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New Jersey Looks to Boost Renewable Energy, Cut Consumption with New Law

The New Jersey legislature is at work on a bill that would dramatically increase that state’s reliance on renewable energy to 80 percent while decreasing energy consumption by 30 percent. Both targets would be achieved by 2050. The bill in progress is the work of legislators, energy executives, lobbyists, and other stakeholders, who are concerned that the state is making little progress in reducing greenhouse gas emissions. New Jersey’s solar sector growth has slowed, and the state’s goal of building 1,100 megawatts of offshore wind power by 2020 is far behind schedule.

To address this problem, the “Renewable Energy Transition Act” would contain provisions to fundamentally change how energy markets work in New Jersey. The most contentious issue is decoupling. Decoupling is a rate mechanism that separates the utility’s fixed cost recovery for maintaining its system from the amount of electricity or gas it sells to customers. Instead, rates would be based on the total number of customers it serves. While the proposed bill does not yet include a provision for decoupling, experts argue that it’s the only way to persuade utilities to get customers to reduce energy usage, ensuring that savings for gas and electricity ratepayers will not hurt a power company’s bottom line.  On the other hand, there has been near unanimous agreement among all involved that reducing energy consumption is the best way to address global climate change. For New Jersey, the most densely populated state in the country, planning a more sustainable, pollution-free future is a critical choice.

Article by John Howell