A new study by the Beacon Hill Institute represents a stinging indictment of energy policy in New Jersey.
Like many other states, New Jersey has adopted an RPS, or Renewable Portfolio Standard, calling for a specific percentage of the State’s energy mix to come from sources such as wind and solar. Part of the State’s overall Energy Master Plan (most recently updated in 2011 under Gov. Christie), New Jersey’s RPS calls for a “renewable energy portfolio standard of 22.5% of energy from renewable sources by 2021.” To put this in perspective, as of December, 2012 less than 3% of the State’s energy mix came from renewable sources, making New Jersey’s goal one of the nation’s most aggressive.
Renewable sources like solar and wind share two negative characteristics: 1) they are far more expensive than traditional sources, particularly natural gas, and 2) they are notoriously intermittent/unreliable. Since solar and wind do not continually produce energy, traditional sources are needed to back them up, adding to their already higher costs while also destabilizing the grid.
It goes without saying that if New Jersey managed to reach this goal, our economy and job creation would suffer due to inflated energy costs–and now, thanks to Beacon Hill’s analysis, we have the numbers to back this up. Via the BHI report:
- The current RPS law will raise the cost of electricity by an expected $1.05 billion for the state’s consumers in 2021
- New Jersey’s electricity prices will rise by an expected 10.92 percent by 2021.
In 2021, the RPS is expected to:
- Lower employment by 11,365 jobs
- Reduce real disposable income by $1.4 billion
- Decrease investment by $199 million
- Increase the average household electricity bill by $95 per year; commercial businesses by an expected $85 per year; and industrial businesses by an expected $8,745 per year.
The only saving grace for New Jersey ratepayers is the State is unlikely to reach its arbitrary 22.5% goal. A project to generate 1,100 Mwh of offshore wind power, for example, has been consistently blocked because, without enormous subsidies, it cannot meet the benchmark of providing an economic benefit to the state.
Still, some of the more radical elements in the Legislature recently floated a proposal to set a new RPS target of 80% by 2050! If ever adopted, it might just be time to “turn out the lights” on New Jersey’s economy.