Will going green help utility customers save some green of their own?

TOM JOHNSON, ENERGY/ENVIRONMENT WRITER | MAY 24, 2022

NJ Spotlight News

Electric heating promises to save money for utility customers.

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Customers will largely see some savings when utilities transition to green energy, according to a preliminary analysis of a much-anticipated study presented Monday by state regulators and a consultant they hired.

The state expects the study to be finished this summer, but already critics question why so many future expenses are not included in the analysis.

In its preliminary assessment, the Brattle Group suggests residential consumers by 2030 will largely reap savings, primarily by electrifying building-heating systems and switching to electric vehicles, two major components of the state’s Energy Master Plan.

During a two-and-a-half-hour webinar however, critics faulted the analysis because it failed to include certain costs in the review, such as the impacts of climate change and capital expenses associated with moving toward electrifying the transportation and building sectors.

Lowballing the future?

Other skeptics argued the report underestimates the scale of investments needed to modernize an aging electric grid to make the transition to renewable energy.

To some extent, the analysis was adjusted to reflect those latter concerns, according to Sanem Sergici, one of the authors of the study. For example, the study will change its assumptions about how much electric utilities will spend on a year-over-year basis upgrading their distribution systems from 1% to 2% , Sergici said.

But others asked why not include the capital expenses of what it will cost to replace natural-gas systems and conventional gasoline-powered vehicles with electric vehicles?

“I just wonder how meaningful the study will be without it taken in account,’’ said Paul Patterson an energy analyst for Glenrock Associates in New York, who was on the webinar call. “It is too big an element of the cost.’’

In the consultant’s analysis, the study acknowledged it only reflects the operating costs of the electrification technologies. It conceded that customers will need to pay the expenses required to adopt these technologies, likely with assistance from state-sponsored incentives. In the past, those costs have most likely been passed on to customers in the form of higher utility bills.

New targets for incentives

Some of those incentives are expected to target to low- and moderate-income communities that have, for a large part at least so far, been bypassed by benefitting from clean-energy programs.

“We have a lot of work to do in New Jersey to keep rates affordable,’’ said Abe Silverman, general counsel for the state Board of Public Utilities, who moderated the webinar.

The preliminary assessment only focused on residential electric customers of Atlantic City Electric and gas customers of South Jersey Gas, but Sergici said early assessments of other utilities were heading in a similar direction.

The midpoint study offered a few major takeaways, including the annual benefit of the state reducing greenhouse-gas emissions, a top priority for the administration. By 2030, $1.6 billion annually will be attained if New Jersey achieves the aggressive goals of its Energy Master Plan, according to the Brattle initial assessment.

Another key finding is that other current initiatives, primarily energy efficiency programs and electrifying the transportation sector, offer significant customer savings. By the end of the decade, consumers could reap savings of 17% relative to 2020 costs, according to the presentation.

To some clean-energy advocates, the analysis only confirms what they have long argued.

More affordable than fossil

“This study should put to rest the myth that we can’t afford to transition away from fossil fuels to clean energy,’’ said Tom Gilbert, co-executive director of the New Jersey Conservation Foundation. “Consumers will see lower monthly bills as a result of savings on costly fossil fuels as they switch to electric vehicles and efficient electric heat pumps.’’

Eric Miller, New Jersey Energy policy director for the Natural Resources Defense Council, agreed. “The preliminary BPU study results make it crystal clear that achieving the state’s ambitious climate goals will significantly decrease energy cost for New Jersey residents,’’ he said.

For at least one speaker, the presentation was an embarrassment to the BPU and state government.

Mike Makarsky, representing Affordable Energy, a frequent critic of the agency, noted BPU President Joseph Fiordaliso blamed COVID-19 for shelving a previous study on cost impacts because it did not account for the pandemic’s impact. The latest study does not mention COVID at all, he said.

“We don’t get to (do) another study because the board did not like it the first time,’’ he said. The first study has never been released and the organization was denied a request to make it public under an Open Public Records Act request, he said.

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published this page in News and Politics 2022-05-24 03:27:05 -0700