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New Jersey Energy Coalition On the 2011 Draft NJ Energy Master Plan On behalf of the members of the New Jersey Energy Coalition, thank you for the opportunity to provide comments on the 2011 Draft New Jersey Energy Master Plan (EMP). As background, the New Jersey Energy Coalition (Coalition) is a broad-based advocacy group whose membership includes over 100

Energy Coalition

business, industry and labor organizations and policy leaders from across New Jersey. Some of our more prominent members include: NJ SEED, NJ State Chamber of Commerce, NJ Business and Industry Association, Chemistry Council of New Jersey, NJ Alliance for Action, Southern New Jersey Development Council, NJ AFL-CIO and NJ IBEW. Our Advisory Board is comprised of a number of the States distinguished citizens including former congressmen, state legislators, mayors, and utility regulators. Our mission is simple: raise public awareness and generate public support for the increased production and distribution of clean, affordable and reliable energy in our state. Since it was founded in 2007, the Coalition has been actively engaged in promoting these objectives and commented on the 2008 EMP. Our leadership and staff possess vast experience in public policy issues in New Jersey and proven energy expertise that make the NJ Energy Coalition uniquely qualified to provide comments and feedback to the Christie Administration on the 2011 Draft EMP. As a matter of policy, the Coalition supports the five overarching goals of the NJEMP: Drive down the cost of energy for all customers. Promote a diverse portfolio of new clean in-state generation. Reward energy efficiency, conservation and reduce peak demand. Capitalize on emerging technologies for transportation and power production. Maintain support for RPS of 22.5% by 2021.

We salute the Christie Administration for its forthright, balanced approach to charting the critical course for our States energy needs. Because it is often one of the largest expenses for business and industry, the Coalition believes that energy can be a major driver to improve economic conditions. It also provides high-paying long-term employment and other financial benefits through its ripple effects on the economy. Therefore, it is incumbent upon policymakers to create a climate where adequate supplies of clean, reliable electricity and natural gas enable businesses to thrive and prosper. The Coalition also believes that the environment must be protected. We support a balanced approach that assigns reasonable quantifiable energy targets and sets goals that will not harm New Jerseys quality of life or the rich natural

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recommendations: 1. The Coalition supports the expansion of nuclear generation.

Energy Coalition

resources that our residents and visitors enjoy. To that end, the Coalition offers the following ten specific

We applaud the Christie Administration for its clear understanding of the need for carbon-free base-load nuclear power. As acknowledged in the EMP, the only carbon emissions free technologies available in the State are wind, solar and nuclear power. Fuel diversity and cost of compliance with greenhouse gas (GHG) requirements make it important to consider nuclear power when the market signals the need for new generation. Capacity factors for nuclear are 80% or greater, making its overall cost-per-kilowatt-hour a viable option for economical electricity. As noted in Table 12 on page 87 of the EMP, nuclear is clearly cost competitive compared with other options being considered such as offshore wind and solar photovoltaic (PV). Nuclear energy plays an important role in New Jerseys energy supply. New nuclear will create jobs, improve system reliability and help us achieve our greenhouse gas reduction goals. We also strongly support the Christie Administrations recommendation to accelerate a solution for spent nuclear fuel. We urge the Christie Administration and our New Jersey congressional delegation to support recently proposed federal legislation that would create two federal interim storage facilities for used nuclear fuel from U.S. nuclear power plants.

2.

The Coalition supports a net economic benefit test on the development of off-shore wind.

Although the development of a Mid-Atlantic offshore wind industry could potentially offer net economic benefits if related manufacturing and materials supply chain businesses locate in our state, we are concerned about the high costs of offshore wind. Given its limited operating capacity and high capital costs, we suggest that caution and diligence be exercised by the BPU in authorizing these investments and managing costs for New Jersey ratepayers. 3. The Coalition does not support LCAPP.

The Coalition does not support state subsidization of new generating capacity in New Jersey under the LCAPP legislation and further supported in the EMP. A clear benefit of electric restructuring was shifting construction, operation and maintenance risks for costly generation from consumers to investors. New Jersey is fortunate to be part of PJM, which is a multi-state regional competitive wholesale market operated on sound economic principles and responsible for ensuring reliable electricity service. In fact, during the recent heat wave, PJM managed all-time record high demands and operated the system seamlessly. Besides PJMs proven ability to maintain reliable service, it has record high supply reserve margins, and existing market prices signal that no new generation is currently needed. Subsidizing unneeded, uneconomic generation will not only discourage investment in new competitive generation when it is needed, it will deter investment in existing generation and clean, cost effective energy efficiency and demand response programs. 4. The Coalition supports the development and utilization of new technologies and regulations that help consumers save on energy usage.

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Jerseys EMP. We need new approaches that create the right environment so that reductions in energy cost recovery such as decoupling. 5.

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Smart meters, incentive rates, dynamic pricing and consumer education should be cornerstones of New use do not negatively affect the utilitys cost recovery that is necessary to insure continued investment in infrastructure. The Coalition supports the development of new rate structures and methodologies for utility

The Coalition supports the creation of a long-term economic development plan for the energy sector with job growth targets and investment incentives that allow New Jersey to prosper.

Energy can have positive economic impacts when driven by competitive forces.. In addition to strengthening the reliability of power supplies, the right energy policies can create sustainable employment. The competitive development and manufacturing of new technologies, implementation of energy efficiency and demand response programs, and construction and operation of new generation when needed can all have a positive economic impact. For example, the construction and operation of a new nuclear facility here in New Jersey would create 1,400 to 1,800 high-paying jobs during construction and 400 to 700 permanent jobs for operation. While providing subsidies to enable the development of energy programs and facilities seems helpful to the cause, it can actually have devastating long-term economic impacts. The Coalition urges the Administration to carefully analyze the long-term net benefits of its policies that do not rely exclusively on competitive market forces. 6. The Coalition supports developing alternative fuels for transportation as a means of obtaining energy independence and reducing reliance on foreign energy supplies. Transportation is critical to New Jersey and a key to maintaining clean air quality for our residents. Electric and alternative fuel vehicles and related distribution and refueling infrastructure should be given a high priority by the Christie Administration. Tax incentives for research and development, as well as manufacturing of alternative fuel components and infrastructure should be actively considered by the Christie Administration. We would urge the development of more specific recommendations, timeframes and goals for the transportation sector as it is evidently the States greatest source of air pollution. 7. The Coalition supports the build-out and investment in smart grid technology.

Smart grid technology is poised to play an integral role in reducing electric consumption and balancing energy use throughout New Jersey. A smart grid would use digital technology to improve reliability, security and efficiency while improving the function of the electrical grid. The Coalition supports the Administrations commitment to monitor the development of smart grid technology, but we urge it to produce a more specific strategy for the implementation of smart grid that will supplement and coincide

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as directed in the EMP. 8. and gas distribution systems. Maintaining and improving our electric and natural gas infrastructure is as important as having reliable
st and sufficient energy supply. Without an energy delivery system that meets 21 century standards, the

Energy Coalition

with the build-out of renewables, distributed generation, energy efficiency programs and electric vehicles

The Coalition supports the BPU providing more incentives for capital improvements to electric

goals of this EMP cannot be met. The Coalition supports the BPUs evaluation of providing additional incentives to EDCs for capital improvements to their electric and gas delivery systems as these improvements will reduce cost of capital, lower project cost and ultimately reduce the burden on ratepayers in the long-term. The Coalition also notes that the Federal Energy Regulatory Commission recently released its long awaited Order No. 1000, a final rule to reform its transmission-planning and cost-allocation requirements, which should facilitate the development of new transmission facilities and lower the costs of transmission services. 9. The Coalition supports energy efficiency and conservation as a primary tool in New Jerseys energy toolkit. The old adage that the best kilowatt is the one that isnt produced is true. New Jersey must strengthen its building codes and regulations to promote efficient use of energy. Encouraging lower use, particularly at the time of peak demand, is an important policy that must be mandated. The Coalition also believes that administration of energy efficiency programs funded by ratepayers should be performed by the electric and gas utilities, given their natural link to the end-use customer. Costs of program administration should be minimized and recovered through rates, balanced with requirements for lowering energy usage. We support specific measurable targets for energy efficiency and clear accountability for achieving those reductions. We would urge the Christie Administration and the BPU to quickly determine what delivery mechanisms and incentives are best for achieving the goals set out in the EMP for energy efficiency. 10. The Coalition supports renewable energy that can be cost justified such as CHP and biomass. The Coalition supports the development of cost effective renewable energy. For example, the Coalition supports the creation of community solar projects that benefit indigenous New Jersey entities and residential energy users that may not be able to undertake such a project on their own. The Coalition agrees with the Christie Administration and does not support the development of large-scale solar that does not directly benefit ratepayers. We also agree that farmland should not be utilized for renewable energy projects.

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In line with the EM Ps directive to lower the cost of solar incentives on nonparticipants, and as a further refinement to its renewable cost benefit analysis, the Coalition would propose that the BPU prioritize access to solar PV for those entities that derive the most benefit for our citizens, particularly governmental, educational and healthcare facilities (i.e. schools, colleges, hospitals). Enabling these

Energy Coalition

entities to install solar PV provides the greatest value, since lower energy costs are passed along directly to taxpayers and ratepayers. It is important to note that the Global Warming Response Act, P.L. 2007;c.1 12, requires measures to reduce the emission of GHG, and as such a further analysis of this plan is necessary to ensure achievement of the targets set forth in the law.

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