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Christie's Ratepayer Rip Off

Date : Mon, 4 Jun 2012 11:07:56 -0400

For Immediate Release
May 30, 2012 Contact Jeff Tittel, 609-558-9100

Christie's Ratepayer Rip Off: Subsidies Cost NJ Ratepayers Millions Two new natural gas plants have been approved to receive excessive rate payer subsidies and guarantees.Legislation passed last year established the subsidies for three new plants, but only two so far were cleared in an auction by the regional grid operator, PJM.The contracts released last night reveal a plant proposed by Hess in the Ironbound section of Newark will receive a guarantee of sales and subsidies of about $56 million a year, or 22 cents a kilowatt when average gas electricity wholesale prices are currently around 4.5 cents.They are receiving at least 25 million in direct subsidies.The second plant in Woodbridge proposed by Competitive Power Venture will receive even higher guaranteed sales and subsidies, about $68-95 million a year.Over the 15 year contracts, this will be over 1.2 billion for the CPV and up to $400 million for the Hess plant.The Hess facility will be a 625-megawatt plant while the Woodbridge plant will produce 663 megawatts.Both plants have been approved by the Board of Public Utilities.Under this plan New Jersey ratepayers will be paying double or triple the cost of gas.This comes while Governor Christie is undercutting our clean energy programs and diverting clean energy funds to close budget gaps.

"This is the Great Gas Ripoff. The Christie administration is robbing the average consumers of New Jersey by subsidizing these power plants.These companies are getting huge subsidies at the expense of the environment.These plants will cost more than solar energy without any of the environmental or green job benefits.The Christie administration is subsidizing air pollution and dirty fossil fuels while gutting our clean energy programs," said Jeff Tittel, Director, NJ Sierra Club. The subsidies come from LCAP legislation passed last year, allowing these two plants into enter a 15 year contract, despite the plummeting price of natural gas.This is a dirty deal for rate payers as the price of natural gas is now at its lowest level in 30 years, dropping by 50 percent in last two years.Currently New Jerseyans pay between11 and 12 and natural gas electricity sells for 4.5 cents a kilowatt wholesale.By charging 28 cents a kilowatt, these companies are going to be making obscene profits at the expense of New Jersey ratepayers.The CPV plant would generate $11 million the first year if charging the wholesale price of gas, but they are charging 28 cents, guaranteeing a $68 million profit.That is a $57 million subsidy in the first year.Their profit margin will be over six-times the cost of gas electricity production.The can earn up to $75 million a year over the fifteen year contract. They are guaranteed automatic sales and a massive return, even if that power is not used or it is shipped to New York.The plants will also receive a tax break where they do not have to pay the Societal Benefits Charge on the gas they buy.The business community that complains about high energy costs should be up in arms over this increased cost. These subsidies will actually increase rates for New Jersey consumers while driving down rates in adjoining states, hurting New Jersey competiveness in trying to bring in new businesses.

"These plants are receiving corporate welfare.These plants hurt the ratepayers, the environment, and public health," said Jeff Tittel. The Governor is subsidizing gas plants while claiming that the prices for solar and wind are too high.Yet he is giving bigger subsidies to fossil fuels while robbing clean energy funding that creates more jobs and is better for the environment.This is the ultimate hypocrisy.These subsidies are higher than solar subsides.Solar currently receives 21 cents a kilowatt hour and the price of solar is dropping.With solar the money stays in New Jersey and we are not subsidizing fracking and air pollution. Both the grid operator PJM and the Federal Energy Regulatory Commission (FERC) have stated that these subsidies violate the fair competition clause of the National Energy Policy Act.A third plant was approved in the auction, the 738-megawatt LS Power plant in West Deptford.LS Power announced back in November that they are moving forward with the plant with private funding, after not qualifying for the ratepayer subsidies offered to the Newark and Woodbridge plants.This shows that the subsidies are not necessary and are just a rip-off of consumers and ratepayers.

"We are supposed to have energy deregulation with competition lowering prices.Instead Governor Christie is guaranteeing our electric bills are going up and that we will be paying through the nose to subsidize these fossil fuel plants," said Jeff Tittel. With the Hess plant we are subsiding more pollution in the Ironbound section of Newark.This community already has a disproportionate share of air pollution and the plant will emit up to 1000 tons of air pollution a day.This is already one of the most heavily polluted communities in the United States.This plant will impact the health of the people in the community, especially those with asthma and respiratory diseases.

"The people in Newark will be subsidizing more air pollution that will send them to the hospital," said Jeff Tittel. The natural gas used at these facilities will come from fracking operations in Pennsylvania and other states.Fracking operations cause serious air pollution and have been linked to groundwater contamination.New Jersey ratepayers will be subsidizing this pollution and the increasing pipeline infrastructure being installed across our open spaces and important water supply watersheds to carry the fracked gas from Pennsylvania to New Jersey.

"The governor is being fossil fuelish with the ratepayer money of New Jersey residents at the expense of clean air and green jobs," *said Jeff Tittel*.

-- 
Kate Millsaps
Program Assistant
NJ Chapter of the Sierra Club
609-656-7612
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Received on 2012-06-04 08:07:56

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