Mid-Atlantic Solar Energy Industries Association, a trade group. “It will launch New Jersey, the birthplace of solar-power technology, into the forefront of the drive to combat global warming and create a sustainable energy future.’’
The bill also seeks to develop 600 megawatts of energy storage capacity by 2021. Energy storage is crucial to building out solar and wind since both technologies are intermittent sources of power.
“With these actions, Gov. Murphy is making New Jersey a national leader in the transition from fossil fuels toward a healthier and more prosperous clean-energy future,’’ said Tom Gilbert, campaign director for ReThink Energy NJ.
New Jersey Resources CEO Laurence Downes said the legislation underscores the administration’s commitment to a clean-energy future. “The plan is obviously ambitious, but I have no doubt it is achievable,’’ he said.
But Matt Fossen, a spokesman for the New Jersey Coalition for Fair Energy, called the nuclear bill a major setback for ratepayers. “It’s unfortunate the courts may be necessary to bring a dose of reason to the debate,’’ he said.