Q&A: New Jersey will be 'greener, greener, greener'
Washington, 26 February (Argus) — Joseph Fiordaliso is president of the New Jersey Board of Public Utilities (BPU). He has served as commissioner and in other roles at the BPU since 2005. In this interview, edited for length and clarity, Fiordaliso talks about how the BPU will implement the clean energy goals of governor Phil Murphy (D), including the goal to build 3,500MW of offshore wind by 2030.
Governor Murphy named you BPU president this month, and he campaigned on a strong clean energy platform. What are your immediate priorities on clean energy?
Well, advancing his agenda, obviously. I think the two executive orders he has signed really lay out his priorities. One is trying to get New Jersey back into the Regional Greenhouse Gas Initiative (RGGI). The other is Executive Order 8, on offshore wind.
The Clean Energy Program is going to see a much broader portfolio as we move forward. I think more and more renewable energy generation [is likely]. The governor wants to make New Jersey a national leader in offshore wind, and the BPU is the focal point of an awful lot of his initiatives. We have initiated here the development of a strategic plan, in coordination with commissioner [Catherine] McCabe from the New Jersey Department of Environmental Protection (DEP) among others.
We are committed to offshore wind. This initiative could help lower the price of electricity for New Jersey ratepayers, stabilize energy prices and certainly reduce greenhouse gases.
We also believe it will spur economic growth and development here in the state. Anything we can do to make New Jersey greener and greener and greener — in my opinion, and I think the opinion of the governor, too — is beneficial to minimizing the effects of climate change.
What might the effect of re-joining RGGI have on the state's utilities, and how would the BPU work to make this transition successful?
The lead agency on the RGGI front is the DEP. We will be working closely with them. As part of RGGI, New Jersey will be able to advance the goals of reducing greenhouse gas emissions and mitigating the impact of global climate change. It is extremely important that New Jersey be part of this regional initiative, and that we partner with neighboring states.
The state's electricity industry was restructured back in 1999, so the electric utilities no longer own generation assets in the state. Third-party electricity suppliers provide a large portion of our electric generation via competitive markets. As a result, the utilities are not expected to be impacted by the state re-joining RGGI. Instead, the competitive suppliers will be motivated to produce, or to procure, less carbon-intensive supplies, and will pass along the cost of compliance to their customers. So, I do not see any adverse bottom-line effect on our utilities here in the state. All I see are benefits from being part of RGGI.
Do the utilities see re-joining RGGI in a similar light?
We have not gotten any direct feedback from them yet. But we are talking about a lot of energy efficiency programs and things of that sort, which most of the utilities are on board with.
In solar, what will the BPU be doing to ensure that the solar renewable energy certificate (SREC) market doesn't crash this year, as some have warned? How likely is such an event, in your view?
I do not think that event is imminent, and I do not think there is a danger of it collapsing. And the reason I say that is very simple. I like to say that we gave birth to this industry here in New Jersey. We are not going to let it fail. We are going to ensure the fact that SREC prices maintain a reasonable economic viability in order to continue to grow solar in the state.
We are currently in a stakeholder process, trying to get information from the various stakeholders regarding the next step for the solar industry. We started out in the early 2000s with what was basically a grant program. Then, around 2007-08, we launched the SREC market. Now, I think we are going to see the next phase. But we are going to wait until our stakeholders have the opportunity to weigh in. This proceeding was actually initiated last fall and is ongoing. I am anxious to see what it will become. But in the meantime, we are not going to let the SREC market collapse.
What is your view on supporting nuclear power in New Jersey? What are the opportunities and costs of doing so? Would not supporting nuclear result in an "environmental, economic and public policy disaster," as PSEG president Ralph Izzo has said?
Almost 40pc of our energy is generated through nuclear power. I see it as a vibrant industry here in New Jersey. I think the state's ratepayers have been supporting nuclear plants through competitive energy markets since 1999. We do not anticipate that changing.
If documentation is provided that additional support is required to keep the plants afloat and to keep providing ratepayers with environmental attributes, we will be happy to review it. Like the SREC market, there has to be oversight. Being such a large part of our energy generation, nukes have to be part of the entire energy strategy, in my opinion.
What is the forward look on New Jersey's offshore wind goals? What are the first steps in executing Murphy's goal of reaching 3,500MW by 2030? How soon can stakeholders expect to see an offshore credit (OREC) system in place?
Well, there is a lot that has to happen before this occurs. The governor had set a very ambitious agenda regarding offshore wind. We are looking at 3,500MW by 2030.
I alluded to some of the things we have to do, according to Executive Order 8: initiate a strategic plan, which we are in the process of doing. We also have to have an OREC funding mechanism, which will require a rulemaking as well as stakeholder input.
The process for a rulemaking normally lasts about six months. We expect to begin to reach out to stakeholders on minimum requirements before formally proposing a rule, which will then be subject to public comments. These are areas which obviously have to be initiated, and we have already initiated the strategic plan group. I will be working closely with DEP commissioner McCabe and several other state agencies to establish an offshore wind plan.
This is a big deal. We want to make sure it is done right. It needs to not only benefit the environment but also the ratepayers in the state of New Jersey. I think we are going to see an exciting clean energy portfolio.
Governor Murphy is dedicated to making New Jersey the greenest state in the union. He has a very strong staff here at the BPU to provide the initiative necessary to achieve his goals.