Legislation includes money for solar and energy efficiency — and boosting carbon-free electricity — at ‘huge cost,’ says rate counsel
Tom Johnson reports for NJ Spotlight:
New Jersey State Senator Bob Smith
Sen. Bob Smith called it greener than Ireland – a bill that aims to bolster a thriving solar sector, enhance state efforts to cut energy use, and promote carbon-free electricity that powers more than 40 percent of New Jersey homes and businesses.
But the legislation (S-877) also may be one of the costliest measures taken up by lawmakers, a bill that when the tallying is done 15 years from now could end up costing utility customers more than $4 billion, according to an economic analysis for the New Jersey Division of Rate Counsel.
“It’s a huge cost and whatever we spend here, it means we are going to have less to spend on other things,” said Stefanie Brand, director of the division, and an opponent of the nuclear subsidy. Brand will outline the results of the economic analysis today in Trenton, where the Senate Budget Committee is scheduled to vote on the legislation.
**Editor’s Note: The bill was pulled from the Senate Budget Committee’s agenda prior to the start of today’s meeting**
Totaling up the subsidies
The analysis projects the exposure to ratepayers, offering a scenario estimating the $3.4 billion cost of the nuclear subsidy over a 10-year period, as well as the added $958 million costs ratepayers could assume by expanding subsidies for the solar sector from 2018 until 2033 under other provisions in the bill.
The $3.4 billion factors in the direct costs associated with the nuclear subsidy paid by ratepayers of all the electric utilities in the state and indirect costs associated with money customers will not have to spend because of less disposable income, according to Brand.
The nuclear subsidies are not guaranteed, but must be approved after going through a review process by the state Board of Public Utilities.
In the meantime, the debate over the bill hinges on policymakers trying to juggle and understand the vagaries of the competitive energy markets, a world New Jersey entered back in 1990 when it broke up its energy monopolies
Perhaps more than anything else, however, the controversy revolving around the bill centers on whether the three nuclear units expected to benefit from the measure are in such dire straits ratepayers may pay $300 million a year to keep them open.
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