Gov. Corzine: United States Has Much to Learn from New Jersey Energy Programs

NEW BRUNSWICK, N.J.—New Jersey’s energy programs offer a template for federal action on climate, energy efficiency and renewable power, the state’s governor told a regional energy summit today. “I think we are doing a lot to move forward on alternative energy,” Gov. Jon Corzine (D) said. “It is happening broadly across our state.”

New Jersey’s success in helping launch the nation’s only government-regulated, cap-and-trade program for greenhouse gases “without a huge hue and cry” shows strong public support for fighting climate change, Corzine told the Council on Competitiveness gathering at Rutgers University. The meeting is part of a series of regional gatherings designed to influence debate on new energy and climate legislation. While not perfect, the move by Northeastern states to the Regional Greenhouse Gas Initiative, or RGGI, provides lessons for Congress and the Obama administration, Corzine said. RGGI “is off to a terrific start,” he said.

As part of its energy master plan, New Jersey is committed to ambitious goals, including generating 30 percent of its electricity from renewable sources, cutting overall energy consumption by 20 percent and reducing emissions of carbon dioxide and other heat-trapping gases by 25 percent within the next 11 years, Corzine said. Among initiatives to help the state meet its goals, Corzine cited the state’s market for trading renewable energy credits (RECs) from solar power. The state’s RECs trade at some of the highest prices in the solar market, helping make New Jersey second to California in the volume of installed solar capacity. New small-scale solar projects continue to sprout in New Jersey despite the economic downturn. Rutgers is nearing completion of what is billed as the largest U.S. solar plant on a college campus.

Immediately after his speech, Corzine visited a new solar project being built on the East Rutherford campus by the pharmaceutical giant Merck & Co. The state Board of Public Utilities is also working with PSEG, New Jersey’s largest energy provider, to develop an offshore wind farm near Atlantic City. Developers are racing in Massachusetts, Delaware and Rhode Island to build the nation’s first offshore wind plant; the New Jersey project is expected to generate 1,000 megawatts by 2013 and 3,000 MW by 2020. The state is also pursuing policies designed to encourage geothermal power generation. But Corzine warned that efforts to launch various clean energy initiatives have pitfalls.

“It is very challenging,” he said, “to be able to make certain that we get the price and execution of energy efficiency programs, in particular, rolled out. “New Jersey is struggling to get homeowners and businesses to enhance their energy efficiency. And state regulators are experimenting with “decoupling” electricity-rate rules designed to eliminate the paradox of electricity providers losing revenue as they encourage customers to reduce electricity consumption. Designing a system to encourage energy efficiency in households is thus far proving the greatest challenge, Corzine said. Regulators and utility executives are trying to learn how to nudge households toward making often-expensive retrofits without raising electricity rates substantially, since New Jersey residents already pay some of the highest power prices in the country.

“I think it’s safe to say that we have some work to do,” Corzine said. “We’re looking for that right mix so that we can actually unfold a broad-based, scaled program.”