The state is hiring an outside consultant to analyze what its transition to clean energy will cost ratepayers, an assessment repeatedly delayed even as policymakers approve projects saddling customers with billions of dollars in new charges.
The analysis was initially promised to be part of a new Energy Master Plan adopted 16 months ago but was never included. It was paused in the middle of the COVID-19 pandemic when a partial shutdown led to a crippled economy. The master plan provides a blueprint of how New Jersey is going to achieve 100% clean energy by 2050 but fails to include detailed data on what it will do to customers’ bills.
A new analysis is projected to take 18 months, a time frame in which the Murphy administration is likely to make big financial decisions involving expensive clean-energy projects but without that information being made public. The name of the consultant is not being disclosed until the contract is approved by the state treasurer’s office. Also not being disclosed for now is the amount of the contract.
Not a consideration at the polls
The 18-month time frame also means that whatever the cost is for the ambitious clean-energy program will likely not be a point of controversy in this fall’s gubernatorial campaign.
The absence of a detailed fiscal analysis of the recommendations in the Energy Master Plan has been a bone of contention among consumer advocates and business groups for the past couple of years. They fear the 18-month time frame will mean the Murphy administration making key decisions on clean-energy programs before knowing what those costs will be for ratepayers, and who will subsidize many of those efforts.
“They have got this process backwards,’’ said Dennis Hart, executive director of the Chemistry Industry Council of New Jersey, whose clients use large amounts of energy and pay a significant share of those costs. “They should have done this months ago.’’
The New Jersey Board of Public Utilities already has approved major initiatives to begin implementing parts of the Murphy’s clean-energy agenda. Since last September, the board has approved huge new investments, again subsidized by ratepayers, that allow seven utilities to spend $1.7 billion on new programs to help customers reduce gas and electric use.
Just last week, the BPU also approved a three-year extension of subsidies to the Public Service Enterprise Group and Exelon Generation for its fleet of three nuclear power plants in South Jersey. The subsidies could amount to $900 million over the three years and are designed to keep the units from closing.
New Jersey Division of Rate Counsel Director Stefanie Brand said she was happy to hear that the state has moved to complete the analysis, but seemed surprised when told it would be an 18-month study.
Numbers coming too late?
“It does us no good if we get these numbers after these decisions are made,’’ Brand said. The state is in the middle of a controversial proceeding to restructure New Jersey’s solar program; figuring out how it is going to electrify its transportation sector; and ramping up development of offshore wind farms, she noted.
Next month, the BPU will decide what companies win the right to build up to 2,400 megawatts of new offshore wind farms along the Jersey coast. If the state decides to build the full 2,400 megawatts, the costs could rise to at least a $2 billion commitment on the part of ratepayers, according to some observers.
Raymond Cantor, a vice president of the New Jersey Business & Industry Association, questioned why it will take so long to finish the study. “You can’t make intelligent policy decision about energy without knowing how much it will cost and who will pay for it,’’ he said.
BPU President Joseph Fiordaliso defended the study, saying it will develop a “thorough and detailed’’ analysis of what the clean-energy program will cost ratepayers, an issue of top concern to Gov. Phil Murphy.
Brand appeared to urge a quicker completion of the analysis. “I wouldn’t buy something if I didn’t know its price,’’ she said. “We need to have these numbers if we are going to make good choices in the days ahead.’’