FMA of NJ Challenges Feasibility, Affordability of Murphy Electrification Rules

TRENTON — At a virtual NJDEP hearing on rules mandating the electrification of boilers for commercial and industrial use, Eric DeGesero, Executive Vice President for the Fuel Merchants Association of New Jersey (FMA), questioned the feasibility of such a plan, as well as the cost to consumers and businesses. DeGesero also challenged the original cost estimates of Murphy’s electrification mandates for homeowners in the Energy Master Plan (EMP) and the EMP’s overall inconsistency with Governor Murphy’s new affordability agenda.

DeGesero stated in his testimony:

“The most important term in the proposed rule is one that unfortunately is undefined – ‘technically infeasible.’ Anything is technically feasible. The only limitation on the feasibility of anything is money.

Yesterday, the NJDEP issued a corrected version of the Economic Impact Statement, without changing as much as a semi-colon in the text of the proposed rule itself. The correction states that the operational cost to run buildings on electricity as opposed to natural gas is 4.2 to 4.9 times more. FMA’s analysis of the operational cost is largely in line with the NJDEP’s.

According to Energy Information Administration in 2018, it would be:

This is an important aspect of the operational cost, but by no means the only one. The Economic Impact Statement also does not take into account how many more BTUs at 400% more each building will consume when everything is electrified.

While the NJDEP is to be commended for correcting the record on one aspect of the operational cost in the economic impact statement, it isn’t the only correction that needs to be made.

The NJDEP’s analysis of the retrofit cost is missing one essential cost estimate – upgrade to the electrical service. Even the EMP recognized the likely need to upgrade an electrical service for the installation of a heat pump in a home.

Upgrading the electrical service to a building to power a 1.5 MMBTU boiler is more expensive than upgrading the service at a home, due to the need for utility feed, transformers, switch gear, and other expenses.

In light of this enormous cost that isn’t considered, the NJDEP should issue

another revision to the proposed economic impact statement taking this into account.

One cost not contemplated by the NJDEP is the increase that will be borne by tenants who can least afford it, many in older buildings in Newark, Jersey City, Paterson, Elizabeth and Camden. Whether it’s higher rent that will result from landlords remodeling their buildings or a tripling or quadrupling of electric bills, tenants will get socked.

Since the Murphy Administration has shown it can correct an error related to EMP costs, we suggest another revision.

On Sunday, the  Institute for Sustainable Development and International Relations – among the foremost proponents of building electrification – stated it would cost $78,000 US to retrofit a home for electric heat. This is four times the $20,000 estimate the Fuel Merchants have cited. And fourteen times the EMP estimate.

Eleven days ago in an interview with the Bergen Record Governor Murphy stated: “Affordability is not something that we just came up with last week. This has been something that we’ve been on from moment one. It’s possible, I think perhaps, that we’re emphasizing affordability and opportunity … maybe with brighter lights than we had been.”

The Governor has had many press conferences on all aspects of the EMP- wind, solar, wind manufacturing, EVs, but strangely never once has he shone those bright lights on his mandate for electric heat retrofits.

Is Governor Murphy’s deafening silence on the most intrusive and expensive aspect of his EMP because he, like DEP yesterday and ISDIR on Sunday, realizes that there is nothing affordable about his electrification retrofit mandate?”