In a huge victory for a large coalition that included businesses, unions, builders and numerous associations, a provision that would require all new boilers to be electric beginning in 2025 — a provision that would cost multibillions of dollars to implement — was removed from the New Jersey Department of Environmental Protection’s PACT Rules that are part of the implementation of the first phase of the state’s Energy Master Plan.
The potential provision, which was introduced in December 2021, was immediately challenged by numerous groups, which said they did not oppose the idea of clean energy but said this particular provision would bring enormous costs. The transition to a single electric boiler could be as much as $2 million.
These costs, opponents of the provision said, ultimately would be passed on to renters (in the form of increased rents in multifamily buildings), taxpayers (who ultimately would pay for the upgrades needed in thousands of schools across the state) and consumers (as it would increase the cost of products in almost every sector, from restaurants to manufacturing facilities).
In September, a diverse coalition of 32 business and labor organizations sent a letter to state Senate President Nick Scutari (D-Clark) and Assembly Speaker Craig Coughlin (D-Woodbridge), calling on the Legislature to halt the building-electrification mandate until a full analysis of costs can be developed. (See full list of coalition at bottom of story.)
The group said there are approximately 1,500 apartment buildings, 1,500 K-12 public schools, 1,200 commercial, industrial and manufacturing facilities, 195 county government buildings and 143 auto body shops, in addition to religious facilities and other buildings, that would be impacted by the boiler regulation.
On Thursday, Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey and one of the key leaders in the coalition and the yearlong effort to get the provision dropped, said he was thrilled by the development — but he warned concerns over the governor’s Energy Master Plan remain.
“After an outcry from businesses, nonprofits and unions, we were heartened to see NJDEP remove from recent regulations the costly boiler electrification requirement, which would have cost school districts, municipalities and businesses $2 million for each boiler,” he said. “However, our concerns still remain that the governor’s Energy Master Plan ultimately mandates all commercial buildings and residential homes be converted to electric, despite the astronomical price tag and the strain on our already fragile electric grid.”
DeGesero reiterated his support for clean energy but said he felt it could be achieved in other manners.
“While we all support the goal of clean energy, New Jersey businesses and families deserve policies that incentivize and support a clean energy transition, rather than mandate only one energy source,” he said.
Opponents of the boiler provision have said its implementation alone would come with a $17 billion price tag. They have questioned the cost of other elements of the plan, including the electrification of homes — something they have said could cost as much as $20,000 per unit.
Vincent Grassi, a spokesperson for the DEP, said late Friday that the department will revisit the idea.
“DEP will continue to stakeholder the boiler issue as part of our second round of PACT Climate Pollutant Reduction initiatives to ensure that the eventual regulation of boilers achieves a reduction in greenhouse gas emissions at a reasonable cost,” he said.
Ray Cantor, the deputy chief government affairs officer at the New Jersey Business & Industry Association, also applauded the move in a statement Friday morning.
“In addition to the millions of additional dollars this provision would have cost these establishments, the fact of the matter is converting a modern, fuel-efficient natural gas boiler to an electric one would actually increase carbon emissions due to the carbon footprint of the PJM grid,” he said.
“NJBIA maintains our concerns about the costs and feasibility of an all-electrification policy that continues to be a mandate of the (Gov. Phil) Murphy administration. Clean energy cannot realistically be a single-source proposition.”
DeGesero, in his statement Thursday, said he hoped the Legislature would take action on the issue, pointing to a bill (S2671/A3935), sponsored by state Sen. Vin Gopal (D-Ocean Twp.) and Assemblyman Paul Moriarty (D-Turnersville).
“(It) requires a thorough review of the cost and efficacy of an electrification-only policy and legislative authorization before it is mandated,” DeGesero said.
Cantor also expressed hope the bill would be considered.
In the letter to Scutari and Coughlin in September, the coalition said:
“Compliance with this regulation will lead to significant increases in rents, property taxes and grocery bills, at a time when the Legislature is focused on reducing these costs.”
It went on to say:
“We respectfully request that both the Senate and Assembly engage in the building-electrification policy by consideration of these bills or through alternative means.”
The letter was signed by the following organizations:
- Air Conditioning Contractors of New Jersey
- Alliance of Auto Service Providers – N.J. (auto body shops)
- Associated Builders and Contractors – N.J.
- Chamber of Commerce Southern New Jersey
- Chemistry Council of New Jersey
- Commerce and Industry Association of New Jersey
- Engineers Labor-Employer Cooperative (ELEC 825)
- Fuel Merchants Association of New Jersey
- International Brotherhood of Boilermakers Local 28
- International Union of Operating Engineers Local 825
- Meadowlands Chamber
- Mid-Atlantic Hearth, Patio and Barbecue Association
- NAIOP – N.J.
- National Federation of Independent Businesses – N.J.
- New Jersey Apartment Association
- New Jersey Builders Association
- New Jersey Business & Industry Association
- New Jersey Chamber of Commerce
- New Jersey Concrete and Aggregate Association
- New Jersey Jewish Business Alliance
- New Jersey Pipe Trades Local 9
- New Jersey Pipe Trades Local 24
- New Jersey Pipe Trades Local 274
- New Jersey Pipe Trades Local 322
- New Jersey Pipe Trades Local 475
- New Jersey Pipe Trades Local 692
- New Jersey Pipe Trades Local 696
- New Jersey Pipe Trades Local 855
- New Jersey Restaurant & Hospitality Association
- New Jersey State League of Master Plumbers
- Plumbing Heating Cooling Contractors – N.J.
- Utility & Transportation Contractors Association – N.J.
