Plan would take $300M from clean energy programs, leave door open to future raids
TRENTON - Governor Christie announced today that, as part of his 2011 budget, he will take $20 million worth of clean energy money to help plug the state’s budget deficit. This is on top of the $286 million in clean energy money that he has already taken for the 2010 budget.
“For all his talk today about creating jobs, Governor Christie is raiding a program that brings thousands of jobs and billions of dollars of investment to New Jersey. After just eight weeks in office, Governor Christie is taking over $300 million from clean energy projects in our state. That means fewer green jobs, fewer wind and solar projects, less money in people’s pockets, and more pollution for New Jersey. Given the state of our economy and environment, we can’t afford any of these setbacks,” said Matt Elliott, clean energy advocate at Environment New Jersey.
The money would come from various clean energy funds collected in the state, including the Board of Public Utility’s (BPU) share of Regional Greenhouse Gas Initiative (RGGI) funding and the Retail Margin fund collected by the BPU. BPU President Lee Solomon has said that this may not be the last raid on clean energy funds under Governor Christie. For starters, he said that $20 million will likely be taken again next year, and that, as one of the few ‘revenue-generating’ agencies in the state, other future raids of clean energy funds could be coming.
Another possibility, according to President Solomon, is that the agency could reduce rebates levels, making them less generous for solar power, energy efficiency and other renewable installations, thereby “cooling” market demand for these clean technologies. This could leave a surplus in the clean energy budget, and President Solomon indicated that any unspent funds will likely be appropriated to the general fund later in the budget year.
“New Jersey’s clean energy money is not a cash cow that exists to plug the budget deficit. Raiding it won’t solve the state’s structural budget problems,” said Elliott. “This is money that’s been invested by residents and businesses through their utilities to fund clean energy projects. Growing New Jersey’s clean energy economy is just as important as plugging budget deficits. If spent as intended, clean energy funds can help grow the economy and make the state budget healthier,” said Elliott.
New Jersey has four pots of money for clean energy, which includes both energy efficiency and renewable energy:
• The Regional Greenhouse Gas Initiative (RGGI) fund. Under RGGI, a regional cap-and-trade program that spans 10 Northeast states, power plants are required to pay for the global warming pollution they emit into the air. That money is then supposed to be spent on energy efficiency programs that reduce state-wide energy demand, help people save on utility bills, and more than offset the cost of this cap and trade program. The auction brings in an estimated $40 million a year to the state with 20% going to the BPU’s Clean Energy Program; 20% to the NJDEP for local planning, forests and wetlands restoration; and 60% to the Economic Development Authority for zero-interest loans and grants for companies and large institutions to invest in renewable energy and energy efficiency.
• The Retail Margin fund. This fund helps large businesses and institutions reduce energy demand and build state-of-the-art, on-site, efficient power generating units. The BPU collects this funding directly from electric utilities. About $15 million is collected each year.
• The Clean Energy Program funds. Every ratepayer in New Jersey – from residential utility customers to big businesses – pays into the Clean Energy Program. The money is then available to any ratepayer that wants to install solar panels, retrofit a home or business, etc. The funds collects about $269 million a year from the state’s electric and gas utility ratepayers. The money is protected by law to be used only for clean energy projects in the state, and the majority of the fund supports rebates for energy saving building retrofits and energy saving appliances.
• The federal government has also sent stimulus money to New Jersey to bolster its clean energy program and drive the market for energy efficiency and renewable energy. The governor’s earlier decision to divert clean energy funds to plug the FY10 budget has already erased this federal attempt to boost the state’s clean energy program.
Both the RGGI money and Retail Margin fund provided easier targets than the BPU’s Clean Energy funds, which belong to the state’s ratepayers. Raids on the Clean Energy fund require legislative approval under the 1999 EDECA law. Although funds from RGGI and the Retail Margin can not be reallocated for other purposes without legislative approval, these funds are part of the state revenue stream, making them easier targets. The Governor intends to replace the funds diverted from RGGI and Retail Margin with BPU Clean Energy funding. This favors the business sector, which relies heavily on Retail Margin funds, and it reduces the amount of money available to state residents, because there will be less money in the ratepayer-funded Clean Energy Program.
“This is a shell game designed to take clean energy money without consulting the Legislature,” said Elliott. “At the end of the day, it means less money available to New Jersey residents who are interested in solar or looking to retrofit their homes to reduce their energy use. We should be sending this money back to ratepayers to spend on clean energy projects that save money and protect the environment. This raid is a ‘lose-lose’ for the people of New Jersey who deserve to benefit from their investment in the Clean Energy Fund.”
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