Position Paper on the Energy Deregulation

The Green Party of New Jersey
Updated May 2, 1999
Position Paper on Energy Deregulation

Draft Policy Paper: Energy Policy—Utility Deregulation

New Jersey's Energy Deregulation

David D. Gregory

Background: Energy Policy

Consumption of non-renewable fuels is climbing and reserves are rapidly diminishing. This global industrial metabolism is deeply flawed, resulting in immense negative consequences, from pollution and social conflicts to economic and military impacts.

We believe that a new energy policy is critical to these issues of economic, ecological and cultural sustainability. Our goal is a transition to a more efficient use of energy, a structured deregulation and decentralization which allows a diverse, dynamically stable, and adaptable system of power generation from new sources which are non-polluting, highly efficient, safe, and reliable. Our policies support research on the development of solar photovoltaics, fuel cell technology, hydrogen fuels, wind, hydro, and gas turbine co-generation.

Deregulation

All 50 states are deregulating their utility companies, hoping to increase competition and reduce rates for their citizens. The trend has great possibilities, and problems. With full disclosure about sources of power, removal of government subsidies and regulatory loopholes, the true costs of power generation will become apparent, opening a gateway for alternative energy suppliers. In California, "net metering" has already brought renewable energy systems into a far greater number of households, businesses, and institutions. It also allows consumers to boycott Nuclear Power Plants.

Many consumers may chose to buy from the least expensive supplier, sending power from a highly polluting plant which is far away. Without structured deregulation and national standards, a race to the bottom will ensue. For New Jersey residents, this is especially harmful: over 33% of our pollution blows in from out of state, largely from coal burning power plants in the Midwest. These pose a grave threat to our health, and to the potential for alternative energy sources and energy efficiency programs.

Deregulation in New Jersey:

The legislation for deregulation (A529, text at http://www.njleg.state.nj.us/9899/bills/a1000/529_i1.pdf_) is fraught with problems:

It allows an extended reduction time line, while being unclear about how the phase-in of reductions would occur. New Jersey has the 4th highest electricity rates in the nation, and we believe rates can be reduced 25% within a very narrow time frame.

It prevents Municipal Aggregation, which would allow leveraging a lower rate through energy purchasing by groups, local, county, or other, for 3 years.

It leaves our utilities with "stranded costs" from prior investments which will not be profitable after restructuring. The bill would have rate payers continue footing the bill, rather than the investors taking the loss on a failed venture, and amounts to corporate welfare.

It imposes a 90-day delay on the minimum of provisions for Consumer Protection and Universal Service in place now. As the bill is currently worded, it will be a minimum of 9 months before this issue can even be heard. Every state that has restructured has included specific dollar amounts and programs to ensure Universal Service but the Legislation absolutely needs to include the recommendations of the Consumer Protection Advisory Task Force, preventing discrimination based on race or income. There must also be reporting standards similar to those in the Home Mortgage Disclosure Act.

It allows the BPU, with only two out of its three members appointed and little to no citizen representation, to decide many of these issues. We support the call in A1211 for an increase to 5 members, and greater citizen representation.

In short, we need to take strong action on this bill, shaping it to include all the great benefits of restructuring, while removing the sections which do more harm that good. Proper restructuring will facilitate our larger goals of a sustainable energy policy.

	It allows an extended reduction time line, while being unclear about how the phase-in of reductions would occur. New Jersey has the 4th highest electricity rates in the nation, and we believe rates can be reduced 25% within a very narrow time frame.
	It prevents Municipal Aggregation, which would allow leveraging a lower rate through energy purchasing by groups, local, county, or other, for 3 years.
	It leaves our utilities with "stranded costs" from prior investments which will not be profitable after restructuring. The bill would have rate payers continue footing the bill, rather than the investors taking the loss on a failed venture, and amounts to corporate welfare.
	It imposes a 90-day delay on the minimum of provisions for Consumer Protection and Universal Service in place now. As the bill is currently worded, it will be a minimum of 9 months before this issue can even be heard. Every state that has restructured has included specific dollar amounts and programs to ensure Universal Service but the Legislation absolutely needs to include the recommendations of the Consumer Protection Advisory Task Force, preventing discrimination based on race or income. There must also be reporting standards similar to those in the Home Mortgage Disclosure Act.
	It allows the BPU, with only two out of its three members appointed and little to no citizen representation, to decide many of these issues. We support the call in A1211 for an increase to 5 members, and greater citizen representation.