Written on: December 21, 2021 by Eric DeGesero
ICM: Eric, can you give us some background on the public policy climate in New Jersey as a relates to climate change and home heating?
ED: Just as with many other states in the Northeast, New Jersey is looking to move to zero-carbon energy by 2050 and that is something we’re fully on board with. The challenge and the concern is that New Jersey Governor Phil Murphy’s Energy Master Plan calls for eventually all electric generation to be done through renewables, primarily solar and wind. One aspect of the Energy Master Plan that he has not spoken about publicly calls for electrification of all space and water heating in the state. Nor has he discussed the cost, the exorbitant and unnecessary, almost irrational cost of doing that. The Governor is saying, “I want zero-carbon energy by 2050, and there’s only way you can achieve that and that is through electrification.” That, and only that, is the problem we have. If policy makers would just be willing to listen to us, our ideas are not actually that far apart. Of course, our pathway to zero carbon is through the rapid adoption of low carbon liquid fuels for space heating and hot water. You can achieve the policy objective of zero carbon without the significant infrastructure disruption of electrification. I am not talking about the big picture—distribution and transmission systems for electricity—but the disruption of the infrastructure of our individual homes and businesses. No one in officialdom has either a) any idea what it entails or b) if they do, they have been extremely disingenuous with the estimated costs.
ICM: If electrification becomes the policy, how will that affect the homeowner in cost?
ED: In New Jersey, 87% of homes are heated by a fossil fuel. The first challenge that a homeowner is going to have is the cost to convert their system to all-electric. Even if you have a forced air system or if you have an air conditioning system with a boiler, that still doesn’t mean that you can just drop in a heat pump for a $4,000–$7,000 one-time cost, which is what the Governor indicated in the draft Energy Master Plan. His cost assumption came from a study in Massachusetts that added heat pumps into rooms. That’s where they got the $7,000 cost, not the retrofit of the whole house, along with the installation of backup electric resistance. Just looking at the mechanical system itself, it’s actually going to cost well over $20,000. We get that number from research that has been done by Diversified Energy Specialists in New York and Massachusetts. An alarming thing about this $20,000 figure is that, in well over 90% of the instances of the homes in this research, homeowners kept their existing fossil fuel heating system as the backup. Therefore, that $20,000 number is understated because it didn’t go as far as what the New Jersey Energy Master Plan is calling for.
You are going to be using a lot more electricity. There is something that is being discussed called time-of-use pricing wherein you are going to pay different rates during the day based on when the energy company wants to disincentivize electric consumption. Peak hours are, generally speaking, late afternoon into early evening. When you need the electricity the most, it will be charged at the highest rate. The Governor, as of this discussion, has yet to provide a cost estimate on anything relative to the Energy Master Plan, except the one time $4k–$7k cost estimate for a home, which is absolutely wrong.
It isn’t just the Fuel Merchants of NJ that is opposed, it’s the air conditioning contractors, the plumbing organizations and the mechanical contractors. They are the people that are installing, servicing and maintaining systems and are unanimous in saying that this is a bad idea.
ICM: If you’re going to convert all of New Jersey to electric heating and cooling, that’s a lot of work. That’s a lot of jobs. Why are they against it?
ED: Great question. They’re against it because, in addition to being business owners or employees, they are also consumers and homeowners. They don’t want to have to do something that they know doesn’t work in the way the Governor says he wants. What we’re engaged in is not an anti-heat pump campaign in any way, shape or form. What we are engaged in is a campaign that opposes heat pumps as the one and only singular means to heat a home, requiring you to rip out your existing heating system to do it.
ICM: Even$4k–$7k is a lot of money for many homeowners, and in reality, it is going to be more like $20k–$30k. Is there a plan for subsidies?
ED: They says they are constantly evaluating costs, which is all nonsense. They are backtracking because they got called out on their nonsensical cost estimate. When everyone must throw in money to subsidize something, that’s called “higher cost of living—higher electric rates.” The frustrating thing is that most of the public and most of the State legislature was not aware of this until the Smart Heat NJ campaign (a comprehensive multimedia advocacy campaign from Fuel Merchants Association of NJ to educate consumers about the costs and consequences of the Energy Master Plan, specifically the expense) was launched to begin the process of educating the public and, by extension, the legislature.
Not only can the Governor implement the Master Energy Plan without legislative input, the process of writing the regulations to make this happen has begun. NJ legislature has a small window of opportunity to enter into the debate and that’s what we hope they will do—not just because it is hearing from trade organizations or trade unions, but hearing from the public as well.
Often when you engage in grassroots lobbying, a trade association will brief its members on the specifics of the issue and then engage policy makers in a letter-writing or email campaign and request meetings with legislators to educate them. This is too big, too complicated and too difficult to understand and there’s too many people in too short a period that need to be educated to move the needle.
This time around, we are lobbying in a way similar to that of big campaigns, using public relations and media settings. None of us has enough leverage to get the Governor to change his mind, so we need to get the legislature engaged and the only way to do that is to get the public engaged. The public should be concerned about the negative impact on them personally and they’re not even aware of the Governor’s policy.
ICM: Tell me about Smart Heat New Jersey and how you’re trying to get legislators on board.
ED: Smart Heat NJ is digital; it’s some television, it’s traditional marketing, media, and public relations all making the case that the mandatory wholesale removal of existing heating systems to be replaced with electric heat pumps is both prohibitively expensive and ineffective. I know we’re driving results because legislative offices are hearing from their constituents that this electrification plan is a bad idea, and they’re hearing that through the Smart Heat NJ campaign.
One thing I want to add is that legislators are consumers as well. Legislators own homes and have personal finances. They are hearing from their constituents and are also seeing the Smart Heat NJ ads on television or the billboards along three main toll roads—the New Jersey Turnpike, the Garden State Parkway and the Atlantic City Expressway. The message is out there. Legislators aren’t only hearing from their constituents; they’re seeing this as consumers of news and as consumers of home energy and home energy systems.
ICM: In addition to the Smart Heat NJ website, you’re also doing TV advertising, cable advertising, billboards and I heard you even had an airplane flyover at the Jersey Shore on Memorial Day weekend.
ED: In some instances, it’s an ad on your phone and in others, it’s Facebook and sometimes, yes, it’s an airplane pulling a banner up and down the Jersey shore.
ICM: When I speak with you, I hear real urgency in your voice.
ED: The real death knell that we face as an industry is a State-by-State process where the police power of the state says, “Here is how we’re going to do it and here’s the time line that we’re going to do it on.” Generally speaking, 2050 is the magic number. Some States require legislation, some States require regulation, which is what you’re going to see in New Jersey unless the legislature injects itself into the discussion.
ICM: If total electrification is not the answer, what do you consider the answer to be?
ED: We’ve had the answer for some time—renewable liquid heating fuel. It’s frustrating that we’re not further along than we currently are, but that doesn’t mean that we can’t be where we need to be in the time the policy makers want us to be there. The problem is that if we start using renewable liquid heating fuel now, we’re not going to be allowed to continue to do so. In a counterintuitive way, this policy is actually hindering the reduction of carbon emission, because we could be reducing carbon here and now. All we need to do is to fine tune what we’re doing to bring higher and higher blends of renewable fuels into the market. That message hasn’t been able to penetrate yet and hopefully the Smart Heat NJ initiative will at least allow the legislature to weigh in about whether or not it thinks renewable liquid heating fuel is a viable means forward.
If we can get the legislature on board, it is going to have to get engaged and help Governor Murphy to be willing to discuss moving forward in a different direction. More than anyone else, the legislature has many points of counterpressure it can put on the Governor.
ICM: You say that the legislature’s pressure on the governor is probably the only path to get this change in policy and you’ve had the Smart Heat NJ program in place since Labor Day 2021. What kind of response are you getting from NJ legislators?
ED: It’s the only path. I’ve been out and around the State talking to legislators and their staff and not only are they seeing the ads themselves, but they are hearing from their constituents. If you can get 40–60 constituents contacting a legislator, that legislator is going to pay attention. Senator Vin Gopal, a Democrat from Monmouth County, is a very strong supporter of progressive social issues and has supported every aspect of the Governor’s Energy Master Plan. He fully supports wind energy, solar energy and electrical vehicles, but said there is just a little too much here, it’s too big, and the legislature hasn’t been engaged enough to have a discussion on the Energy Master Plan. Our job is to work with Senator Gopal and other like-minded legislators from both parties. This is by no means a partisan issue at all. Quite honestly, in the past few weeks, I’ve been heartened by the support of Democrats—members of the Governor’s own party.
ICM: The Governor’s Energy Master Plan is already out, does it have teeth? I assume regulations must be made to implement the plan— what’s the time frame on that?
ED: The Energy Master Plan is nothing more than a than a wish-list document that could sit on a shelf somewhere and does not have teeth on its own. However, it’s a wish list of the one person that gets to set policy for the entire State. The Governor has the tools at his disposal to implement the electrification of the building sector through the Dept. of Community Affairs through building codes. The Northeast Energy Efficiency partnership (NEE) is in the beginning stages of coordinating stakeholder meetings to discuss having regulations in place by 2024–2025 to outlaw combustion. That doesn’t necessarily mean combustion will be outlawed by 2025, but regulations may be in place so that, on an equipment turnover, combustion may be outlawed by 2028 or 2030.
ICM: Could a new Governor just turn off the switch?
ED: They could, but once something is formally adopted, it’s much more difficult to undo. At the end of the day, if the legislature thinks electrification is a good idea and that the Governor is on the right path, we lose. At least then I will have had the satisfaction of knowing that our policymakers weighed in. Let’s agree to zero-carbon energy by 2050. Let’s give everybody a chance to build their own pathway to get there and to demonstrate what the benchmarks are on that pathway not just some ethereal dream, but a realistic way to get there. Then let’s work. Let’s put our energy and resources into the low carbon liquid fuels pathway because we can get to the goal for a lot less expense and possibly get it faster than retrofit electrification.
ICM: Readers of ICM are in the mechanical HVAC trades in New Jersey. What can they do to help support your message?
ED: Whether you’re an HVAC contractor or not, if you’re a homeowner concerned about unnecessary costs that aren’t going to achieve the objective of keeping you warm, you need to go to SmartHeatNJ.com, click the “Contact Your Legislators” button, populate your ZIP code and put your name in along with a short message. We have an auto populated message, but we encourage everyone to include their personal concerns with this plan.
The legislature needs to get engaged and the only way that will happen is if they hear from their constituents. All we’re asking is to let your voice be heard if you think retrofit electrification is a bad idea. ICM
