The bill, aimed at promoting the use of renewable natural gas, won unanimous approval in a legislative committee, with critics warning that the move could increase already high energy bills.
The legislation (A-577) is being touted by supporters as a way to diversify the state’s energy supply as it seeks to electrify buildings and homes around New Jersey, a cornerstone of the Murphy administration’s goal of decarbonizing the economy.
But opponents told the Assembly’s Telecommunications and Utilities Committee on Monday that the bill could force ratepayers to pay billions of dollars in unnecessary investments to upgrade pipelines and other infrastructure to handle renewable natural gas and hydrogen, which the legislation also encourages.
With bipartisan support, the legislation could become the next big debate over how to realize the state’s goal of transitioning to a nearly 100% clean energy economy by 2050. It received strong support from most of the state’s largest business organizations in a one-hour hearing, but against environmentalists as well as New Jersey Appraisal Division Director Brian Lippman.
The debate, in particular, revolves around how quickly to phase out New Jersey’s use of natural gas, which now heats more than three-quarters of the state’s homes. It also reflects the reluctance of many consumers to quickly move away from natural gas, which until recently was relatively cheap compared to other alternatives.
A question of cost
In a letter to the committee, Lipman raised several concerns, particularly its financial impact on all ratepayers at a time when energy costs and rates continue to rise. He noted that the state’s Energy Master Plan projects that the cost of replacing natural gas supplies to buildings with renewable natural gas will be about $1.1 billion a year by 2050, far more than the cost of retrofitting buildings with electric heat pumps.
“This bill also circumvents ratepayer protections because it usurps the (state) Public Utilities Board’s authority to regulate rates. Moreover, the benefit and safety of renewable natural gas to society is questionable,” Lippman wrote. His letter dated Dec. 2, was not mentioned by Assemblyman Wayne DeAngelo (D-Mercer), the committee’s chairman.
‘Tits a win-win option. We allow innovation to happen in the state.” — Christopher Emigholtz, New Jersey Association of Business and Industry
The legislation allows utilities to invest in renewable natural gas infrastructure and recover those costs from customers, which supporters say is necessary to develop innovative new energy sources.
Some utilities, including New Jersey Natural Gas and South Jersey Gas, are already investing in the development of commercially feasible technologies using renewable natural gas and hydrogen.
For and against
According to Michael Eggenton, executive vice president of the New Jersey State Chamber of Commerce, renewable natural gas helps decarbonize the economy and helps fight climate change. “We need a diverse set of solutions,” he said.
“It’s a win-win,” agreed Christopher Emigholz of the New Jersey Association of Business and Industry. “We’re allowing innovation to happen in the state.”
‘This bill would perpetuate and inflate the use of dirty gas in New Jersey and lead to more dirty gas infrastructure.’ — Matt Smith, Food and Water Watch
But opponents dispute whether renewable natural gas will help reduce carbon pollution, saying it includes methane, the most potent greenhouse gas. The construction sector is the second largest source of carbon pollution in the state after transportation.
“This bill will perpetuate and inflate the use of dirty gas in New Jersey and lead to more dirty gas infrastructure,” said Matt Smith, state director of Food and Water Watch.
But Assemblyman Joseph Egan (D-Middlesex) questioned whether New Jersey has enough generating capacity to electrify the transportation and construction sectors, as the state’s energy master plan calls for.
