Trump’s tax bill will raise NJ’s high energy costs even higher, Murphy admin says

The tax-and-spending bill President Donald Trump signed into law July 4 will drive New Jersey residents’ already spiking energy bills even higher, according to energy experts and Gov. Phil Murphy’s administration.

The law increases U.S. reliance on fossil fuels like oil, coal and natural gas while gutting renewable energy initiatives, specifically around wind and solar. The administration claims that the “massive expansion of domestic oil and gas production capacity” will drive down consumer costs. But many experts disagree, and instead see this strategy as undermining efforts that would bring cheaper, cleaner energy online faster and help quell the growing need for more energy nationwide.

“The disastrous federal spending bill recently signed into law will only make energy more expensive for everyday New Jerseyans,” Murphy administration spokesperson Stella Porter told Gothamist.

New Jersey lawmakers appear determined to soften the blow for the state’s energy customers. At the end of June, the state Legislature passed a flurry of bills aimed at curtailing energy costs in the Garden State — and the governor is expected to sign each bill soon. But critics also say the state is making a misstep by diverting millions from its Clean Energy Fund to other initiatives.

“Every option to reduce energy costs is currently on the table,” Porter said.

For New Jerseyans, Washington's policy moves come as they saw their utility bills spike by as much as 20% due to increased energy demand coupled with a lack of new supply coming online. This summer’s increases are costing consumers on average an extra $28 per month in New Jersey.

Some energy experts agree that Trump’s bill will exacerbate the situation for New Jersey energy customers.

“Making clean energy or any other form of electricity generation more expensive or harder is going to raise prices for your consumers,” said Abe Silverman,  a research scholar at Johns Hopkins University working on energy issues.

Think tank Energy Innovations’ analysis of Trump’s bill said the legislation would increase utility bills by 5% in New Jersey over the next decade. Nonpartisan policy institute Center for American Progress wrote in its analysis that the bill would increase average annual electricity costs by $110 per U.S. household by 2026.

Rep. Thomas Kean Jr., a Republican from New Jersey who voted for Trump’s bill, disagreed. He called the legislation “a major win” for New Jerseyans that would “unleash” American energy production.

Silverman previously worked at the New Jersey Board of Public Utilities as the General Counsel and Executive Policy Counsel. He’s also previously been an attorney at the Federal Energy Regulatory Commission, the national regulator of the electric grid. He said an “all of the above” energy strategy that promotes, instead of hinders, renewables production is the way to lower prices quickly.

”Just like you have to have a balanced breakfast, you have to have a balanced electric grid,” he said.

But Silverman said Trump’s policies create “an incredible amount of uncertainty” for producers of wind, solar and battery storage systems, which use rechargeable batteries to store energy for later use.

“You are driving up prices and decreasing American economic competitiveness. It's very frustrating,” he said.

What policy moves New Jersey is making

One piece of legislation passed last month expands New Jersey’s community solar program, which allows renters and homeowners who can’t install their own solar panel systems to tap into solar nearby. Under the statute, the program is required to cut at least 15% from subscribers’ electricity bills. The legislation increased the state’s capacity 50%, from 2 gigawatts to 3 gigawatts, which is enough to power more than 500,000 homes.

State lawmakers also passed a “smart solar” permitting bill in June. That legislation is designed to cut through the red tape for residents who want to go solar at home and the companies doing those installations.

The Regional Plan Association, a nonprofit civic organization, released a report in February that found New Jersey had the third-slowest process for getting solar approvals over the line. The legislation calls for the state to establish an online hub to help make the process easier.

Lawmakers also sent a bill to Murphy’s desk that establishes a summer termination program designed to protect certain lower income utility customers from service shut offs during periods of extreme heat.

And the Legislature passed a bill that will mandate the Board of Public Utilities to study the effects of datacenters on electricity costs. According to the bill, this study would investigate whether the whopping use of electricity by data centers has unfairly affected other utility customers. The bill calls on the board to explore potential policy solutions like special tariffs for data centers.

But some clean energy advocates criticized another move made by New Jersey lawmakers last month. During negotiations for next year’s budget, state officials diverted $190 million from New Jersey's Clean Energy Fund to cover budget shortfalls in other spending areas. The diversion included $140 million for transit initiatives — double the $70 million that was moved from the fund to transit programs during the last fiscal year. In addition, $50 million from the fund was rerouted to the state’s general fund, which disburses state revenue for all other initiatives not tied to a specific fund.

“ It feels a little bit like talking out of both sides of your mouth to say that the state can continue to support and commit to clean energy despite what's going on at the federal level, and then to turn around and immediately divert the funding that is intended to do that,” said Elowyn Corby, Mid-Atlantic regional director for nonprofit advocacy group Vote Solar.

In response to the spikes that went into effect in June in New Jersey, the Murphy administration also announced that state’s utility providers agreed to a deferral program that would allow ratepayers to shave $60 off their bills this summer. However, those savings would need to be paid back later, under the deal.

New Jersey rolls out storage program

Another long-awaited clean energy program finally got underway in June. The state’s Board of Public Utilities kicked off phase one of its battery storage program, which has a goal of generating 2,000 megawatts of energy storage by 2030. It was enacted under the Clean Energy Act of 2018 and was supposed to start rolling out in 2021.

According to the board, during phase one of the program will include both large-scale grid infrastructure and smaller, localized energy storage solutions. The utility authority is aiming to procure 1,000 megawatts of storage by mid-2026.

Silverman noted that battery storage is a “relatively compact” form of infrastructure and said it will likely be quicker to roll out than other energy initiatives — like, for example, a new natural gas plant that can take five years or longer to build.

“Batteries are one of the few technologies that New Jersey can bring on in time to make an impact on this current price spike,” he said.