Op-Ed: The big and costly flaw in Gov. Murphy’s Energy Master Plan

Being forced to switch over to electric heat in homes and other buildings is not something New Jerseyans expected
Eric DeGesero

Over the course of the past few weeks, we have turned the clocks back and the thermostats up, which means winter isn’t far behind. This year’s winter festivities will be very different, and hopefully we can return to normal next year. Unfortunately, in the coming years, winter will be very different as a result of another heretofore unknown visitor: Gov. Phil Murphy’s Energy Master Plan.

Whether you agree or disagree, Gov. Murphy campaigned on generating electricity from renewable sources and powering cars with electricity. Therefore, the Energy Master Plan (EMP) seeking to implement these policies is no surprise. However, forcing the 87% of New Jerseyans who use natural gas, oil or propane to surrender our existing central heating systems for electric heat is a surprise since it is not something the governor campaigned on. Nevertheless, the EMP is moving forward with this radical transformation of our state, and there may be nothing for the Legislature to do but watch.

For many of us, our familiarity with electric heat is the “old” electric heat — electric resistance heat. This is the baseboard strip in a room with its own thermostat. Electric resistance heat is cheap to install but expensive to operate.

The “new” electric heat is a heat pump, which is basically an air conditioner that works in reverse. An air conditioner removes heat from warm air inside the home and releases it outside. A heat pump removes heat from ambient air outside the home, increases its temperature, and releases it inside to heat the home. As with much of the EMP, heat pumps sound wonderful until you have to figure out how to stay warm heating with one — and paying for its installation and use.

Heat pump technology has improved greatly over the years, but there are still times when it is so cold the heat pump will not be able to keep you comfortable, and backup heat is needed. If electric heat cannot keep you comfortable when it’s really cold and the EMP has outlawed fossil fuel, what’s the backup heat? Electric resistance heat strips integrated into the central heat pump system.

The EMP states that the “one-time” cost to install a heat pump is $4,000-$7,000, which is in the range of installing a new furnace. This cost citation comes from an analysis of “mini-split” heat pumps — the kind that provides comfort to one or two rooms, not the entire house — installed in Massachusetts. The fact that the cornerstone of this EMP cost projection comes from a completely different type of heat pump than the one the authors are advocating tells us all we need to know about the EMP. Additionally, Massachusetts did not make its citizens give up their existing central heating systems. Analysis of nearly 15,000 homes in Massachusetts found that 81% of those who had a heat pump installed used it for supplemental heat only; and of the 19% who used it as their primary source of heat, 89% had a backup source of heat.

Putting ‘new’ heat in ‘old’ houses

One of the many failures of the EMP is it does not appreciate the different types of heating systems in New Jersey, and therefore dramatically underestimates the cost to install a heat pump. This “new” heat must be shoehorned into a lot of “old” houses; 68% of New Jersey homes were built before 1980, and 50% were built before 1960.

Older homes tend to have boilers that heat and circulate water or steam through radiators, as opposed to a furnace that heats and circulates air through ducts. While there are heat pumps that can be integrated with a boiler, they are only capable of circulating 110-degree Fahrenheit water though the baseboards. This temperature is below the 180 F that hydronic boilers heat and circulate. This means a thermostat set to 70 F on a 5 F day will not heat the room to that temperature. And for homes with steam boilers, of which there are many in Bergen, Essex, Hudson, Passaic and Union counties, there is no way to integrate a heat pump.

North Jersey has five times and South Jersey has 2 1/2 times the number of boilers as the national average. This means there are many homes in New Jersey that do not have duct work to connect to or requisite electric service to power a heat pump. Depending on the specifics of the home, the additional construction project necessitated results in the installation of a heat pump costing homeowners $6,500 to $32,000 above the replacement cost of an existing heater. The EMP also mandates all water heaters be replaced with a heat-pump water heater.

The Murphy administration was presented with these facts in the comment period on the draft EMP. What was the response? An acknowledgment that there are a lot of boilers in New Jersey and many homes that lack duct work but the final EMP stated the cost for the typical residence to install a heat pump will be … $4,000-$7,000.

While the cost estimate for installing a heat pump is willfully wrong, at least the EMP tried to answer it. What additional costs will we have to bear for heating with electricity?

Building out NJ’s electric infrastructure

How many tens of billions of dollars will it cost us as ratepayers to build out the electric infrastructure to accommodate all-electric cars and buildings? With all heat being electric, New Jersey will move from peaking electric demand in the summer months to the winter months. How will this be reflected in the rates we pay? According to the U.S. Energy Information Administration, in 2019, New Jersey’s electric rates were 27% higher than the national average. Will New Jersey embrace time-of-use pricing, meaning we will pay more per kilowatt hour based on when during the day we want to stay warm? From now on, whenever you hear how great “smart meters” are, know that smart meters are an essential aspect of time-of-use pricing. The study detailing the cost to ratepayers for implementation of the EMP was due a year ago. We are still waiting.

For as radical a proposal as the EMP is, we are safe in knowing that Gov. Murphy will be checked by the Legislature in his desire to implement it. Or will he?

The existing New Jersey Energy Subcode allows for deviations from national model building codes that could mandate all-electric homes for new construction. And while the existing New Jersey Rehabilitation Code does not mandate renovations be undertaken, it could be amended to do so, which could mandate all-electric HVAC systems in existing buildings. Neither of these changes would require legislative approval.

In existing homes, a mini-split heat pump may serve multiple useful purposes, for example providing heat and air conditioning in an added-on room so new radiation or duct work is not needed, or to provide heat in “shoulder” months like November and March when it is chilly but not cold. But mandating that New Jerseyans give up our existing central heating systems and have to undertake a construction project simply to stay warm is bad policy and worse economics.

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