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Governor Signs New Energy Tax

Date : Tue, 1 Feb 2011 10:35:35 -0500


For Immediate Release
January 31, 2011 Contact Jeff Tittel, 609-558-9100

Governor Signs New Energy Tax Deal is a Giveaway to Special Interests at Ratepayers Expense

Late Friday evening Governor Christie signed bill S2381/A3442 into law, a handout to special interest groups and a $2 billion energy tax on the residents of New Jersey. The new law is worse than a tax because the money will go straight from consumers' pockets into the pockets of power plant developers, owners, and operators.

"The Governor approved a more than $2 billion giveaway at the expense of the environment and consumers," said Jeff Tittel, Director New Jersey Chapter of Sierra Club. "The Governor chose to subsidize fossil fuels over promoting clean energy and the public health of New Jersey residents. When introduced this was one of the worst bills ever. It was amended to make it worse and then the Governor signed it."

The new law will allow for certain gas generating facilities to go into 10 year contracts, which will lead to the subsidization of generators. This bill will not be beneficial to New Jersey. The price of natural gas has been dropping - it has dropped by 50 percent in last two years. Basically, this is a $2 billion give away on $1.5 billion worth of projects and could ultimately cost consumers $4 billion over the life of the contracts.

At the same time New Jersey is not allowing for long term contracts for wind and solar. This bill is not for projects that convert coal plants to natural gas, a policy that would benefit both the environment and the numerous communities throughout New Jersey with poor air quality and health problems as a result of dangerous coal-fired plant emissions.

"This bill is not about green energy. The only thing green about it is the money going to the polluters," said Jeff Tittel.

The subsidy approved Friday by the Governor promotes continued fossil fuel use at the expense of renewable energy and energy efficiency initiatives by allowing large power plant developers to be guaranteed a 100% return on their investment.

The new law also mandates higher costs to utilities to purchase the power created in those plants. Over the next 6 years alone these contracts will cost PSEG consumers $1 billion dollars and other utility consumers up to $2 billion.

Furthermore, the power generated at these facilities could be sold out of state and there is no guarantee the electricity will stay in New Jersey.

New Jersey passed energy deregulation in 1999 that was intended to create competition in the market to lower energy prices. Now the state wants to undermine the deregulatory system by subsiding power producers and forcing energy prices to skyrocket higher. This legislation not only subsidizes fossil fuels, but allows utilities to make a 20 percent profit on the backs of consumers.

"The Governor signed a bill that will raise utility rates only to enrich power plant owners," said Jeff Tittel. "This is now a hidden tax on consumers that goes into the pockets of special interests."

The law will eliminate the Societal Benefits Charge (SBC) for power plant operators purchasing natural gas to produce electricity. This surcharge on natural gas use funds the state's clean energy programs. Removing the SBC through this bill will cost Clean Energy programs in New Jersey tens of millions of dollars each year.

"As a result of this law, not only will residents be exposed to more pollution from fossil fuel plants but the state will have less money to invest in the development of solar, wind, and energy efficiency programs," said Jeff Tittel.

The law will subsidize up to 2000 megawatts of electrical generation, the equivalent of four medium sized power plants. The plants constructed through this law will be sited in minority and poor communities that are already overburdened with pollution. Instead of promoting green jobs in these areas, the state is promoting the construction and expansion of dirty energy in neighborhoods suffering from degraded air quality and excess pollution.

In the 1970s, New Jersey pursued a similar undertaking providing subsidies for the construction of power plants, with devastating financial results. The state required long term contracts similar to what is being proposed now. That experiment taught us such policies cost consumers billions of dollars. Decades later we are all still paying for that mistake and now New Jersey is about to do it again.

"This is not about allowing good projects to go forward; this is just about subsidizing profits," said Jeff Tittel. "Subsidizing fossil fuels will not only add more pollution to the environment but will undermine New Jersey's clean energy programs, taking away money from renewable energy and energy efficiency. The Governor signed a giveaway for special interests that will hurt our lungs and our wallets."

Kate Millsaps, Program Assistant NJ Sierra Club 145 W. Hanover Street Trenton, NJ 08618 609.656.7612 (f) 609.656.7618  <>  

att2d1a5.jpg Received on 2011-02-01 07:35:35

New Jersey Sierra Club, 145 West Hanover St., Trenton, NJ 08618, USA
tel: 609 656 7612, fax 609 656 7618
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