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Bill Opponents Argue that Renewable Natural Gas Is a Poor Investment that Could Lead to Price Increases

Some environmental advocates warn that a new law currently being considered in Trenton might imply even greater prices for the millions of New Jersey residents who have already seen energy rates increase by as much as 25%.

Last week, a bill (A-577) that would increase the use of renewable natural gas in the state’s effort to achieve 100% clean energy by 2050 was unanimously approved by the Assembly Telecommunications and Utilities Committee.

The measure is bipartisan and would put the onus on the state’s Board of Public Utilities to establish a renewable natural gas programme. If passed, it will let public gas utilities to charge customers for the cost of upgrading their pipelines and other infrastructure so that they can offer renewable natural gas and hydrogen.

It was argued that such a system would force ratepayers to spend billions more to support a sector of the economy that the state has made clear it wishes to rely on less.

Although some environmentalists dispute this, the United States Department of Energy claims that renewable natural gas, which is a biogas that has been treated “to purity standards,” could provide a cleaner means of generating energy and heat than regular natural gas.

Those in favour of the bill point to its potential to help New Jersey meet its greater aim of switching to greener energy sources in the face of climate change by providing an additional option for diversifying the state’s energy resources and powering residences. However, proponents of the bill argue that it will reduce energy efficiency and will lead to higher energy prices across the state if it passes.

Renewable natural gas is a bad investment and could mean higher rates, bill opponents say

Director of the New Jersey Division of Rate Counsel Brian Lipman wrote a letter of opposition to the bill to the Assembly Telecommunications and Utilities Committee before last week’s hearing. The Division of Rate Counsel is a state agency that advocates for ratepayers but operates independently of the BPU. Speaking for the Division of Rate Council, Robyn Roberts noted that the letter was not discussed during the meeting.

A BPU representative said the agency does not discuss pending legislation. “This law… usurps the power of the (state) Board of Public Utilities to control rates, which undermines protections for ratepayers. Furthermore, renewable natural gas’s societal benefits and safety are debatable,” Lipman wrote in a letter dated December 2 and acquired by NJ Advance Media.

Later in the letter, Lipman explains that replacing natural gas supplies to buildings in New Jersey with renewable gas would cost around $1.1 million per year until 2050, claiming that this is a much higher cost than switching to electricity.

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Some supporters have cautioned Governor Phil Murphy that he is in danger of missing the Garden State’s green energy goals of 50% clean energy by 2030 and 100% clean energy by 2050, both of which are outlined in his master plan. In 2020, the Democratic governor enacted an environmental justice bill to shield vulnerable areas from pollution.

When asked about the opposition to the measure from groups including the New Jersey chapter of the Sierra Club, the New Jersey League of Conservation Voters, Food & Water Watch New Jersey, and other local non-profits, state lawmakers stated they would continue to solicit public opinion.

Assemblyman Robert Karabinchak (D-18), the primary bill sponsor, told NJ Advance Media, “We are committed to a sustainable environmental future in New Jersey and renewable natural gas presents an opportunity to reduce carbon pollution in our state as we work diligently to build up our electrification capabilities.” “We will keep working on a balanced law with input from stakeholders that can successfully meet our environmental and economic goals.”

Cecilia Williams, the Assembly Speaker’s (D-Middlesex) spokesman, indicated that “no timetable has been decided” for the next hearing on the bill.

There are no upcoming meetings of the Assembly Environment and Solid Waste Committee, to which the bill was referred, as of Wednesday.

The New Jersey Business & Industry Association has issued a statement voicing its support for the bill.

Renewable natural gas is a bad investment and could mean higher rates, bill opponents say

To minimise our impact on the environment, we support exploring all viable energy options. “Renewable natural gas and hydrogen are intriguing technologies that can help us get to net zero,” said Ray Cantor, vice president of government affairs at the NJBIA. The current administration’s push toward full electrification is not sustainable or cheap, in our opinion.

However, environmental activist Matt Smith has voiced doubts about the usefulness of renewable natural gas as a replacement for the gas that is now meeting the needs of New Jersey residents.

According to a research published in November 2021, “this misleading assumption flies in the face of the latest BPU analysis on gas,” which shows that New Jersey has enough natural gas capacity out to 2030, including handling loads on the worst winter days, Smith added.

This law will encourage, sustain, and inflate dirty gas in New Jersey, he said, and “working families just cannot afford it” in the face of the climate, public health, and energy affordability issues.

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The bill is introduced as lawmakers deliberate whether to remove investments in fossil fuel corporations from the state’s pension system, which is worth over $92 billion. Brent Johnson, a reporter for NJ Advance Media, also helped with this article.

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