M E M O R A N D U M

TO:                      New Jersey Board of Public Utilities

FROM:                Christina M. Renna, President & CEO, CCSNJ 

RE:                       Stakeholder Meeting on Ratepayer Impact Study on Energy Master Plan

DATE:                  April 8, 2022

The Chamber of Commerce Southern New Jersey (CCSNJ) is the region’s largest and most influential business organization representing businesses in the seven most southern counties of New Jersey, as well as greater Philadelphia and northern Delaware.  The CCSNJ has more than 1,100 member companies, approximately 85 percent of which are small businesses that employ less than 50 people, as well as approximately 130 nonprofit members. The CCSNJ is proud to have a diverse membership base with several member companies in both wind and solar energy production, as well as many of the traditional utilities and nuclear energy providers in the state. Thank you for the opportunity to comment on the Ratepayer Impact Study on the Energy Master Plan (“EMP”).

Following the release of the draft of the Energy Master Plan, the CCSNJ expressed concerns that the cost to the state’s economy was not discussed in the draft EMP. The CCSNJ requested that prior to the adoption, an economic analysis by an independent outside organization should be performed to fully understand what the costs and impacts will be. To date, it is still not clear what the total cost of implementing the EMP will be.

While the CCSNJ appreciates that the Ratepayer Impact Study will examine the impact of the EMP on customers’ energy bills, it falls short of providing the business community with a comprehensive assessment of costs associated with implementing the EMP. In fact, it is noted that the Study does not expect to evaluate taxpayer-funded programs, private consumer costs of purchasing electric vehicles (EVs), private companies’, or public transport costs. Energy costs impact competitiveness and are a key factor in a business’s location and profitability. The costs associated with the EMP are real expenses that the business community will have to incur while implementing the goals of the EMP and should be thoroughly examined.

It is stated that the EMP Ratepayer Impact Study is intended to provide guidance on the real-world costs and benefits associated with meeting New Jersey’s clean energy targets. To understand the real-world costs associated with the EMP, a full analysis of all the capital costs must be included in the Study. The business community has undertaken great expense and uncertainty in the last two years due to the pandemic. If the state does not give the business community a clear picture of the cost of implementation, many will see that uncertainty as a negative for choosing to do business in New Jersey.

For example, the first strategy of the EMP calls for Reducing Energy Consumption and Emissions from the Transportation Sector. The Impact Study must look at the full scope of the cost of the consumer to switch to EVs, not just the rate impact of shifts in energy burden from gasoline toward electricity consumption due to EV adoption. This is particularly relevant given rising prices in EVs due to supply change issues created by the pandemic and exacerbated by war in Ukraine.

The capital cost of the EMP’s fourth strategy, which calls for Reducing Energy Consumption and Emissions from the Building Sector, must also be examined in this Study. The cost of switching from natural gas furnaces to electric heat pumps is more than just the change in the ratepayer’s monthly bill. The initial cost of switching is estimated to be thousands of dollars and is a real-world cost that the ratepayers will face. It is important for consumers to have all the necessary cost information so they can make the best and most informed decision for themselves and their family. As many businesses are operating on slim margins recovering from the pandemic, it is imperative they have as much certainty as possible in what expenses can be expected due to the EMP’s implementation.

Additionally, regarding the EMP’s goal of Accelerating Deployment of Renewable Energy and Distributed Energy Resources, the CCSNJ is particularly concerned about South Jersey’s ability to meet the needed capacity goals. According to a recent study by the ZERO Lab at Princeton University, electricity demand could increase significantly, up to 85 percent during peak demand. The cost of modernizing the grid to ensure reliable delivery of the increased demand is a cost that needs to be calculated within the Impact Study, as it is also a cost that ratepayers will have to bear.

The CCSNJ supports the goal of the EMP to move the state forward on its path to a clean energy future, however transparency in cost is essential to ensuring the success of the implantation of that plan.