EDISON, NJ - The long-awaited New Jersey Energy Master Plan will likely be issued within “the next month or so,” but might be slightly different from just a month ago, said the state’s Board of Public Utilities president, Lee A. Solomon, at NAIOP NJ’s seminar on “Renewable Energy, Part II: Solar and Energy-Efficient Systems for Office and Industrial Buildings, held today at the Sheraton Edison Hotel.
One factor for the delay is the controversial Long-Term Capacity Agreement Pilot Program signed into law by Gov. Chris Christie in February, he said. The program encourages the development of new electric generation facilities in the state and establishes minimum capacity prices for payments to eligible generators. Some have questioned the program’s impact on renewable energy projects and capacity pricing incentives. “We didn’t think it was prudent to introduce this expensive a plan without the statistics of LCAPP,” Solomon says. “It is voluminous, intricate, involved, and will have to be assimilated into the master plan for it to be completed.”
Nuclear power, once considered an important element, is now being rethought in light of the crisis the Fukushima Daiichi power plant, which today was ranked as a level seven situation, the top of the scale. According to Solomon, 30% of New Jersey’s energy comes from nuclear power, the only non-carbon source of energy. “We cannot meet carbon reduction targets without nuclear,” he said. “But that requires deep consideration in light of what has happened in Japan. Those factors have put us behind.”
The Garden State has some of the highest energy rates in the nation, Solomon notes, a real competitive disadvantage given that energy is the second highest expenditure for any business in the state, after labor. “Frankly, states like Pennsylvania and West Virginia have been eating our lunch,” Solomon said. Unfortunately, he observed, the state’s density helps keep prices high.
In fact, tracking energy prices in New Jersey from 2001 through 2011 “looks like Mr. Toad’s Wild Ride,” with 2008 prices soaring to 170% of 2001 rates, then dipping to 145% of the baseline during the recession. Currently, prices are 150% over 2001 levels, said Jeffrey Grant, senior director of corporate energy for Edison, NJ-based Mack-Cali.
“That’s a 7% annual increase in rates, far higher than inflation.”
In the near term, “you’ll see nuclear coming off line,” said Fred Fastiggi, SVP of Birdsall Services Group in Wall Township, NJ. “Some of that will be replaced by wind or solar. A month ago, I might not have said this, but I don’t think we’ll see more nuclear in New Jersey in the short term.”
Aiding the development of solar power in New Jersey is the SREC program, which helps subsidize the growth of solar energy in the state, but vast arrays of solar fields may not always be the best use of land, Solomon notes. “It’s counterintuitive if you’re using valuable open space farm land for solar panels which essential take them off the map,” he says. “No state has as much brownfield as we do. With the rich incentives SRECs are providing, we are at risk of giving up a s mall but valuable resource in our state.”
SREC values likely will decline as supply catches up with demand, Fastiggi warned, andd the basic business principles ultimately will decide what energy alternatives are used around the state, Solomon said. “We’re trying not to pick winners or losers in the energy field. We’re trying to let the market decide that.”
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