Should New Jersey divert millions of dollars that are earmarked for battling climate change to help residents pay for their soaring electricity bills? That's the debate taking place in the Garden State, where a showdown is brewing over the best way to use more than $500 million in Regional Greenhouse Gas Initiative funds.
The regional pact aims to cap and reduce carbon dioxide emissions from the power sector. Electricity generators purchase carbon dioxide "allowances," which are then divided among the participating states.
The money is typically invested in projects that "reduce greenhouse gases, mitigate climate change, and benefit stakeholders." Prior approved uses of the funds have included replanting trees in Newark and Atlantic City, protecting a coastal marsh in Brick Township, and restoring a forest in Princeton.
And that's where the controversy begins.
The Sherill administration has pitched a plan to use more than $500 million in Regional Greenhouse Gas Initiative (RGGI) funds for "ratepayer relief" instead.
The budget that Gov. Mikie Sherrill signed in June includes an amendment allowing up to $500 million of roughly $534 million in the state fund to go to short-term relief, according to Doug O'Malley, director of Environment New Jersey.
Speaking with NJ Advance Media, he said the money is "critical" for powering clean energy projects across the state.
"Yes, you'd be paying less on your monthly bill, but in the long term your monthly bill will be higher," O'Malley said.
The idea of dipping into the state's RGGI account also fell flat with Alex Ambrose, a senior policy analyst with nonpartisan think tank New Jersey Policy Perspective.
"Diverting money out of the clean energy funds to pay for short-term solutions won't do anything for long-term affordability," Ambrose reported in a press statement, arguing that the Sherrill administration should funnel the RGGI money into "what it's meant to be used for" – solutions like energy efficiency and energy storage – which would bring down electricity costs for everyone.
"New Jersey has raided these funds before and, every time it does, it delays the investments that would actually make energy affordable in the long term," Ambrose said.
LOWERING UTILITY BILLS IN NJ
Energy affordability was a key part of Sherrill's governor campaign last year.
Since taking office, the former U.S. congresswoman has made several moves to lower bills for New Jersey residents, including freezing rate hikes, lifting a four-decade ban on building nuclear power plants, and pursuing more clean energy such as solar and battery storage.
The governor has also signed legislation and made policy decisions to regulate AI data centers, which she said are "among the biggest drivers of energy costs" in the state.
The plan has also included dipping into the RGGI funds, which state officials hinted at earlier this year.
In February, three major state agencies – the Department of Environmental Protection (DEP), New Jersey Board of Public Utilities (BPU), and New Jersey Economic Development Authority (EDA) – issued a joint statement about potentially using RGGI funds for ratepayer relief.
The three agencies said they are following Gov. Sherrill's lead in an effort to tackle energy costs – including her executive order about rate hikes:
"Our agencies recognize that the current cost of electricity has reached the point of crisis for many residents and that from June 2023 to June 2025 the average residential electricity price in the state rose by well over 33 percent and that prices are expected to continue to rise. We also recognize that these increased rates are among the highest in the nation and that many of New Jersey's low- and middle-income families struggle to afford basic necessities, including electricity, which is a critical resource for the health, safety, welfare and prosperity of New Jerseyans."
The BPU said it will use available uncommitted and future RGGI proceeds to offset bill increases stemming from the rise in the price of electricity, especially for vulnerable families struggling to make ends meet.
"Similarly, the DEP and EDA are actively assessing potential approaches related to energy affordability and generation that align with existing statutory parameters for the use of RGGI funds," the agencies reported.
The DEP issued an update on Aug. 7, noting that a public hearing is planned in early October to present an action plan on the proposal, which will be published in the New Jersey Register in September.
Sherrill's moves on energy affordability continued this week when she signed the Garden State Balcony Solar Act. According to the governor's office, the new law removes unnecessary "red tape" that will allow New Jerseyans to purchase and use portable, plug-in solar panels to generate their own clean energy – and lower their electricity costs.
Several environmental advocacy groups applauded the move, including the New Jersey League of Conservation Voters, Environment New Jersey, the Vote Solar Action Fund (Mid-Atlantic), and Permit Power.
Meanwhile, Republican lawmakers have proposed their own ways of lowering energy costs for New Jersey residents, including Sen. Anthony Bucco, who recently suggested that the state should withdraw from the Regional Greenhouse Gas Initiative.
Senate Republicans have also introduced a bill that would temporarily suspend the sales and use tax, as well as the Societal Benefits charge on electric and gas bills in New Jersey.
"Ending New Jersey's decades-old moratorium on nuclear power plants was a step in the right direction, but more needs to be done to actually bring energy costs down," Bucco said.
"I've heard from concerned constituents in my district, and the dollar amount that people are paying on their monthly bills is not decreasing," the senator added. "That is a clear sign that the current policy of freezing electricity rates is not working."
Assembly Republicans have also put forth some suggestions for lowering electric prices in New Jersey, claiming that the solution is simple: "build more energy, faster." This includes expanding natural gas and developing fusion technology.
Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site.
Sign up for free local newsletters and alerts for the
Newark Patch
Patch.com is the nationwide leader in hyperlocal news.
Visit Patch.com to find your town today.