Misperception. Misinterpretation. Misinformation.
Or, perhaps, just a missed opportunity.
That’s the sense you get from Kate Klinger, the director of the Governor’s Office of Climate Action and the Green Economy, when she describes both the announcement last week by the New Jersey Board of Public Utilities regarding its latest energy efficiency program (the one that mentioned decarbonization of buildings) — and the reaction by so many who viewed it as a mandate that the state was eliminating all natural gas appliances and heating mechanisms.
The key word Klinger wishes were used in all of the discussion: voluntary.
“It’s not a regulation — it’s an incentive-only voluntary program that people can take advantage of,” she said. “Having said that, if you’re building a big multifamily building in New Jersey right now, check out the opportunity to get 30% back in tax incentives if you do energy efficiency and cleaner and greener solutions.
“I think there’s only upside at this point for folks who choose to take advantage of this.”
Klinger said she’s comfortable debunking any talk of the state coming for your gas stove or gas heater … or the grid not being able to handle the push for decarbonization/electrification … or the BPU not have the legal authority to announce the program.
“Not only are we comfortable; we’re excited,” she said “This is a big opportunity for more choice for New Jersey customers. And we hope the utilities pick it up, which we think they will, and we hope people take advantage of it.”
Klinger also felt comfortable calling out those who she feels are intentionally misrepresenting the issue. She thinks that has been the reason there has been so much confusion. And she admits the state may not have done as good a job on its messaging as it could have.
“I think there is a mix of people who are engaging in good faith, where we just have not gotten the message across effectively to those folks, and I think (there) is intentional misinformation by folks who don’t want to see these kinds of programs established, and don’t want to see people have the opportunity to take advantage of that,” she said.
“There are a lot of reasons why folks may want to make the switch right now. And that could be a little bit daunting to folks who don’t want to see us move away from fossil fuels for space, water and heating and cooling in buildings.”
All of this led her office to reach out to ROI-NJ in an effort to bring clarity to the issue — to really talk through the substance of what the proposal is and how it fits in with the broader agenda, as she put it.
So, here goes.
The following is a large part of a 30-minute give-and-take Klinger had with ROI-NJ last week. Her remarks, in some instances, were edited down for brevity and clarity.
ROI-NJ: We’ll let you start. How would describe what happened when the BPU approved the framework for plans utilities will submit to the BPU to implement the second three-year cycle of the state’s energy efficiency programs. (They would be implemented on July 1, 2024.)
BPU described it this way: ‘The new framework focuses on goals, targets, a performance incentive mechanism and energy savings carryover; building decarbonization startup programs; and demand response programs. Through the incentives that will be offered by the utilities under this framework, the board seeks to maximize energy efficiency and energy conservation in buildings while also reducing emissions from the building sector, in line with the state’s new clean energy and electrification goals.’
Kate Klinger: (Here’s) a little bit about the substance of what this proposal is and what it’s not. The BPU is building on very successful utility-run energy efficiency programs that, over the last three years or so, have saved New Jersey residents millions of dollars in energy costs, avoided hundreds of millions of metric tons of emissions, including carbon emissions, but also nitrous oxide and sulfur dioxide and other kinds of emissions that are local pollutants — and saved a lot of energy.
And, so, in looking to the future of these programs, there’s this successful model that’s already working — that’s trusted, that’s well-used by people in the state — and there’s this opportunity for folks who make a choice to adopt cleaner and greener home heating solutions to access a lot of federal tax incentives and rebates to do so.
People need to understand: What does that look like for them — from a cost perspective, from an energy use perspective? Do the systems work? How different is it from the system they have now?
There’s a lot of misinformation — it’s a very confusing information environment out there. So, part of the intent of including these voluntary building decarbonization programs in the request for programs designed for the utilities that BPU put out, is to give people a way to get information — if they choose to make the switch and access those rebates — through a system that’s already working, through a set of vendors that’s already trusted.
ROI: The governor has said the state is not coming for your stove. We’ll grant that such is the case. But it’s only one part of the concern. The building community believes the state is headed toward mandatory electrification of all new buildings. At one point do developers lose the ability to use natural gas in their new buildings?
KK: At no point right now do they lose the ability in a building to put in a new gas unit. In fact, in the state of New Jersey, the utilities are still subsidized and able to rate-base new natural gas infrastructure to new development.
I think this idea that we’re coming for your stoves, and we’re making this huge change, and we’re flipping a switch, and suddenly, there’s going to be no new gas, is a bit overblown — considering that 80% of the housing in New Jersey is still using natural gas, and the utilities are still able to build new natural gas infrastructure with relative freedom.
I think we need to have this in terms of where folks want to make the choice. They have the ability to do so through a mechanism that the BPU has set up. And we should be interested in giving people the ability to make the choice they want to make. Lots of people are making the switch for health reasons, for climate reasons, for cost reasons. We’re just simply setting up a mechanism for them to do that.
ROI: Among many objections to this idea of decarbonization (which will lead to increased electrification) is that the grid could not handle the increase in need. Thoughts on that?
KK: I think (there are) a couple of really important things to say here. As you can clearly see, this is not a switch that will be flipped. There is no world in which everyone goes electric in the next two, five, even 10 years. What we have done, and what is ongoing as we speak, is that there’s a number of entities, including PJM, the regional energy grid, that are looking at their analysis of capacity requirements in the grid as we implement New Jersey’s clean energy policies and planning.
And I can tell you that I talked to (Public Service Electric & Gas President Kim Hanemann) about this recently. PS is looking 10, 15 years out to plan for: How do they make those improvements and capacity increases to the electrical grid to ensure that people who are switching to these electric technologies will have the kind of reliability and access to affordable energy that they will need?
So, the planning is in process, and lots of folks who are much smarter than I at this understand the parameters of what the need will look like, and are planning to help us to get there. Our utilities in the state are on board. They are partners with us in achieving this clean energy future that we’re all striving toward together. And they are doing the work that we need them to do in order to plan for grid modernization.
ROI: What else?
KK: The BPU has opened up a proceeding to work closely with the utilities to look at load management and capacity growth over time. I think one thing that gets overlooked in what the BPU just released is that there’s lots of technologies that we can implement today to actually relieve some of that pressure on the grid as more people adopt electric technology. (The BPU is) having the utilities design programs to utilize smart technology and other innovative ways — battery storage, other things — to relieve pressure on the grid from increased electric utilization as a result of electrification.
So, we’re thinking through all of these things, both immediate short-term solutions and longer-term solutions, as to: What do we need to do to get the grid where it needs to be?
ROI: Another objection to all of this is a legal one: Does the BPU have the ability to make such a proposal? Shouldn’t that come from the Legislature?
On this question, Elspeth Hans, senior counsel in the Governor’s Office who handles the energy and environment portfolio, jumped into the conversation.
Elspeth Hans: I’ll just say that we are confident in the BPU’s legal authority for the proposals they put out — and we would refer you to the board order for more detail. And, beyond that, I don’t think we can really go on record addressing in advance a legal challenge that has not been filed.
ROI: Speaking of the future, let’s talk about all the ideas around clean energy — new technologies that still are being thought through. We don’t know yet, but some may have great potential. How is the state preparing for them?
KK: What’s really important for us to do as policymakers in the state is to ensure that the policies that we’re designing are leaving room for all of these innovations — for new technologies to come on the market, for costs to come down, for lots of development to take place, both in the state and nationally.
A good example of that: We’re part of a seven-state collaborative that has submitted a proposal to the Department of Energy for a seven-state clean hydrogen hub. So, we’re really involved in looking at the opportunities and how those things fit into the climate planning that we’ve done in New Jersey — to understand how we could employ those technologies in different sectors of the economy as we move to a clean energy economy.
ROI: I’m going to put you on the spot: Are there any technologies that have particularly caught your eye?
KK: One of the things that I think is really interesting is the report the hydrogen fuel cell task force just put out. It looked at all of the potential for hydrogen fuel cell usage in the state. There’s lots of local pollution reduction benefits to that technology.
If we could replace drayage trucks at the ports with zero-emission hydrogen fuel cell vehicles, they could run all the time and they would be relatively easy and quick to charge. That could really be a solution for getting the ports to comply with some of the regulatory structures around decarbonization that was put into place — and also just making those the air quality in those neighborhoods a lot better. So, we’re excited about hydrogen fuel cells for transportation, for battery storage, for responding to peaks in demand in energy and applications like that.
ROI: Whenever people feel the state is moving away from natural gas, they point to the thousands of miles of pipelines already in the ground — suggesting they could be used for new technologies, including green hydrogen. Your thoughts?
KK: (In regard to) hydrogen combustion for building heating, there’s still a lot of open questions around cost, around health implications and emissions, particularly for blended natural gas and hydrogen. So, we don’t have a firm policy position on that. But there is a fair amount of development around that happening in the state.
I think, right now, we are viewing clean hydrogen as something that may ramp up over the next several years to be a little bit of a niche solution to decarbonize difficult sectors of the economy.
ROI: Last question. You like to use the word ‘voluntary’ when describing the program. Here’s another word: possibilities. When it comes to decarbonization, there seems to be a lot of potential options. We’ll give you the last word.
KK: A lot of this is in the research & development phase. So, there is lots to learn, lots to be discovered. But ultimately, it’s affordability, it’s reliability, it’s human health and it’s emission. Those are the four things that we’re really looking at when we look at what is the right energy mix for New Jersey customers.
