The state has cut $16 million from a much-touted new program designed to help motorists buy electric vehicles by offering rebates of up to $5,000 to cushion the cost of zero emission vehicles.
The program was a key component of a comprehensive law signed this past January to electrify New Jersey’s transportation sector, a goal considered crucial to achieving the state’s ambitious goals to significantly curb greenhouse-gas emissions here.
But with state revenues declining because of the coronavirus pandemic that has shut down large parts of the economy, the New Jersey Board of Public Utilities had to approve a three-month extension of its clean-energy program. In doing so, it shifted funds and ended up reducing its funding for electric vehicle rebates by $16 million.
Under the law signed by Gov. Phil Murphy earlier this year, the state was supposed to allocate $30 million annually over the next decade for the rebate program, which is funded by a surcharge on customers’ electric and gas bills to pay for New Jersey’s clean-energy program.
While disappointed in the multimillion-dollar cut, electric vehicle advocates acknowledged that unusual circumstances had forced the BPU’s hand.
“I don’t think it is unexpected. The state needs to tighten its budget,’’ said Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, a group that pushed hard for the rebate funding. “Under the current circumstances, I’d be hard-pressed to see how they could begin to draw down that money.’’
The rebates were viewed as essential to jump-starting the transition to zero emission vehicles in the light-duty vehicle market. The Murphy administration wants 330,000 electric vehicles (EVs) on the road by 2025; as of June, the state had more than 31,000 zero emission vehicles on the road.
The program is designed to provide rebates of up to $5,000 for vehicles under the price of $55,000 and provides $25 for each mile the car runs on electric power instead of gas, up to the $5,000 cap.
Pam Frank, CEO of ChargEVC, a not-for-profit coalition seeking to electrify the transportation sector, said she understands the state is facing a difficult time, but still found the cuts troubling.
‘’For one thing, it’s a lousy precedent,’’ Frank said. For the past decade, previous governors and legislatures often have used the clean-energy fund to plug holes whenever state fiscal crises arise, and the latest diversion continues that trend.
Diversions from the fund have surpassed $1 billion over the past couple of administrations, a practice lawmakers vowed to end in recent years, but have been slow to implement.
Where’s the transparency?
Frank said she is also concerned the state has been slow in providing transparency in how the new program is working. “Sharing data should not be a heavy lift,’’ she said, referring to how much consumers are buying into the rebate program.
That issue also is of concern to Appleton. He is not certain what the cuts in EV rebates will mean to the program’s impact on consumers buying cars, but added there could be far less zero emission vehicles available this fall because car manufacturers shut down during the outbreak of the pandemic.
In announcing the budget extension, the BPU focused on changes that will allocate more funds to areas that have been top priorities of its clean-energy program.
“By emphasizing investments that will advance renewable energy, increase energy efficiency, and create jobs, the programs in the budget will help New Jersey address the threat of climate change and the rise to the challenge of our economic recovery from COVID-19,’’ said Joseph Fiordaliso, president of the BPU in a press release.
The news release made no mention of the cuts in the EV rebate program, nor other reductions in clean-energy programs, including a much smaller cut in the community solar program.