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The state Board of Public Utilities this week postponed action on a plan to spur home and building electrification.   

In comments submitted to BPU last month, NJBIA Deputy Chief of Government Affairs Ray Cantor said beyond the concerns of cost, efficacy and reliability of these state plans, the agency actually doesn’t have the authority to direct such action. 

“From a legal perspective, we are unaware of any statutory authority for the BPU to use its regulatory and rate authority to compel public utilities to initiate programs to compel building electrification,” Cantor submitted to BPU on June 27. 

“Thus, while the BPU may wish to use its authority that it otherwise has to control rates or act under the Clean Energy Act to compel energy efficiency, it lacks the ability to compel public utilities to design rate structures and incentive programs to implement an electrification program.   

“Various bills have been introduced in the Legislature to give the BPU the exact authority it is now seeking to exercise.  None of those bills have become law.” 

FOLLOWING AN ORDER

The BPU’s straw proposal, announced on June 16, asks utilities to “help educate customers about the benefits of home electrification” and open up access to federal incentives that “put money back into customers’ pockets when they adopt heat pumps.” It also aims to make buildings electrification ready. 

The proposal marks the first action by BPU to comply with an executive order issued by Gov. Phil Murphy to install zero-carbon emission heating and cooling systems in 400,000 homes and 20,000 commercial properties by 2030. 

Cantor said that the state’s Energy Master Plan is a planning document, but not one that create authority. 

“While the BPU may wish to use its authority that it otherwise has to control rates or act under the Clean Energy Act to compel energy efficiency, it lacks the ability to compel public utilities to design rate structures and incentive programs to implement an electrification program,” Cantor wrote. 

Cantor also added NJBIA’s concern with BPU’s apparent efforts to merge energy efficiency programs with a building electrification policy. 

“These are separate policies with separate metrics and should be treated as such,” he said. “The BPU should not seek to cover the cost of building electrification through hiding it in rates through the efficiency program.  

“The metrics for energy efficiency should also not be merged with electrification. Such merger hides the risks, costs and benefits of each program. Each should stand or fall on its own merits and the public should not be fooled by thinking that converting to electrification would result in more benefits than it would in actuality. As in all things, transparency results in the best public policy.” 

COST CONCERNS 

In his written comments, Cantor also said the BPU proposal fails to adequately address considerable cost issues – and noted its importance. 

“While we favor cost effective energy efficiency programs and support their implementation, the straw proposals do not account for the cumulative costs of all the various decarbonization efforts being placed on the backs of ratepayers,” Cantor said. 

“Nor is there an overall plan or analysis of what the Administration’s decarbonization policies will cost the state. The BPU cannot ignore cost issues.  Whether it be taxpayer monies or ratepayer’s, it is essentially the same people and businesses who are paying these costs.     

“The BPU was created, in large part, to ensure that utility rates were affordable,” Cantor added. “Talk of ‘least cost’ or the failure to add up all the various programs, be they taxpayer, product, or ratepayer funded, is problematic.  We continue to ask the Board for a comprehensive cost impact assessment of all the various clean energy and decarbonization programs being proposed.” 

BPU President Joseph Fiordaliso said the postponement of any action on the proposal was due to considerable input from various stakeholders. He suggested it may be taken up at a later BPU board meeting. 

To see Cantor’s full comments to the state BPU, click here.