Tag Archive: Energy Master Plan

Saving money for NJ consumers while planning for a new energy infrastructure.

The Christie administration has just issued the draft of the 2011 Energy Master Plan.  Two of the overarching goals are “Drive down the cost of energy for all consumers” and “Promote a diverse portfolio of new, clean, in-State generation”.

Since 2003, the State of New Jersey has had legislation that allows local governments to play a leading role in implementing the two goals above.

Unluckily, this opportunity has been completely ignored.

The Government Energy Aggregation Act of 2003   (PL. 2003, C24), authorizes municipalities and/or counties of New Jersey to establish Government Energy Aggregation (GEA) programs simply by passing an ordinance or a resolution.  A GEA program allows municipalities, working alone or in a group, to aggregate the energy requirements of residential, commercial and municipal accounts at the same time.  This approach gives the opportunity to qualified Third Party Suppliers (TPS) to bid on contracts for substantial quantities of energy (electricity and/or natural gas) that are put on the market by municipalities participating in a GEA program.

New Jersey residents are already receiving offers to procure electricity and gas from suppliers, other than the local utilities, based on an array of, sometimes confusing, plans with potentially expensive early termination clauses.   GEA programs allow municipalities, working alone or in a group, to offer their constituents a substantially higher level of protection and assurance without any additional risk to themselves.

The current NJ legislation and the subsequent BPU rules, contain clauses that make implementation of GEA programs extremely favorable to the end users. Among the most notable features are:

Trenton’s Energy Wizard

For me, as an engineer and a political junkie, listening to Assemblyman Upendra Chivukula give a speech is a treat. The legislator from Somerset county is a walking encyclopedia on energy, both from the policy and technology standpoints. Before he went to Trenton, the engineer-politician designed power plant simulators and worked at one of the premier research institutions on Earth, AT&T Bell Labs.

undefinedChivukula gave the keynote address at the NJ/PA Sustainability Forum on the Rutgers – Camden campus today. He provided a concise summary of the state of energy production and distribution as well as his view of the energy-political landscape.

With all the attention on other issues, Chivukula said that it’s difficult to get the general public interested in energy policy. Media coverage is sparse, and with our cheap and (usually) reliable electricity supply, he said, most people take energy for granted.

Chivukula pointed out that New Jersey gets over half its energy from the four nuclear plants in the state – three in Salem County and one (Oyster Creek) in Ocean County. But Oyster Creek’s operating license will expire in 2019. (The plant’s owners, Excelon, refused to build cooling towers to protect Barnegat Bay, hence the plant will be decommissioned at the end of the current license.) The closing of the plant will leave a 640 megawatt hole in New Jersey’s electricity production.

While he pointed out that energy is a non-partisan issue, Chivukula lamented the politicization leading to delays in the release of Governor Christie’s Energy Master Plan. He said that all the governor’s people are doing is tweaking the 2008 plan, but no one in the legislature has had any input to it. Offshore wind is part of this plan, but there’s a seven-year permitting process and the deep water sites are conducive to construction only two months of the year.

He spent a lot of time discussing Governor Christie’s conditional veto of A2529, a bill to promote renewable energy, and felt that the veto was based on a fit of pique by one of the governor’s aides and not on the merits of the bill. Chivukula also pointed out that sixty percent of our greenhouse gases come from transportation, so it is critical that the Energy Master Plan address that also.

I wish I were wonky enough to understand everything in his remarks, but alas, I am not. We elect our legislators to do the hard work of understanding the issues and promoting legislation that meets our needs. While I’m leery of most politicians (in both parties), Assemblyman Chivukula is one who my gut tells me is doing the right things, and deserves our support.

New Jersey – The Green & Clean Garden State

Christine’s on staff at Sierra Club-NJ – Rosi

What is the future of New Jersey?  Will New Jersey continue to be the polluted view that people get from the Turnpike?  Or will it be a clean, bright and innovative future that will make New Jerseyans proud.  Governor Christie addressed this very topic in last week’s State of the State.  The  governor referred to the “New Jersey of our youth”, “setting a national example” and a “step in a very new direction”.  Now it us up to the governor and New Jerseyans ensure that is the right direction.

The Garden State’s past has been checkered with pollution and dirty industry.  [more below the fold]

Bully Bob Martin Now Attacks BPU and Rutgers on Energy Master Plan

[for version with supporting links:

http://www.wolfenotes.com/2010…

Martin: BPU/Rutgers EMP “one of the worst pieces of economic analyses I’ve ever seen”

Fresh off last week’s unprecedented and false attacks on DEP scientists and Senate Majority Leader Barbara Buono, DEP Commissioner Bob Martin repeats and expands his errors.

Martin now is attacking the Board of Public Utilities staff, Rutgers economists and planners, and state econometric and energy models.

A “NJ Spotlight” story by former longtime Star Ledger energy and environment reporter Tom Johnson reported on the Assembly oversight hearings on how Governor Christie’s 90 day “reassessment” and more than $300 million cuts will impact the Energy Master Plan (EMP) – we wrote about the Assembly hearing here). In the Spotlight story, Martin blasted the economic analysis of the EMP.

But compare Martin’s hack attack with the professional response of his colleague, BPU President Lee Solomon (who merely put a happy face on a bad Christie policy):

   

Cabinet officials insist they do not envision a radical rewriting of the [Energy Master] plan. But Department of Environmental Protection Commissioner Bob Martin and Board of Public Utilities President Lee Solomon have made it clear they believe it fails to consider the economic consequences of pursuing such ambitious targets, including reducing energy consumption by 20 percent by 2020. …

   “There has to be a cost benefit analysis on the things we do,” said Solomon, whose agency will take the lead in reviewing the plan. “We can’t simply impose what we would like to happen on the state of New Jersey.”

   Martin is even more adamant about the plan’s flaws. “It is one of the worst pieces of economic analyses I’ve ever seen done,” he said at a clean energy summit in New Brunswick last month. “They didn’t put the numbers of what it would cost the ratepayer or industry.”

Like the bully on the playground, someone has got to take Mr. Martin on. He can not be allowed to go around trashing things and people he knows so little about.

Although I trained in planning at Cornell’s Graduate School and was a DEP planner and policy analyst for 13 years, I am no expert on the EMP and economic modeling. But it might as well be me because I don’t see any profiles in courage out there stepping up to the plate and taking on Bully Bob Martin.

The economic analysis of the EMP was conducted by Rutgers University (see: Updated Modeling Document) :

   

The Center for Energy, Economic and Environmental Policy (CEEEP) and the Rutgers Economic Advisory Service (R/ECON™), both located within the Edward J. Bloustein School of Planning and Public Policy of Rutgers, the State University of New Jersey, have been tasked by the New Jersey Board of Public Utilities (BPU) to provide data and modeling support for the master plan effort.

The data for the U.S. used come from Global Insight, Inc., a national leader in economic forecasting

The economic analysis was based on econometric and energy models used widely in NJ. The modeling and economic analysis were extensively reviewed during a 2 year planning process:

 

A series of prior events helped to build the foundation for this report. On December 18, 2006, CEEEP and R/ECON™ presented the modeling framework used in this report to stakeholders. On January 5 and 19, 2007, CEEEP convened two technical working groups to elicit input on electric generation and transmission. In addition, CEEEP and R/ECON™ participated extensively in many stakeholder meetings convened as part of the Energy Master Plan process from late 2006 through September 2008.

The electric utilities and the business community participated in the EMP model development, planning, and economic analysis.

If  the Rutgers economic analysis “was one of the worst pieces of analysis ever done” as Martin now claims, where were the energy industry experts and business community economists and why weren’t they raising objections to correct such a flawed piece of work?

A valid critique of the EMP analysis would  focus on its failure to include billions of dollars in economic benefits and avoided costs of dirty coal power and global warming, which should be right up Martin’s alley as DEP Commissioner. But he is silent on these flaws because they make a stronger case for efficiency and renewables, while his objective is to gut those policies for short term economic rewards to the business community.

Martin is simply taking cheap shots by using after the fact economic conditions (i.e. dramatic drop in oil and gas prices; economic recession; reduced demand).

Martin’s severe criticism shows he’s not only a political cheap shot artist, but that he  knows nothing about economic modeling, sensitivity analysis, scenario testing, or the role of models in planning. As the EMP itself explained, models are not precise and uncertainties are inherent in the modeling exercise:

 

In short, the Energy Master Plan must explicitly deal with uncertainty and the prospect that things will turn out differently from what was assumed. This often gets lost in the discussions as modeling is frequently assumed to be a forecasting effort with definite outcomes. The data and modeling assumptions have associated ranges of uncertainties. Even in situations in which one would think the range of uncertainty should be small, e.g., the cost of a combustion turbine, they can be surprisingly large. These uncertainties need to be considered when evaluating calculations. Although models calculate numbers to a precise value, this “precision” is a programming artifact and must be understood as such. What also should be kept in mind is that the range of uncertainty varies with specific assumptions. The uncertainty in the cost of a combustion turbine is smaller than the uncertainty of the cost of off-shore wind, which is in turn smaller than the uncertainty associated with the cost of a new nuclear power plant.

   A primary driver for the current modeling draft calculations is the assumptions about the cost and magnitude of energy efficiency and demand response for electricity and natural gas. If one assumes that energy efficiency and demand response are cost-effective (which numerous studies have concluded) and that state policies can successfully influence energy efficiency and demand response, then one does not need modeling to conclude that energy bills will decrease, environmental impacts will be lessened, and the New Jersey economy will not be harmed. The modeling provides the order of magnitude, confirms the intuition, and helps target policies that can help to make these outcomes more likely. Thus, the preliminary calculations to date reflect the assumptions that they are based upon.

Here are the details, for Mr. Martin’s edification (and I question whether he has even read the EMP and reviewed the modeling):

(see above link):

http://www.wolfenotes.com/2010…

How much would a new nuclear plant cost?

The New Jersey draft Energy Master Plan calls for serious consideration of a new nuclear reactor, and we discussed the pros and cons in Is it time to go nuclear in New Jersey?. Some excellent points against nuclear were made there, though I myself was favorable to a new reactor, but I am very concerned by this nuclear  power article in Salon.com. It argues that the costs of a nuclear plant have sky-rocketed in recent years. NJ’s draft EMP estimates the minimum to maximum range of nuclear to be $1,700 to $3,700 per kiloWatt.  This may be way off: Recently, an Idaho proposal was abandoned as not being “reasonably priced,” while in North Carolina the costs of a new plant are suddenly secret:

In fact, back in February, Duke Energy CEO Jim Rogers told state regulators the plant would cost $6 billion to $8 billion, but a mere two months later said that estimate was “dated and inaccurate.” Scott wondered, “If the cost wasn’t confidential in February, how is it confidential in April?”

Let’s take a look at one more example. Earlier this year, Progress Energy informed state regulators that the twin 1,100-megawatt plants it intends to build in Florida would cost $14 billion, which “triples estimates the utility offered little more than a year ago.” That would be more than $6,400 a kilowatt. But wait, that’s not all. As reported by the St. Petersburg Times, “The utility said its 200 mile, 10-county transmission project will cost $3-billion more.” If we factor that cost in, the price would be $7,700 a kilowatt.

This moves nuclear up to the (very high) cost of Solar, as estimated in the draft EMP. The Salon author is Joseph Romm, who certainly has impressive credentials, and his website is Climate Progress.

On the basis of these recent experiences with nuclear, I am very concerned that New Jersey may be looking at a white elephant.

What do you think?

Is it time to go Nuclear in New Jersey?

Last week saw the release of the Draft Energy Master Plan, and it’s full of interesting information about New Jersey’s energy problems.  Personally, having grown up in the anti-nuclear era, I’m always surprised to realize how important nuclear power is:  Our four nuclear power plants generated 32,600 Gigawatt-hours, while the total energy sales in New Jersey were only 82,000 GWh.  40% is nothing to snear at.   On the other hand, nuclear is only 21% of the generating capacity.  During periods of low energy demand, nuclear provides most of our needs.  During period of peak demand — when air conditioning and factories are going full blast — we’re dependent on the most expensive power — typically imported electricity from fossil fuels:  We’re getting hammered by the increases in coal and natural gas prices, and this is not just a burden on our home bills.  Governor Corzine says that surveys show that “high energy costs weigh against decisions to locate, retain, or expand businesses here.”