N.J.’s Energy Master Plan: Noble idea, disastrous economic impact

Gov. Phil Murphy’s administration has launched a sweeping effort called the “Energy Master Plan” to restructure New Jersey’s entire energy infrastructure and economy on an aggressive timetable to eliminate the state’s overall carbon emissions by 2050. The goal may be noble, but serious questions have been raised about the administration’s rush to implement the plan.

Not only will the EMP require scaling up new technologies (some of which have yet to be proven), the cost impacts on businesses, families and local governments will be significant. Moreover, the EMP’s massive subsidies and mandates will place the burden of those costs most heavily on the economically disadvantaged, while showering the most benefits on the wealthy. Ironically, the EMP’s climate benefits will be negligible: Even if New Jersey reduced its carbon emissions to zero tomorrow, it would have no measurable impact on world climate.

One thing the Murphy administration has been silent on is the EMP’s cost. When originally drafted, the Energy Master Plan was to include a cost analysis along with the document we know today. This was eliminated with no explanation or justification.

With the administration failing to be transparent, Affordable Energy for New Jersey worked with energy policy expert Dr. Jonathan Lesser of Continental Economics to calculate what New Jersey residents should expect to pay for the Energy Master Plan, looking at each of the Energy Master Plan’s seven broad strategies and assessing costs. The reality that New Jerseyans will have to face is daunting:

AENJ calculated the total plan cost, as well a cost per resident. This cost per resident was derived by taking the total cost and dividing by the total New Jersey population — meaning the per resident does not take age, race, gender or socioeconomic status into account. The Energy Master Plan does not discriminate.

While performing this analysis, AENJ found that each EMP strategy involves significant costs for New Jersey residents.

EMP Strategy New Jersey Reality   Estimated Cost
#1 Reduce energy consumption and emissions in the transportation sector. Meeting the electric vehicle mandate will cost much more than assumed. $176 billion
#2 Accelerate deployment of renewable energy and distributed energy resources. Electric bills will skyrocket. $155 billion
#3 Maximize energy efficiency and conservation, and reduce peak demand. Energy efficiency and conservation mandates will reduce energy consumption less than claimed, and cost much more. $106 billion
#4 Reduce energy consumption and emissions from the building sector. Electrifying New Jersey homes, apartments and businesses will be hugely expensive. $65 billion
#5 Decarbonize and modernize New Jersey’s energy system Decarbonizing and modernizing New Jersey’s energy system will require customers to pay more for electricity when they most need it. $12.5 billion
#6 Support community energy planning and action, with an emphasis on encouraging and supporting participation by low- and moderate-income and environmental justice communities. Community energy plans and a smorgasbord of community subsidies. $1.5 billion
#7 Expand the clean energy innovation economy. Subsidies for the few. $9 billion
Total Estimated Cost            $525 billion

Click here to download the full white paper, which analyzes each of the EMP strategies in further detail.

New Jersey must adapt to climate change. But the cost of these adaptations must be part of a transparent public discussion, so we aren’t forced to rely on technologies or adhere to policies that are neither feasible, affordable nor reliable. We call on state and local leaders, the press and everyone to participate in this discussion.