Power Bill Opposition Unites Uncommon Allies

Normally, the Sierra Club and power suppliers and energy industry groups wouldn’t have a lot in common.

But their shared opposition to state Senate bill 2381, a piece of legislation that would grant incentives to power plant development–like West Deptford Energy, LLC’s planned natural gas-fired plant here–unites them in cause, if not in spirit.

Both the Electric Power Supply Association (EPSA), an industry organization, and Newark-based power company PSEG have joined the Sierra Club in calling for Gov. Chris Christie to veto that legislation, which passed the state Assembly and Senate last week.

That legislation would grant power developers up to 15 years of capacity payments, at a long-term rate set by the state Board of Public Utilities, which could potentially mean hundreds of millions of dollars guaranteed to developers.

Jeff Tittel, director of the New Jersey Chapter of Sierra Club, criticized the bill as a handout to developers.

“This is now a hidden tax on consumers that goes into the pockets of special interests,” Tittel said.

Officials from EPSA and PSEG opposed the bill from a business standpoint.

EPSA president John Shelk said the bill was an attempt to manipulate the power market via legislation, something he said would have wider consequences.

“That is the surest way to stifling investment, job creation and innovation in New Jersey,” Shelk said.

Anne Hoskins, senior vice president of public affairs and sustainability for PSEG, said the bill is trying to fix a nonexistent problem in the claim that, without the legislation, power companies wouldn’t invest in new power generation.

She said PSEG, by itself, has spent $1.5 billion since 2007 on its power plants in the state.

Hoskins said this attempted fix could backfire on workers.

“Subsidized generation will replace nonsubsidized generation and threaten hundreds of existing jobs,” she said.

Tittel and the Sierra Club also took issue with the environmental side of the bill, which only allows for long-term contracts for fossil fuel power plants, ignoring wind and solar power, as well as energy efficiency initiatives.

“As a result of this bill, 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 Tittel. “This bill is not about green energy. The only thing green about it is the money going to the polluters.”

All three groups mentioned the potential costs for ratepayers, who would be on the hook for guaranteed capacity payments, instead of allowing the market rates–which have fluctuated between $110 and $245 per megawatt-day–to prevail.

Even further, PSEG’s Hoskins said the bill is history repeating itself. A similar situation happened in the 1970s, she said, with “disastrous results,” when government required the state’s utilities to enter into long-term contracts.

Those long-term deals cost ratepayers billions of dollars in excess payments, a fate ratepayers could see repeated with this bill, Hoskins said.

Dan Dolan, EPSA's vice president of policy research and communication, said the incentives–and the power plant–aren't necessary.

"We feel pretty strongly that the bill is the wrong thing at the wrong time," he said.

The Sierra Club’s Tittel added, “This is not about allowing good projects to go forward; this is just about subsidizing profits.”