The stakes are high.
The losses have been mounting.
And the odds of success are as long as they’ve ever been.
Still, according to a Politico report this past week, the Murphy administration and some Democratic lawmakers are doubling down on the governor’s goal of having New Jersey generate all its electric power from zero-carbon sources by 2035.
That push would come in the form of an updated bill during the year-end, lame duck legislative session.
By codifying the main thrust of Murphy administration’s Energy Master Plan into law, New Jersey ratepayers – who are already looking at 20% energy hikes this summer – can expect higher energy bills and less energy reliability going forward, said NJBIA Deputy Chief Government Affairs Officer Ray Cantor.
“The Legislature needs to understand that this is only going to worsen our affordability and reliability issues,” Cantor said.
“As we said when the Energy Master Plan was introduced six years ago, you cannot put ideology ahead of practicality as part of an energy transition. The rate increases and sticker shock in our electric bills resulting from New Jersey going from a net exporter of energy to a net importer of energy is something we and others predicted six years ago.
“We continue to stress: New Jersey still very much needs an all-of-the-above approach if its energy transition is to work. And, yes, that includes clean natural gas, which currently accounts for nearly half of our total electricity generation and 72% of our home heating fuel.”
“Put simply, it's imperative to bridge that disconnect between aspiration and reality,” Cantor said.
UNSPOKEN CHILL FROM THE BILL
While an updated bill to 2023 legislation codifying the state gets its power from only zero-carbon sources has not been posted, Cantor said it’s possible that it will have language suggesting affordability protections.
Cantor, however, said he’s concerned that language will only be used to assuage the many New Jersey residents who are struggling to afford their energy bills.
“We don’t need window dressing, and we don’t need optics,” Cantor said. “What we need is more energy, not less.
“If this bill becomes law, we will have less energy. We will continue to see that supply and demand imbalance that we all forecasted long ago and is now happening. New Jersey residents are struggling to afford their energy bills. That will get worse by eliminating natural gas as a source of power prematurely.”
The 2023 bill did allow gas-powered energy companies to match renewable energy credits with each unit of electricity they sell. In other words, those companies could sell customers gas power, as they purchase credits from wind, solar and nuclear plants outside of New Jersey.
But Cantor said, beyond the concern of relying on other states for energy credits, such a provision only adds uncertainty and less investment from energy companies.
“You could have a power generator who may want to come here or expand here, but they need regulatory certainty in order to do that,” Cantor said. “This legislation, in any form, will disincentivize such investment at a time when we still very much need natural gas power.”
BLAME GAME
In a gubernatorial election year where high energy costs have become a prime issue, PJM Connection, the grid operator for New Jersey and 13 other states and the District of Columbia, has come under criticism by Gov. Phil Murphy and other Democrats for the way basic generation service costs are structured, as well as auction rules that exclude generation capacity from being sold.
Republicans, conversely, have placed the blame squarely on the “failed energy policies” of the Murphy administration, which saw a great emphasis on offshore wind that never materialized.
Cantor said the easiest way to observe where the true reason for blame resides in warnings issued by nonpartisan groups like NJBIA when the Energy Master Plan was announced in 2019.
“Those criticisms of PJM are not without some merit,” Cantor said. “You can also look at the speed of which interconnection approvals are made by the Federal Energy Regulatory Commissions as a contributing factor.
“But they are not the major thrust beyond the bill increases we are seeing this summer. New Jersey right now is a state that doesn’t produce enough energy to keep our own lights on, and we have advanced policies to eliminate sources that provide much of our electricity.”
“As we’ve said before, that’s not a winning combination when it comes to the balance of supply and demand. If the EMP is codified into law at the end of the year, we have grave concerns it will only get worse because there are no realistic plans in place to increase our in-state generation, while we all know our demand will continue to increase.”
