Back-of-the-envelope estimates indicate Murphy’s clean-energy agenda will easily cost more than $15 billion
Legislators are beginning to worry about just how much it will cost utility customers to finance the Murphy administration’s ambitious clean-energy agenda.
At a wide-ranging hearing last week, top officials from the administration laid out what actions they are taking to transform New Jersey into a 100 percent clean-energy economy by 2050.
Those initiatives include one of the nation’s most aggressive programs for offshore wind along the Jersey coast; mandates for the state’s gas and electric utilities to reduce their customers’ energy use; and plans to electrify the transportation system, to mention just some of the highlights.
“A lot of the items in your statement are not cheap,’’ Sen. Bob Smith (D-Middlesex) told New Jersey Board of Public Utilities’ Joseph Fiordaliso, the head of the agency carrying out many of the mandates. “How much is this going to cost us?’’
It is a question increasingly being asked and mentioned by consumer advocates, business lobbyists, and even by environmentalists who fear the rising costs of modernizing aging power grids and retaining nuclear power may crowd out investments in clean-energy programs.
Price tag: unknown
Part of the problem is the state has yet to calculate the cost of transforming New Jersey’s economy from one based on fossil fuels to clean energy, a big step that will mean more expensive bills, in some cases, largely funded by ratepayers.
“When we look at the clean-energy costs, and it is expensive and we know it is expensive,’’ Fiordaliso answered, “but you also have to look at the economic development activities that will evolve from it.’’ He cited the solar sector, where more than 6,000 jobs have been created while installing more than 100,000 solar systems in New Jersey.
But that success has not been cheap. By most estimates, those subsidies have cost ratepayers nearly $3 billion over the past decade to support the program.
The expense of future programs is more muddled. The BPU is currently reviewing three applications by offshore-wind developers to build up to 1,100 megawatts of capacity off the Jersey coast. The agency has declined to make the applications public, citing proprietary information, but the cost is projected to run into billions, again supported by ratepayers.
The Murphy administration also wants to develop huge new capacity for energy storage, capable of storing power created by intermittent sources of energy, like solar and wind. By 2021, Fiordaliso said the state wants to develop 600 megawatts of storage capacity, and 2,000 by 2030.
The state has not offered any projections about the cost, but a filing by Public Service Electric & Gas with the agency sheds some light. It proposes developing 35 megawatts of energy-storage capacity for $180 million.
Fiordaliso told the joint legislative committees who held the hearing Thursday in the State House Annex that he would provide the information they sought.
Evelyn Liebman, director of advocacy for AARP’s New Jersey state office, welcomed the president’s pledge, saying it is the job of the BPU to estimate how these costs will impact ratepayers.
“It is a sign the whole issue of how much consumers will have to is finally getting the attention it deserves,’’ she said. “It is just too much.’’
Her organization has submitted 23,0000 postcards to the governor’s office, questioning the roughly $12 billion of rate requests before the state BPU from gas, electric, and other utilities across the state. (Some of the requests have since been scaled back by the agency, among them a filing by Jersey Central Power & Light.) Another $300 million annual subsidy has been to PSEG Power and Exelon Corp. to avert the closing of three nuclear units in South Jersey.
Smith wondered whether there were ways to offset the costs to ratepayers, mentioning a carbon tax as one possibility. Taxes on carbon have been suggested in other states, but face a difficult time winning approval, as demonstrated last fall in the state of Washington when a referendum was defeated.