Energy and Environment MonitorOver the years, New Jersey has been the subject of many jokes and cheap shots. We know all about that in West Virginia. So it’s not my intent to take any cheap shot at the fine people of New Jersey. It is my intent to question the wisdom of the political leaders of New Jersey regarding their headlong rush towards a so-called “Green Economy” in the midst of the worst economic downturn in that state and the nation since the Great Depression. Proponents of the new Green Economy consider renewable/alternative energy sources to be a cornerstone of that movement.
This article will briefly summarize the current economic situation in New Jersey, and then contrast that with the aggressive expansion of the state’s renewable energy portfolio standard.
New Jersey’s Economic Mess
The citizens of New Jersey already put up with one of the highest state tax burdens. For example, New Jersey has the highest property taxes in the nation, averaging more than $7,000 per household. Now they are faced with the prospects of potential new tax increases and slashed state and local government services due to the state’s current year and projected future multi-billion dollar budget shortfalls. For the 2010 fiscal year, New Jersey is likely to cut their state budget by about $3.5 billion because of a steep drop in revenues. Even with those cuts, there are already worries that the state will still not have sufficient revenue in the next fiscal year to avoid another massive budget deficit. The state’s unemployment rate in June 2009 was 8.8%.
Yet in the face of a true economic crisis, New Jersey’s elected representatives, along with their appointed agency bureaucrats, are moving forward with blinding speed to substantially increase the requirements for alternative energy generation. The inevitable result of this government intervention in the energy marketplace will be to substantially increase the cost of electricity to the residents and businesses of New Jersey.
The remainder of this article will summarize New Jersey’s rush into the brave new world of alternative power generation by government fiat.
New Jersey Renewable Portfolio Standard
On April 12, 2006, the New Jersey Board of Public Utilities (BPU) approved new regulations that significantly expanded the state’s renewable portfolio standard. New Jersey's renewable portfolio standard (RPS) -- one of the most aggressive in the United States -- requires each supplier/provider serving retail customers in the state to include in the electricity it sells 22.5% qualifying renewables by 2021. The previous New Jersey RPS had called for 4% renewable generation of electricity. The 2006 RPS substantially increases the required percentages of "Class I" and "Class II" renewable energy, as well as the required separate percentage of solar electricity. By reporting year 2021, 2.12% solar electricity is required.
The New Jersey RPS defines "Class I" and "Class II" renewable energy as follows:
- "Class I" renewable energy is defined as electricity derived from solar energy, wind energy, wave or tidal action, geothermal energy, landfill gas, anaerobic digestion, fuel cells using renewable fuels, and -- with written permission of the New Jersey Department of Environmental Protection (DEP) -- certain other forms of sustainable biomass.
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"Class II" renewable energy is defined as electricity generated by hydropower facilities no greater than 30 megawatts, and resource-recovery facilities approved by the DEP and located in New Jersey. Electricity generated by a resource-recovery facility outside New Jersey qualifies as "Class II" renewable energy if the facility is located in a state with retail electric competition and the facility is approved by the DEP.
- Note that unlike the recently enacted renewable energy legislation in West
Virginia (SB 297- Alternative & Renewable Energy Portfolio Act), New Jersey does not consider innovate uses of coal (clean coal combustion, coal-to-liquids, and other advanced coal technologies) to fall within the definition of renewable energy.
And it doesn’t end there -- the New Jersey BPU will adopt rules to determine the minimum percentages for reporting year 2022 and beyond. These minimum percentages will be equal to or greater than the minimum percentages required for reporting year 2021.
New Jersey Energy Master Plan
However, these aggressive RPS mandates were not enough for New Jersey’s Governor John Corzine, who has upped the ante once again. In October 2008, Governor Corzine released the latest version of New Jersey’s Energy Master Plan (EMP). The 101 page Plan “proposes a road map to guide us toward a responsible energy future with adequate, reliable energy supplies that are both environmentally responsible and competitively priced.”
Included as one of the EMP’s primary goals is the following: “GOAL 3: Strive to surpass the current RPS goals with a goal of achieving 30% of the State’s electricity needs from renewable sources by 2020.
While the EMP’s new RPS goal is just that, a goal, it is fascinating to note that the state has gone in a few short years from a 4% RPS to a 22.5% RPS to a 30% RPS.
In a state where customers have seen double-digit increases in electric bills in recent years, the EMP relies on some new and unproven technologies to reduce the state's reliance on fossil fuels for generating electricity.
Ed Selover, general counsel for Public Service Enterprise Group, which operates the state's largest utility and three nuclear generators in South Jersey, said the company welcomes the opportunity to get more involved in energy efficiency and conservation programs. But he warned of the cost of putting too much emphasis on developing renewable energy. "Energy efficiency, if it's done right and the utilities are involved, can end up reducing usage and reducing bills," Selover said. "When you get into renewables, that tends to increase bills. I don't think there's price relief here."
“It looks like we're heading to a very high-cost energy future," said Jeff Tittel of the Sierra Club of New Jersey.
Indeed it does.
For further details on the topics within this article, see the following web sites:
- New Jersey 2006 Renewable Portfolio Standard
http://www.njcleanenergy.com/renewable-energy/home/home
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=NJ05R&state=NJ&CurrentPageID=1
- New Jersey 2008 Energy Master Plan
http://www.nj.gov/governor/news/news/2009/approved/20090331c.html
http://www.nj.com/business/index.ssf/2008/04/how_much_will_the_states_energ.html
- New Jersey’s 2009 Economic Woes
http://www.nj.com/news/index.ssf/2009/01/corzine_plans_to_slash_state_b.html
http://www.nj.com/news/index.ssf/2009/02/with_budget_crisis_worsening_c.html
This article was excerpted from publically available information, and was authored by Rick Wilson, Acacia Environmental Group LLC. The opinions expressed in this article are those solely of the author. For more information on the author see here.
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