Administration Sets Rules for NJ Rejoining Regional Initiative to Curb Pollution

Tom Johnson | December 18, 2018 | Energy & Environment
There’s muted praise for proposed new cap on carbon emissions, as some environmental groups push for tougher restrictions

B.L. England power plant
The Murphy administration yesterday proposed new rules for rejoining a multi-state initiative to curb climate-changing pollution from power plants, a top priority that triggered much debate over how steep the cuts should be.

The proposal may do little to quell the debate, and drew muted praise from usually supportive environmental organizations that had advocated much more significant reductions in emissions than the state Department of Environmental Protection recommended.

Instead, they rallied behind Gov. Phil Murphy’s move to get back into the Regional Greenhouse Gas Initiative with nine other states in a regional cap-and-trade program to reduce carbon dioxide emissions from the energy sector. New Jersey was a charter member of the coalition before former Gov. Chris Christie pulled the state out in 2012, calling it ineffective and a tax on utility customers.

In a press release, Murphy argued the new rules proposed by the DEP are an important first step toward the state resuming a leadership position in the green economy while keeping New Jersey on a path to 100 percent clean energy by 2050.

Business interests worry about rising energy bills

If so, that route is littered with potential detours. Businesses worry rejoining RGGI will spike already high energy bills at a time when the state is poised to invest billions of ratepayers’ dollars in offshore wind, modernizing the power grid, subsidizing nuclear power, and other clean energy technologies.

“Rejoining RGGI basically represents a carbon tax on ratepayers. It asks them to pay more for energy that is already very costly,’’ said Tony Bawidamann, a vice president at the New Jersey Business & Industry Association.

DEP officials projected the new rules could increase the average household electric bill by a bit less than $1 a month. The agency did not respond to questions about how much it would cost businesses, which generally use much more electricity than homeowners.

The rule proposals also only address emissions from current electric generating facilities, not new ones. New natural gas power plants have been proposed in the Pinelands, the Highlands, and New Jersey Meadowlands — all increasing carbon pollution at a juncture when new state laws propose that at least half of our electricity come from renewable energy within 11 years and 40 percent from nuclear power plants.

“If those plants get built, it will blow a hole in the cap and we will never recover,’’ said Jeff Tittel, director of the New Jersey Sierra Club, one of the organizations pushing for the DEP to set a lower cap on emissions from power plants. “For us, they have to stop those plants.’’

Supporters say rejoining RGGI will curb pollution

RGGI advocates argued rejoining the program will curb pollution, eventually lower energy bills by funding programs to reduce energy use and promote cleaner sources of power like offshore wind and solar that will create new well-paying jobs.

“Rejoining neighboring states in cutting carbon pollution — with reductions consistent with those needed to stabilize the climate — will help New Jersey get back on track in addressing climate change,’’ said Mary Barber, of the Environmental Defense Fund.

That perspective, however, contrasted with arguments made by five other environmental groups this summer in a letter to New Jersey cabinet officials urging a cap on power-sector emissions of between 12 and 13 million tons of carbon dioxide starting in 2020, when the state is projected to ultimately rejoin RGGI.

The DEP’s new rules propose a cap of 18 million tons on carbon pollution that year, or roughly one-third what the Natural Resources Defense Council and other groups recommended. Projected carbon pollution from New Jersey’s power plants is expected to be approximately 20.6 million tons in 2020, according to the DEP’s projections.

By 2030, the state’s reductions of greenhouse gas emissions will be 11.5 million tons under the projections in the new rules proposed by the DEP.

Different assumptions led to different cap sizes

The environmentalists proposed a cap ranging between 12 and 13 million tons. They used the same modeling as DEP in arriving at their projections, but each used different assumptions that led to the contrasting cap recommendations.

“There’s nothing in principle that separates us,’’ said Dale Bryk, a senior strategic advisor to the NRDC. “They haven’t shown us anything yet to doubt our numbers.’’ That debate will continue during public hearings on the two rule proposals.

“It is critical we rejoin the program with the strongest possible emissions cap to ensure that we serve as a climate leader amongst the RGGI states,’’ added Doug O’Malley, director of Environment New Jersey, another group advocating a lower cap.

DEP officials contended the 18-million-ton cap was arrived at in part because anything below it would result in New Jersey power plants — generally about 30 to 35 percent cleaner than other facilities in the regional power grid — would be put at an economic disadvantage with those out-of-state units. It would result in cheaper and more polluting power plants in other states being selected by the regional power grid to provide electricity, they said.

The new rules affect more than 100 generating units at 36 power plants across the state, which account for about 16.5 percent of New Jersey’s greenhouse gas emissions. The transportation sector — cars, trucks, buses and other vehicles — are the major contributor to climate change, representing about 40 percent of greenhouse gas emissions.

If the 18-million-ton carbon dioxide cap is retained, the state projects it will generate about $100 million in revenue from the auction of the pollution allowances. (The money paid for the allowances in the auction is returned to states participating in the initiative to fund clean-energy projects — with an emphasis on programs that will benefit communities disproportionally burdened with pollution.)