Clean energy supporters argued in a hearing for the next New Jersey energy master plan that an aggressive and broad embrace of electrification would generate enough money to help fund clean energy projects and protect ratepayers. 

Speakers at the fourth, and final, online public forum, held June 3 by the New Jersey Board of Public Utilities (BPU) to solicit input for the successor to the state’s 2019 Energy Master Plan, pushed state officials to include extensive investment in storage and in-state electricity generating projects in the plan. 

They also sought a cost evaluation that would include the direct expenses of electrification strategies and show the costs avoided if the effects of climate change and pollution are mitigated, such as fewer health services needed. Some speakers argued that electrification strategies would pay for themselves. 

Andy Wall, a board member of the Mid-Atlantic Solar and Storage Industries Association, said that instead of spending $600 million to buy clean energy from out of state, as the organization forecasts for this year, the state should invest within its own borders. 

“We need to take those resources and focus them on clean energy generation projects closer to home that actually matter to our own in-state generation mix,” he said. 

He said while the state goal for 2023 was for clean energy to account for 22% of all energy, only about one-third of that was generated in state. The rest “came from renewable energy projects in the Midwest, mostly Illinois, but also Indiana, Ohio, even North Dakota and some other places on average 800 miles away. “  

Michael Winka, a former BPU clean energy policy adviser, said the state’s electric system generates about $11 billion in revenue, which would increase to $22 billion if electricity use doubled as forecast. That would provide plenty of money to support the energy transition, he said. 

“The cost to upgrade the distribution system at max is probably $4 billion to $5 billion range,” he said. 

Winka called the 2019 master plan a “good first step” but said the next version has to better evaluate all energy systems and provide a “detailed cost, avoided cost and benefits, of not using oil, gasoline and diesel.” The plan also should “detail the revenue increases that go along with an increase in electricity usage.” 

Deeper Study

BPU officials said they’re looking to produce a “deeper more robust study,” than the 2019 version, which was compiled at the request of Gov. Phil Murphy (D). While it has underpinned much of the state’s clean energy strategy during Murphy’s tenure, business groups have criticized the plan for failing to include an assessment of the cost of dramatically cutting fossil fuel use. 

The next plan, state officials said, will include policy analysis and a review of best practices nationally, modeling of the impact of the plan on gas and electricity rates and a consideration of using gas as a backup heat source in the coldest months of the year. (See NJ Wrestles with Clean Energy Priorities.)   

With the public hearings completed, the BPU will conduct “workshop-style gatherings of stakeholders.” The agency plans to release a report draft in the third quarter of 2024 and the final report in the fourth quarter. According to the BPU, the report will be led by the Governor’s Office of Climate Action and the Green Economy, with input from multiple state agencies. A Final Comprehensive Climate Action Plan will be released in the third quarter of 2025. 

More than 50 people spoke over three hours at the first session, on May 20, and about two dozen voiced their opinions at the final hearing. Among the speakers June 3, Andrew Gold, staff attorney for the New Jersey Rate Counsel, offered a note of caution, urging the master plan drafters to “view modeling results with a healthy degree of skepticism.” 

“Projecting the future during fundamental changes over long periods is challenging,” Gold said. “Modeling results are frequently overly optimistic and make many assumptions that are impractical to implement.” 

He said the BPU should compare the 2019 master plan modeling assumptions to what happened and ensure the 2024 energy master plan incorporates the past. Gold urged the BPU to make its “modeling platform” public, calling it “unreasonable to ask ratepayers to pay billions of dollars based on a model that the public cannot access.” 

At the BPU’s May 22 master plan hearing, the Division of Rate Counsel said state energy efficiency programs, many of which are focused on helping low- to moderate-income ratepayers, should be more cost effective and the state should hold “utilities and contractors accountable for their performance.” Some programs should be run by utilities and others by the BPU, said Lisa Littman, assistant deputy rate counsel, who urged the board to “refrain from establishing utility-run monopolies.” 

Solar-powered Green Hydrogen

Utilities emphasized the need for planning, and support for their own initiatives, some of which are underway. 

“Comprehensive integrated distribution planning is vital and will help identify utilities’ resource and customer needs,” said Noreen Giblin, associate counsel state regulatory at PSE&G. 

“Improvements to regional load forecasting are essential for effective transmission planning, and in determining how much generation needs to be built and where, while providing visibility into the amount of clean generation needed to reach stated objective,” she said.  

Giblin urged the state to strengthen programs to boost medium- and heavy-duty vehicle infrastructure. And she said PSE&G has proposed “the adoption of time use rates in its current base rate case to …. encourage residential customers to shift electricity usage away from peak demand times, saving money.” 

Melissa Orsen, senior vice president at South Jersey Industries and president of SJI Utilities, which owns two gas utilities in new Jersey, said the company aims to reach 100% carbon-neutral operation by 2040. The effort includes spending 25% of the utility’s annual capital expenditures on sustainability projects such as repairing leaks, replacing the legacy pipeline distribution system with “modern resilient facilities” and investing in renewable natural gas (RNG) and green hydrogen. 

“We envision a future where New Jersey residents transition to clean energy but continue to use their gas appliances with RNG and green hydrogen being critical components of the gas stream,” she said, adding that “our ability to achieve these goals in many ways depends on the state support as expressed in the next EMP.” 

The utility’s effort also will depend on how the BPU responds to utility on-site solar projects, she said, adding that this year, it will begin “producing green hydrogen powered by solar energy” in South Jersey that will be blended into the gas system. 

Solar Parity with Wind?

Clean energy developers said the state needs to do more to ensure their sectors become the major energy providers needed to meet state clean energy goals. 

Lyle Rawlings, president of the Mid-Atlantic Solar and Storage Industries Association, said he would like to see the state reform the “stark disparity in the state’s investment of effort and money to help the offshore wind industry with infrastructure investment, flexibility, workforce development, helping hand in tough times and much more.” 

“We recognize the absolute necessity of offshore,” he said. “But we want to see an equally comprehensive and proactive approach for solar.” 

In a subsequent interview with NetZero Insider, Rawlings said the issue is a “long-standing gripe that we’ve never spoken about.” He said his concerns include the amount of money the state has committed to offshore wind infrastructure while it has “never spent a dime on infrastructure to encourage solar.”  

Another concern, he added, is that in the post-pandemic period — when developers experienced cost increases and supply chain issues — the BPU refused to extend project deadlines, resulting in “hundreds of projects that had to be canceled before they were done.” 

Evan Vaughan, executive director of the Mid-Atlantic Renewable Energy Coalition, which represents 50 utility scale wind, solar and storage developers, said the state needs to address the fact it is “woefully behind” in its energy storage goals, specifically the goal of having 600 MW of storage in place by 2021 and 2000 MW of storage in place by 2030. 

“The PJM market does not incentivize energy storage currently, and so a state incentive program is critical for any meaningful level of deployment,” he said. He encouraged New Jersey to conduct long-term planning for its transmission system, including with other states. 

“We ask New Jersey to look closely at near-term opportunities to coordinate with neighboring states like Maryland and Delaware to facilitate no-regrets cost-saving transmission planning for offshore wind integration and for the integration of other energy sources like solar and storage,” he said.