The state’s plans to transform New Jersey into a clean-energy economy achieved modest goals in 2020, but it will face more significant challenges next year as officials continue to cope with a once-in-a-century pandemic.
Nevertheless, the state established a new energy efficiency program that could result in utility customers saving money by reducing how much gas and energy they consume. Offshore wind projects continued to move forward. And the state announced a new port in South Jersey to draw manufacturing facilities and create jobs in the emerging offshore wind sector.
It all came about even as the public health emergency created by the COVID-19 virus killed more than 16,000 residents and left more than 1.8 million jobless since last March, according to the state departments of Health and Labor and Workforce Development.
The severe economic disruptions caused by the pandemic, however, raise questions about whether state regulators will scale back some of the programs proposed by utilities to help meet clean-energy objectives. Those programs include efforts to electrify New Jersey’s transportation system, which accounts for more than 40% of the state’s greenhouse-gas emissions.
A stipulated settlement between the Board of Public Utilities’ staff and Atlantic City Electric will let the utility spend $14.79 million in expanding its infrastructure, including the public charging stations needed to “refuel” electric vehicles — far less than the $42.1 million the company had sought to invest.
In another rate case, the BPU approved increases in bills for customers of Jersey Central Power & Light that would boost monthly costs to the typical residential customer by $4. The new rates will not take effect until next November because of the hardship caused by the pandemic.
Meanwhile, a regional effort to reduce greenhouse-gas emissions from cars got off to an inauspicious start when only three states — Connecticut, Rhode Island and Massachusetts — as well as the District of Columbia, opted to sign up for the program, dubbed the Transportation & Climate Initiative. New Jersey and seven other states balked at joining the alliance, although they suggested they may do so in the future.
Big bills coming due
Hundreds of thousands of utility customers, including small commercial businesses, have racked up huge unpaid bills during the pandemic. The crisis led the BPU to launch a proceeding on how to help those in arrears pay their bills once a moratorium on shutoffs is lifted, now scheduled for March 15.
Like many other matters pending before the BPU, that issue is not likely to be addressed until next spring, when a range of other controversial topics will require action.
Those questions include whether to drop out of PJM Interconnection, the regional power grid, over disputes about how its policies could undermine the state’s clean-energy goals; whether to continue to shell out ratepayer subsidies to keep New Jersey’s three nuclear plants from closing; and deciding how developers will bring power from new offshore wind farms to the customers who will use it.
In addition, the agency will have to decide the extent of subsidies for a new solar program meant to encourage developers to continue building in New Jersey. Solar power is expected to provide 34% of the electricity supplied to customers and businesses by 2050, but there has been increasing concern over whether ratepayer subsidies are too lucrative for those developers.
Nuclear subsidies remain controversial
The same concerns revolve around ratepayer subsidies, now amounting to $300 million annually to Public Service Enterprise Group/Exelon to keep their nuclear plants from closing. Those facilites now provide more than 90% of the state’s carbon-free electricity to customers. Both companies are seeking a three-year extension of the subsidies, a matter expected to be decided by the BPU in June.
In the coming year, the BPU also is expected to decide on whether to approve utility filings to install smart meters in customers’ homes. The technology, called advanced metering infrastructure (AMI), allows two-way communication between homes and utilities. It is considered crucial to integrating intermittent renewable energy sources, like wind and solar, into a reliable power grid.
Like other clean-energy programs, however, advanced metering is expected to boost costs for customers — a concern to both residential and commercial users. Just how much is uncertain, although the BPU did an analysis of what implementing the entire clean-energy agenda would cost ratepayers. Earlier this month, however, the board decided the yet-to-be-made-public study needs to be revised given the scope of the coronavirus pandemic.
In response to COVID-19, New Jersey’s Division of Rate Council called on the state to hold off approving any rate cases, including those involving clean-energy programs, until the pandemic eases.
Getting electric vehicles on the road
In the short term, the biggest impact could be on the move to electrify the transportation system, primarily light-duty vehicles. By 2025, New Jersey needs to have more than 330,000 zero emission vehicles on the road, largely expected to be electric vehicles.
That goal could be hard to achieve, however, because the state seems to be curbing the role of New Jersey’s electric utilities in building the infrastructure to charge those vehicles. Another delay can be traced to the Murphy administration’s decision to hold off joining a regional alliance with other states to build out a charging infrastructure.
Even in the area of offshore wind, policymakers face a decision on how to move forward, particularly over how to bring the power from those wind farms on shore. The debate focuses on whether an offshore wind transmission system could wheel power up and down the coast with less disruption to the environment and at a lower cost to consumers.
Finally, another issue where the state is lagging is in developing energy storage to help make intermittent sources like solar and wind more reliable. By the end of 2021, the state is required to develop 600 megawatts of energy storage, a goal most agree it will not meet.
Unlike the past four years, the Murphy administration’s aggressive clean-energy agenda is likely to be aligned with the goals of the new administration in Washington. At the very least, it should bolster New Jersey’s efforts to deal with climate change by increasing investments in energy efficiency and rolling back environmental regulations weakened by the outgoing Trump administration.