N.J. needs to tackle energy costs, now more than ever

In light of the COVID-19 pandemic, it may seem as if other important issues have faded from the public eye. In reality, the pandemic means that we must redouble our focus on the day-to-day issues facing New Jersey’s residents, or else face skyrocketing costs at a time when we can least afford them.

As the COVID-19 pandemic forces governments at all levels to contend with revenue shortfalls, it is more important than ever to invest in a diverse, balanced and affordable energy portfolio that will keep costs low for those who live and work in New Jersey.

According to a newly-released whitepaper from Affordable Energy for New Jersey, New Jersey faces a “cost chasm” in the energy sector — one that threatens to increase costs for businesses and residents and could leave us with a fragile, less reliable grid. Fortunately, there is a path to affordable, clean and stable energy systems in our state, and we have the tools to get there.

Since March, the COVID-19 pandemic has touched every New Jersey resident and forced the state to reckon with significant economic impacts, including a potential budget shortfall of nearly $5 billion this fiscal year alone. Yet, the vast majority of state energy policy, including the draft Energy Master Plan, fails to account for this new reality. Gov. Phil Murphy’s administration must take concrete steps to improve energy security in New Jersey, including:

  • Reevaluate policy in light of COVID-19: Several major policy initiatives, including the Energy Master Plan, have not been reevaluated in light of the COVID-19 pandemic. We must take a close look at the costs and funding sources for key energy policies, and ensure that we pursue only those that will not saddle taxpayers or businesses with higher prices.
  • Pursue a total-cost approach: Too often, back-of-the-envelope math overstates the viability of new technologies like wind, solar and battery storage, and neglects the cost advantages of clean natural gas. New Jersey must assess total costs — including transmission infrastructure, retrofitting, and other necessary grid improvements — when evaluating our energy sources.
  • Invest in natural gas supply lines: For too long, the state has curtailed the development of sensible pipeline projects to fix our supply crisis — like the PennEast Pipeline — despite many passing strict environmental review. The state must recognize that these projects have numerous benefits and improve reliability while creating jobs.

The Energy Master Plan, for example, recommends transitioning to all-electric heating via heat pump conversion, despite 75% of New Jersey’s homes relying on inexpensive natural gas heat. According to data from the state of Massachusetts, the average cost of converting to an electric heat pump system is over $20,000 per home — an immense burden on our residents that is simply unrealistic for most as they already face the economic devastation of the pandemic.

As businesses remain shuttered and residents grapple with having less money in their pockets, the Murphy administration has not changed its energy strategy at all to account for these changes or the full costs of converting to electric heating.

Similarly, supply constraints for existing natural gas infrastructure continue to threaten the long-term viability of our energy grid. Based on supply forecasts, by 2021 New Jersey Natural Gas may not have access to a sufficient supply of natural gas to serve its customers. These kinds of disruptions raise costs for all significantly — yet, the administration continues to delay or reject pipeline projects that would ensure a steady supply of gas while creating thousands of jobs, and has not reconsidered this strategy.

There is a solution at hand that would help keep costs low, preserve reliability and ensure our residents and businesses can afford heat and energy even during these trying times. New Jersey needs to incorporate clean natural gas into its energy mix and maintain a diversified energy portfolio to reduce costs for all.

Ron Morano is the executive director of Affordable Energy for New Jersey.