New Jersey set to approve fund for alternative energy projects

The Star-Ledger

NEWARK, N.J., Oct. 11, 2000 (Knight Ridder/Tribune) —The state is expected to approve today an interim $10 million program to finance environmentally friendly technologies like solar and wind power and projects to conserve energy.

The decision comes after eight months of behind-the-scene jockeying between the state’s six electric and gas utilities and renewable energy advocates over the creation of the fund. That dispute has delayed the start of energy-saving alternatives at the same time that fuel costs have soared, critics said.

The deadlock has frustrated advocates of cleaner energy technologies, like solar and wind power, who say New Jersey is losing out on investment opportunities because the state has failed to commit funds to boost their efforts.

“In Pennsylvania, where we are breaking ground on our second wind farm, we have wind power,” said John Holtz, regional marketing manager for Green Mountain Energy, an Austin, Texas-based supplier. “In New Jersey, all we have is hot air.”

When the state decided to break up gas and electric monopolies 18 months ago, lawmakers left it up to the state Board of Public Utilities to decide the details of the program, which could amount to $128 million a year. The new fund would be financed by special charges now collected from ratepayers, which amount to between $2 and $4 a month on a residential bill.

A bitter battle over who will control the fund — the utilities or an independent administrator — has left both sides at an impasse.

There’s also fear by some state officials that the program could lead to rate increases.

Green Mountain’s Holtz, meanwhile, said he has two or three projects planned for New Jersey if the state commits financial assistance.

The failure to resolve the issue also frustrates advocates of energy efficiency projects.

“Here we are in a situation with oil prices increasing by nearly 50 percent, natural gas prices about to rise by from 16 to 40 percent and electricity prices at times of peak demand increasing by 1,000 percent,” said William Potter, a lawyer who represents energy service companies. “Meanwhile, we have no action on a program that could save consumers hundreds of millions of dollars.”

Herbert Tate, president of the BPU, said the state is putting money on the table to see how these programs work on a short-term basis. He declined to say how large the interim fund would amount to, but people familiar with staff discussions said $10 million is being targeted.

To Dolores Phillips, the government relations manager for Energy Photovoltaics, a Mercer County business involved in solar energy, said that level of funding is “grossly insufficient.” Her organization and others had pressed for an interim fund in the range of $60 million.

The electric and gas utilities have decided to begin planning as if their more modest renewable energy and energy efficiency program will be approved by the state — a decision that has angered Phillips and others.

“The utilities feel they have this all locked up,” Phillips said, referring to the competing proposals before the BPU. Under the utility proposal, the money would continue to be controlled by the electric and gas companies and there would be less spending on such projects in the first few years.

“I guess it’s called hubris,” agreed Lynn Sutcliffe, president of Onsite Sycom, an energy services company based in Somerset. “It makes a travesty of the process.”

Utility executives defended the decision to begin planning for the new program, saying it will allow them to hit the ground running once the board approves a spending proposal.

“We’re trying to put meat on the bones of what was filed,” said Chris Siebens, manager of regulatory programs for GPU Energy.

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© 2000, The Star-Ledger, Newark, N.J. Distributed by Knight Ridder/Tribune Business News.