Despite the diversion of nearly $300 million from two energy funds, Board of Public Utilities President Lee Solomon told lawmakers today the agency will fully finance all of its pending clean energy projects.
Solomon, called before the Assembly Telecommunications and Utilities Committee to defend the diversion of funds by the Christie administration, argued there is still enough money in one of the funds to fully meet all of the state's clean energy obligations. He added that federal stimulus money might be able to fund plans to build clean-running power plants.
In trying to close an estimated $2 billion deficit in the current state budget, Gov. Chris Christie proposed last month tapping $158 million out of the state’s clean energy fund and diverting another $128 million out of the Retail Margin Fund. The moves sparked criticism from lawmakers and environmentalists who say it will siphon money away from projects that could create jobs and stimulate a green economy.
In reviewing the clean energy program, Solomon, said staff assured him there is still enough money in the fund to "satisfy each and every obligation that is out there or is planned." The fund, created by lawmakers when the state deregulated the energy industry a decade ago, raises about $20 million every month from gas and electric customers from a surcharge on their bills.
The clean energy fund helps finance energy conservation projects and renewable energy projects, particularly installing solar energy units on homes and businesses. It is critical to New Jersey's policy goals of reducing energy consumption in the state by 20 percent by 2020 and having cleaner sources of power, such as solar and wind projects, account for 30 percent of the electricity used by customers in 2020.
As for the Retail Margin Fund, Solomon said the state might be able to tap into $73 million in unused federal stimulus money to help finance the construction of 22 cogeneration plants, which produce both steam and electricity simultaneously. Last year, the legislature approved a bill appropriating $60 million from the fund to help build these plants, financed by a surcharge on businesses that do not shop around for new electricity suppliers.
The state has reviewed and found 22 applications to build such power plants worthy of state assistance, Solomon said. The projects would require about $48 million in assistance to move forward, he said.
Assemblyman Upendra Chivukula, the Democratic chairman of the committee, was not satisfied by the explanation, calling the diversion of funds "disheartening. It is going to impact a lot of businesses and it is going to impact a lot of jobs," he said.
Environmentalists agreed. "When you take money away from these funds, it is going to affect a lot of jobs in New Jersey," said Jeff Tittel, a lobbyist for the Sierra Club of New Jersey. "It is really a new kind of tax."
Sara Bluhm, a lobbyist for the New Jersey Business and Industry Association, told the committee it should look at both of the two funds in question and determine whether they need to raise as much money as they currently do in light of the state’s fiscal problems and high costs of utility bills in New Jersey.