New Jersey energy regulator punts vote on building electrification plan

Board of Public Utilities wants more time to review public comments, president says

By: - July 12, 2023 4:27 pm

Critics have warned that the proposed costs of the state’s decarbonization efforts and charging the executive branch was overreaching its authority in seeking to impose the new regulations. (Getty Images)

State energy regulators delayed a vote on a proposal for new building electrification rules Wednesday, citing a desire to address an outpouring of public comments they received in late June and earlier this month.

The Board of Public Utilities was set to weigh proposals that called for electric or hybrid systems to replace gas or oil-burning furnaces and other appliances, including stoves and dryers, alongside energy efficiency measures meant to bring down the demand and cost of electricity. The proposals would apply to residential and commercial properties.

The board received scores of public comments over the plans in late June, with many warning about the proposed costs of the state’s decarbonization efforts and charging the executive branch is overreaching its authority in seeking to impose the new regulations.

“We want to make sure that we include every aspect of input that we’ve received before we have the final order issued, so it will be taken up at a later board meeting,” said the board’s president, Joseph Fiordaliso.

It’s not clear when the board will return to the proposal, though they could do so later this month. A board spokesperson did not return a request for comment.

The New Jersey Division of Rate Counsel, which argues on behalf of utility customers, has warned that the electrification proposal could force landlords to raise rents to account for the cost of installing new electric appliances.

It also warned that other utility customers could end up paying for additional costs, including those related to upgrading the state’s electrical grid. The board has not completed a study measuring the impact the changes would have on ratepayers, the rate counsel noted.

“All parties can agree that energy efficiency, or most endeavors for that matter, could be more successful if there was an unlimited access to funds for that purpose. Ratepayers are not an unlimited funding source,” the division said in public comments to the board.

The proposal would have set energy goals through June 2027 and is meant in part to meet clean energy and building electrification goals Gov. Phil Murphy set in a February executive order. The proposal would have updated the state’s energy master plan, Murphy’s roadmap to cutting emissions by 80% over the next 27 years.

That order calls for the state to draw 100% of its electricity from renewable sources by 2035 and to install non-carbon-emitting heating and cooling systems in 400,000 residential buildings and 20,000 commercial buildings by 2030.

Some groups allege Murphy overstepped his authority in setting those goals through executive powers, noting bills that would require the Board of Public Utilities to create a nearly identical building electrification program have not advanced in the Legislature.

“I know from watching TV when I was seven years old that the way our system of government works is the Legislature passes a law, and after the Legislature passes it, the governor signs it, and then enforces it,” said Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey. “The governor missed the Legislature-passing-it part of this law.”

The Division of Rate Counsel concurred in public comments, saying New Jersey statutes give the Department of Environmental Protection, not the Board of Public Utilities, the oversight of carbon emissions. 

The board also received comments from more than 30 residents who overwhelmingly back the electrification program, including from some who called for an immediate moratorium on new fossil fuel investments and a more rapid end to state energy subsidies for them.

“The NJBPU needs to immediately start phasing out all subsidies for fossil fuel appliances. Reductions of these subsidies must take place right now, by at least 40%, and then an additional 20% or more per year,” said Rebecca Canright, a farmhand in Bethlehem Township.

The fight over the administration’s building electrification proposals has been waging for more than two years, with cost a common rejoinder from fossil fuel groups and others.

The Department of Environmental Protection in December withdrew a proposal to bar the installation of non-electric boilers in most commercial and government buildings beginning in 2025 over cost concerns.

Sen. Bob Smith (D-Middlesex), who chairs the chamber’s environment and energy committee, said at the time that he expected New Jersey to reach electrification through subsidies, but the state faces rising costs on that front too.

The Board of Public Utilities on Wednesday declined to award the first wave of new solar energy subsidies meant to incentivize large-scale solar projects.

Each of the proposals regulators received significantly exceeds a cost cap set by the board, staff said during Wednesday’s meeting. They recommended reopening bids for a three-month period beginning in October.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Nikita Biryukov
Nikita Biryukov

Nikita Biryukov most recently covered state government and politics for the New Jersey Globe. His tenure there included revelatory stories on marijuana legalization, voting reform and Rep. Jeff Van Drew's decamp to the Republican Party. Earlier, he worked as a freelancer for The Home News Tribune and The Press of Atlantic City.