October 19, 2014


Aggressive energy goals draw the ire of large manufacturers, questions and concerns from Rate Counsel

The idea that 80 percent of the state’s electricity could be produced from renewable energy by 2050 drew withering criticism from consumer advocates and business interests yesterday during an initial hearing on a bill to establish that target.

The legislation (S-2444), backed by the solar-energy sector and with some reservations by clean-energy advocates, would set one of the most aggressive renewable energy goals, not only in the nation, but in the world.

But critics of the bill questioned not only the new costs it would put on New Jersey ratepayers, but also raised the issue of whether it is technologically feasible --particularly given a provision in the measure that would not include out-of-state renewable-energy sources in helping to meet the 80 percent target.

The bill was only up for discussion in the Senate Environment and Energy Committee, but its chairman, Sen. Bob Smith (D-Middlesex), said the legislation is likely to come up for a vote in either the panel’s next or its following meeting. It is likely to be voted out by the panel, but its fate in the Legislature is iffy at best. Even if the measure does win legislative approval, it is unlikely to be signed by Gov. Chris Christie as even its proponents acknowledge.

If it did become law, the bill would help eliminate electrical-generating capacity that is a big source of the greenhouse gas emissions that contribute to global climate change, advocates said. “We’re well positioned to take the lead in climate change,’’ Lyle Rawlings, president of the Mid-Atlantic Solar Energy Industries Association, a prime mover behind the bill.

But the director of the Division of Rate Counsel --Stefanie Brand -- disagreed, calling the bill unnecessary, unaffordable to New Jersey ratepayers, and counterproductive to the goal of reducing carbon emissions in a cost-effective manner. Brand argued that a bill passed by the Legislature in 2012 has stabilized the solar sector, making the rapid ramp-up in solar unnecessary.

Even without that ramp-up, particularly in solar (the new bill mandates nearly 14 percent of the state’s electricity come from solar systems by 2030), ratepayers are on the hook for $5.2 billion in costs from past solar requirements. The bill would add another $2.8 billion in ratepayer exposure, according to Brand.

“Devoting over $8 billion to meet less than 14 percent of our load is counterproductive and may interfere with the stated goal of this bill,’’ Brand said in written testimony submitted to the committee.

New Jersey ratepayers absorb most of the costs of promoting solar energy, and also would be hit with additional expenses if offshore wind farms are ever developed off the Jersey coast, a prospect that is not likely to happen anytime soon.

Beyond those costs to be incurred by ratepayers, others noted that the aggressive renewable-energy goals could result in billions of dollars in additional expenses over time in upgrades to the power grid to accommodate the increased reliance on solar and wind.

The costs occur at a time when the state’s electric and gas utilities already face requirements to invest millions of dollars into infrastructure to make the grid more resilient and resistant to storms, according to Andrew Hendry, president of the New Jersey Utilities Association.

“The upward pressure on utility rates that would result from the drastically increased RPS (renewable portfolio standards) in this bill must be considered in the context of the hundreds of millions of dollars in investment in the electric distribution system being made right now,’’ Hendry said in his written testimony.

For instance, Public Service Electric & Gas, the state’s largest utility, earlier this year won approval to invest $1.2 billion to make its gas and electric infrastructure more resilient to storms, such as Hurricane Sandy.

“New Jersey’s ratepayers cannot afford this,’’ said Elvin Montero of the Chemistry Industry Council, citing the $3 billion in added costs to ratepayers that fall mostly on large manufacturers because of their heavy reliance on energy.

“New Jersey’s high electricity rates, multibillion dollar subsidies to investors of solar installations, and other surcharges and taxes will continue to put our members at a competitive disadvantage, driving more high-paying manufacturing jobs out of the state,’’ Montero said.

One issue that even advocates of the aggressive renewable-energy goals found worrisome in the bill was a provision stipulating that only in-state sources of solar, wind, and other clean-energy technologies would be used to determine whether the 80 percent target was being met.

“We probably won’t get there without these (out-of-state) resources,’’ acknowledged David Pringle, campaign director of NJ Clean Water Action. “This bill is a start. We need this bill because of climate change.’’

Jeff Tittel, director of the New Jersey Sierra Club, agreed, saying the state needs to include out-of-state renewable energy sources. Although he expressed some reservations about some provisions in the bill, he said the state has to start moving forward on renewable energy because if it does not, cheaper natural gas generation may supplant the need for those clean-energy projects.

After the hearing, Smith indicated he would remove the prohibition against out-of-state renewables counting to meet the goal.

Steve Goldenberg, an attorney for manufacturers who use a lot of energy, questioned whether the 80 percent goal is even technologically feasible.

“As a practical matter, it is hard to figure out how to maintain the reliability of the power grid when 80 percent of the power is available only part of the time,’’ he told the committee.

1 comment:

  1. Goldenberg said “As a practical matter, it is hard to figure out how to maintain the reliability of the power grid when 80 percent of the power is available only part of the time."

    I'm guessing that Mr Goldenberg is not aware of the new revolution in battery storage technology, which has plenty of time to innovate, scale up, and bring down costs before 2050. I'm thinking more like 2025 or sooner when it gets to grid parity combined with solar.