For many months, consumer advocates and business groups have unsuccessfully pressed the Murphy administration to assess what the state’s clean-energy goals will do to the cost of electricity in New Jersey.
Now, one of the state’s largest business organizations, the Chemistry Council of New Jersey, has done its own in-house analysis on how those policies would impact its 45,000 members.
For manufacturing firms, the industry group says its results project both a steep rise in energy bills for its commercial power consumers over the short term and long haul. And that increase is just for the existing subsidy customers pay to nuclear power plants and for offshore wind, once turbines start operating off the Jersey coast, which is expected around 2027.
‘I am startled by the cost’
“I am startled by the cost and impact on my clients,’’ said Dennis Hart, executive director of the Chemistry Council. “It is just the beginning. We haven’t even started talk about transmission costs.’’
Because of the large amount of energy they use, the council’s members will pay much more than residential customers for subsidizing both nuclear and offshore wind power, two of the cornerstones of the administration’s clean-energy agenda.
Utility customers already have spent close to $1 billion subsidizing New Jersey’s three nuclear power plants over the past three years, and state regulators earlier this year approved new $300 million subsidies to the units.
Commercial vs. residential costs
According to the chemical group’s analysis, a small manufacturing site of one of its members is now paying up to $8,000 a year, and a medium manufacturing site pays $80,000 for the nuclear subsidy. For large manufacturers with multiple sites, that subsidy is as much as $320,000. The utilities have argued before regulators that without the subsidies, the nuclear plants would close.
Residential customers pay roughly $40 a year to subsidize the nuclear plants, according to PSEG, which operates the units.
To subsidize offshore wind, the industry group’s analysis says manufacturing companies will pay even more — even though the state is only a bit more than halfway to its goal of developing 7,500 megawatts of offshore wind power by 2035.
Offshore wind subsidies
For offshore wind, the group projects additional energy costs for those subsidies to run $14,600 year for small sites; $146,000 annually for medium sites; and $584,000 for large, multiple sites. The projections include all three offshore wind projects approved by the state so far, although customers will not pay for the subsidies until later in the decade when those offshore installations begin operating.
New Jersey Board of Public Utilities projected costs for the two most recent offshore wind projects approved last month. The cost for industrial customers was established at $172.25 per month for the Atlantic Shores project and $99.91 per month for the Ocean Wind II project. The cost for residents ranged from $2.21 per month for Atlantic Shores to $1.28 for the Ocean Wind II project.
“I just don’t think people understand how much electricity prices are going up and how much they will have to pay,’’ said Hart, one of several business lobbyists who have sought the state to hold off approving new clean-energy projects until it has a handle on the costs to ratepayers.
State data on future electricity prices
The state committed to providing that cost assessment in January 2020 but never delivered. In May, the BPU moved to hire a consultant to conduct such an analysis, but said it would take 18 months to finish, a delay that would ensure it would not be completed before the November gubernatorial election.
“The lack of a thorough evaluation of our electricity prices is going to hurt our economy,’’ Hart said.
Ray Cantor, a vice president of the New Jersey Business & Industry Association, agreed. While he said the group supports offshore wind policies and believes nuclear power has a role to play in the future, Cantor argued that “studies like this underscore the need for expeditious analysis of ratepayer impact to understand the total impact of the Governor’s energy policies.’’
Doug O’Malley, director of Environment New Jersey, had a different perspective. “We need to invest in clean energy projects that will scale up and drive down costs,’’ he said.