Month: August 2023

There is near-universal agreement among the state’s utility providers and construction industries that we must deal with climate change. Many of these companies and organizations are already taking steps, on their own, to deal with the issue. The New Jersey Board of Public Utilities’ (BPU) proposal to electrify buildings, however, has brought these groups together in another way: to showcase just how potentially damaging this proposal is to the people of New Jersey.

Earlier this year, Governor Murphy issued an executive order calling for 400,000 homes, 20,000 commercial buildings and 10% of all low-to-moderate income buildings to have zero-carbon-emission heating and cooling systems by 2030. Earlier this month, the BPU planned on beginning to implement these goals through a plan that would force electric utilities to begin this electrification process. Fortunately, the proposal was pulled from the agenda. But it still lurks and with it, all the issues that come with this poorly thought-out proposal.

Perhaps the biggest question is whether electrification and meeting the governor’s goals is even possible. The short answer is no. The infrastructure to meet these standards does not exist, neither in New Jersey, nor anywhere in the country. Current transmission lines went up when Mickey Mantle and Willie Mays were still playing baseball. They were built for another time and are simply not equipped to handle the influx of electric power needed under the BPU’s proposal.

Think about the extra capacity needed for our electric grid to power an additional half a million buildings. Now consider that New Jersey does not have the capacity to provide ample charging stations for the state’s electric vehicles. NJ Coalition of Automotive Retailers President Jim Appleton recently noted that his organization is attempting to upgrade three chargers at their headquarters but they’ve been told by the utility that it will “be 42 weeks before they can install the transformer needed to upgrade our service.” The recent proposal by Governor Murphy to require, by 2035, that all new cars manufactured in New Jersey be electric will not only exacerbate this problem, but it may have the unintended consequence of merely proving how unprepared we are for electrification in general.

Some might ask, “Why not just update the infrastructure?” We certainly would not object to that. In fact, it’s completely necessary. The size and scale of the upgrades necessary, however, will not be accomplished overnight. It will take years to transform the grid to meet the energy needs required under this proposal. To provide a sense of how extensive those changes would be, the U.S. Department of Energy has estimated that the cost of creating a clean electricity grid could reach over $1 trillion.

Cost, meanwhile, factors heavily into the BPU’s proposal. It has yet to be identified just how the costs of this extensive electrification will occur. In testimony submitted to the BPU, PSEG noted that even if every utility was given $10,000 per home for this effort, it would only convert 15,000 homes in three years, “leaving 385,000 homes to be converted” by 2030.

Will homeowners be left on the hook to cover those costs, and for a program they essentially had no say in? As representatives of the construction industry, we find such a scenario especially disturbing. The industry is moving toward electrification of vehicles and equipment but that pace is slow because the energy and materials needed to support electrification just do not exist in abundance. Who is to say that we are not next in the rush to electrify without considering the consequences.

This rush to electrify could have long-term consequences. Last year, California had to tell residents to conserve energy in the middle of a heat wave or face devastating rolling blackouts because their energy grid was stretched so thin. In 2021 Texas suffered heat outages during a historic winter storm. Is that what we want in New Jersey? Electric heating and air conditioning won’t make much difference if our grid system completely collapses under the weight of this proposal.

We have to deal with climate change in a smart, effective manner. This proposal, however, is essentially plugging one hole in a dam only to create three more. Rushing to electrify buildings when the capabilities to do so literally do not exist will cause substantial damage to the state and to ratepayers. The BPU should shelve this plan for good and the state must come up with a comprehensive plan on this issue that addresses costs, supplies and realistic timing.

Dave Rible is Executive Director of the Utility and Transportation Contractors Association of New Jersey.

Instead of delivering emissions reductions to mitigate the impacts of climate change, the rush towards electrification has brought bankruptcy and bailouts. Across the country, developers and manufacturers are struggling to keep pace with lofty timelines; instead committing to promises and projects that later end in disappointment and litigation.

It’s clear that the current pace to adopt clean energy in New Jersey and beyond is incompatible with today’s infrastructure and economic realities. While the impacts of climate change pose a real threat that should be addressed, states need to adopt a real approach to electrification — or face unintended consequences.

The growing electric vehicle industry is becoming increasingly familiar with these consequences.

Just over two years after President Biden lauded electric bus company Proterra’s manufacturing initiatives, Proterra filed for Chapter 11 reorganization in federal court in Delaware. The California-based company has existed for nearly two decades and recently celebrated electric vehicle battery production in South Carolina, as well as the opening of North America’s largest electric vehicle bus charging center.

Despite what seemed like major milestones in a nationwide electric vehicle adoption effort, Proterra ultimately was unable to overcome “market and macroeconomic headwinds.” Unfortunately Proterra is not alone in their financial struggles.

Just weeks before Proterra’s bankruptcy filing, EV startup Lordstown Motors also filed for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. Production of Lordstown’s Endurance electric truck faced a myriad of development obstacles since the company went public in 2020, including economic troubles requiring a $100+ million investment by Taiwanese manufacturer Foxconn. Even with the intervention, Lordstown was forced to halt Endurance production.

As New Jersey looks to incentivize light-duty electric vehicle sales with a forthcoming administrative rule, we hope that electric vehicle adoption in the state does not subject manufacturers to a similar fate.

The struggles of adapting to electrification are not limited to onshore industries. Across the Northeast, offshore energy goals are encountering hard financial realities.

In Massachusetts, offshore wind developer Avangrid is paying $48 million to terminate its Commonwealth Wind project — approved by the Department of Public Utilities just months ago. Similar agreements are forthcoming in Massachusetts, with Shell and Ocean Winds North America expected to reach an even higher termination payment. Just two days after Avangrid announced its settlement, Rhode Island’s largest utility announced it was scrapping plans for a power purchase agreement with Ørsted and Eversource; rejecting the only bid received in its October 2022 Request for Proposals.

And these problems are all too familiar in New Jersey. While Governor Murphy has hailed New Jersey as a leader in the country’s offshore wind development and aims to transition the state to 100% clean energy by 2035, making such statements a reality has faced delays, lawsuits and funding shortfalls.

The most recent development in New Jersey’s offshore wind saga comes after a legislative resuscitation of Ørsted’s Ocean Wind I project, when Governor Murphy signed a bill allowing Danish developer Ørsted to keep new federal tax incentives at the expense of New Jersey ratepayers.

New Jersey’s second major offshore wind project is now also looking to state leaders for a similar government-funded break. Shortly after Ørsted’s project approval, Atlantic Shores issued a statement suggesting their previously approved project is in jeopardy without “immediate action” and further financial aid.

Lawmakers are also calling the transparency of the state’s clean energy approach into question, urging the Board of Public Utilities to do more to address unanswered questions and concerns surrounding the impacts of offshore wind on ratepayers and tourism. UTCA and our members stand ready to provide the support to deliver energy from offshore wind to New Jersey. Until then, we hope that New Jersey’s approach to this growing industry is well thought out.

While the fate, timeline and cost of New Jersey’s offshore wind projects seems to hang in the balance, one thing remains clear — ambitions are outpacing economic reality. New Jersey continues to propose clean energy initiatives that fail to account for industry capabilities.

The unforeseen consequences of this rush to electrification are not exclusive to any industry, business or entity. Without an approach that most effectively balances our clean energy needs with currently available realities, we may all pay the price.

Dave Rible is the executive director of the Utility and Transportation Contractors Association of New Jersey.

Farmingdale – Utility and Transportation Contractors Association (UTCA) Executive Director Dave Rible released the following statement today on the passing of Lieutenant Governor Sheila Oliver:

“I had the pleasure of working with Lieutenant Governor Oliver when she was Assembly Speaker and I was conference leader. She had a unique and relentless commitment to those she represented. Though we were from different parties, our conversations were always civil and with the goal of achieving what was best for the people of this state. She was a trendsetter and a history maker; someone we can all look up to as a great example of what it means to engage in public service. UTCA offers its condolences and prayers to her family and friends. May she forever rest in peace.”

Farmingdale – Utility and Transportation Contractors Association (UTCA) Executive Director Dave Rible released the following statement today on the retirement of Governor Codey from the State Legislature:

“I can think of few people who are leaving behind a more incredible legacy than Dick Codey. His commitment to public service spans 50 years and countless bills that he helped make law that improved the lives of everyday New Jerseyans. He steadied the ship as governor during an uncertain time in our state’s history and led the charge for the widening of the New Jersey Turnpike. Governor Codey was always ready to meet colleagues with a joke, a discussion about a serious topic or, sometimes, both. Perhaps his most lasting legacy, however, will be his commitment to those with mental health issues and ensuring their voices were heard in Trenton.

“We wish Governor Codey all the best in his retirement and thank him for his decades of service to New Jersey.”