SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
[First Reprint]
SENATE, No. 2484
with committee amendments
STATE OF NEW JERSEY
DATED: NOVEMBER 12, 2020
The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 2484 (1R), with committee amendments.
This bill, as amended, would establish the Office of Clean Energy Equity (“office”) in the Board of Public Utilities (“BPU”). The office would be charged with promoting, guiding, and overseeing the equitable deployment of clean energy, energy efficiency, and energy storage programs and technologies in overburdened communities, and the equitable provision of the tangible benefits of clean energy, increased energy efficiency, and energy storage at the household and community level, including clean energy asset ownership, energy cost savings, and employment and economic opportunities, to overburdened communities. The bill would require the BPU to: (1) establish onsite solar or community solar programs, which benefit 250,000 low income households or 35 percent of the low income households in the State, whichever is larger, by 2030, with the goal of reducing these households’ average energy burden to below six percent of household income; and (2) require the establishment of a minimum of 1,600 megawatt hours of energy storage to benefit overburdened communities by 2030.
In addition, the BPU, in cooperation with the office, would be required to: integrate workforce development training into all clean energy and energy storage programs established by the BPU; provide outreach and recruitment campaign grants to community-based organizations to increase participation in clean energy and energy efficiency programs; develop, in coordination with community-based organizations, outreach materials in multiple languages; appoint a community liaison and establish an advisory board consisting of representatives of overburdened communities to review and evaluate the clean energy and energy storage programs available to overburdened communities; and coordinate with the Department of Labor and Workforce Development and the Department of Community Affairs (DCA) concerning their responsibilities pursuant to sections 2 and 3 of the bill.
The bill would require the BPU to direct no less than 10 percent of the BPU’s annual total clean energy budget, or at least $50 million annually, whichever is greater, to the office for the purposes of the bill. The BPU would be authorized to allocate additional funding, staff, and resources to the office as it determines appropriate.
In addition, the bill would require the Department of Labor and Workforce Development, in consultation with the office and the New Jersey Economic Development Authority, to establish a program to provide grants to community-based, diversity-focused nonprofit organizations, community colleges, and vocational-technical schools to develop solar energy or clean energy paid workforce training programs that provide training to at least 2,500 individuals from overburdened communities by 2025. The department shall require, as a condition of a grant award, that the programs be updated every two years to ensure that they prepare participants adequately for the current job market in the solar energy or clean energy industry. The bill would also direct the Department of Labor and Workforce Development, in coordination with community-based organizations, to develop programs to provide entrepreneurial training, mentoring, apprenticeships, investment capital, loans, or other training, capacity building, technical, and financial support to residents of overburdened communities to help launch new clean energy enterprises or establish careers in the clean energy workforce.
Under the bill, the DCA, in consultation with the office, would require all new construction located in an overburdened community to be solar ready, subject to any specific exemptions that the department and the BPU deem reasonable and necessary and that the department adopts as rules and regulations. The bill would also require the department to give preference to applications for onsite, community solar, energy storage, or other clean energy projects that are sited in overburdened communities or include minority or women-owned businesses.
Lastly, the bill would amend the current law establishing the Community Solar Energy Pilot Program to require that the eventual permanent community solar program provide for access to solar energy projects for low and moderate income customers, in accordance with the requirements of the bill. The bill would also require that the permanent community solar energy program be established by rule or regulation no later than the date on which the BPU adopts rules and regulations establishing a permanent successor to the solar renewable energy credit program (SREC) program. In addition, the bill would require that the program be consistent with any land use provisions of the permanent successor to the SREC program currently being developed by the BPU.
COMMITTEE AMENDMENTS:
The committee amendments to the bill would:
(1) clarify that the BPU is required to establish 1,600 megawatt hours of energy storage, capable of delivering 400 megawatts of power, to benefit overburdened communities by 2030;
(2) provide that the energy storage systems required by the bill may be sited in alternative locations that increase the resiliency and reduce the energy burden of overburdened communities;
(3) provide that five percent of funds appropriated to the Office of Energy Equity may be used for administrative expenses, rather than 10 percent;
(4) provide that community colleges and vocational-technical schools, in addition to nonprofit organizations, are eligible to receive grants to create workforce development programs under the bill;
(5) amend existing law to require that the permanent community solar program, under development by BPU, be consistent with any land use provisions of the permanent successor to the SREC program also being developed by BPU;
(6) extend the deadline for a study of utility rate schedules required by the bill to 270 days after enactment, rather than 180 days; and
(7) make technical amendments.
FISCAL IMPACT:
The Office of Legislative Services projects that the bill will result in indeterminate direct annual State costs of at least $50 million, attributable to the required minimum funding level for the Office of Clean Energy Equity from the Board of Public Utility’s (BPU) clean energy budget. Unless sufficient clean energy fund surplus balances exist, this increase in expenditure of clean energy fund monies could result in a decrease in other State expenditures tied to the clean energy fund, or result in an increase in the utility rate surcharges that comprise the Societal Benefits Charge (SBC), of which the clean energy fund is a part.
The bill will also result in an indeterminate increase in BPU spending to support grants for clean energy workforce training and to fund the community solar energy pilot program. To the extent that existing funding from the SBC is unable to support these programs, the spending is likely to be supported by increasing surcharges applied to the utility bills of all ratepayers. Given that all State and local entities consume and pay for energy, indirect State and local costs will increase based on the increase in their utility bills which will be spread across the entire rate base paid by all energy consumers.
The additional expenditures outlined in this bill will serve public purposes of increasing the generation of solar and renewable energy, job and skills training in overburdened communities, and reduced energy costs for low-income households. These measures may have an indirect fiscal benefit to the state in the form of higher State tax revenues and lower State and local expenditures on publicly provided health care, jobless benefits, and other social safety net programs if the expenditures are able to improve air quality and individual health outcomes and improve resident employment and job skills in targeted areas. The proportion of these potential indirect benefits against the direct costs of the program cannot be known beforehand.