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Brian Lehrer: Brian Lehrer on WNYC. Now, we continue our election series, 30 Issues in 30 Days. Issue number three: Who can stop the soaring cost of electricity in New Jersey? Since June 1st, according to the nonpartisan Regional Plan Association, the average residential customer in New Jersey has seen their monthly electricity bill increase about 17% to 20%, depending on which utility company serves them.

The candidates for governor, Republican Jack Ciattarelli and Democrat Mikie Sherrill, are both highlighting the issue and, no surprise, blaming each other, or at least each other's parties. We'll talk in a minute to Politico's New Jersey infrastructure reporter, Ry Rivard, and invite your calls and texts. Let's listen to the candidates a little bit first. They did address the issue in Sunday night's gubernatorial debate at Rider University. Because we have the luxury of time on this two-hour show, we're going to play the full exchange, which runs just under three minutes. It begins with the moderator posing the question.

Moderator: We're going to Michael. Michael is an alum of Rider University and from Lawrenceville. Michael, your question is going to Jack Ciattarelli.

Michael: The back-and-forth blame on electricity rates has grown a little tiresome. Frankly, I would like to hear a little more specifics because we all know that there are many factors that contribute to our rate increases. Without blaming each other, what specifically you're going to do to tackle things like the grid operator, state mandates, and other impacts that rise our costs.

Jack Ciattarelli: Michael, I don't think it's "blame" when you're giving facts, and here are the facts. When Phil Murphy took office, we were an electricity exporter. We produced more electricity than we needed. He shut down six different electricity generation plants. He put an unofficial moratorium on natural gas. He didn't expand our nuclear capabilities in South Jersey, zero carbon emissions. He didn't accelerate solar.

Talk to solar developers who want to use the rooftops of warehouses, which is prime real estate for solar arrays. Didn't accelerate that. What he did do is he bet it all on wind. Now, if he was from New Jersey, and anybody who's from New Jersey would know that the Jersey Shore is sacrosanct here in this state. Nobody wants wind farms off our Jersey Shore. Male, female, young and old, Republican, conservative, liberal, for different reasons.

What I've said all along is I'll reopen and repurpose the plants. We'll expand our nuclear footprint in South Jersey. We will accelerate solar on the rooftops of our warehouses. We're pulling out of the Regional Greenhouse Gas Initiative. That carbon tax initiative has been a failure. Air is no cleaner. Electricity is only more expensive. We're not sending ratepayer dollars to other states. By pulling out of RGGI, we can save $500 million a year for ratepayers.

[applause]

Mikie Sherrill: Thanks for the question. Anybody from New Jersey should know that this has been a long time in coming, and that too many people have added to the problem. Whether it's PJM, the grid operator, or FERC or BPU, whether it's President Trump rolling back some of the initiatives on solar or adding $250 per family to your energy bill, everybody at the table is at fault. They keep dumping the costs onto the ratepayer here in New Jersey.

That is why I'm freezing rate hikes on the ratepayer because, let's face it, some of our utility companies have made over $1 billion in profits, and yet our ratepayers are constantly suffering, so I'm going to freeze those rate hikes by declaring a state of emergency. I'm going to add massive amounts of power into the grid. Right now, we need to produce power here in our state because the market has been screwed up by PJM, and because Virginia has a million data centers, which are sucking all the power out of our market. We need to produce here, lower cost here, and stop putting the cost on the ratepayers of New Jersey.

Brian Lehrer: That, from Sunday night's debate, shows how the candidates are arguing they would be the better one for controlling electricity costs. Let's analyze the issue, including the forces in and out of politics that are creating the spike. With us now, Politico's Ry Rivard, who covers regional infrastructure. We invite your calls and texts, comments and questions. 212-433-WNYC, 212-433-9692. Thanks for helping us out with this, Ry. Welcome back to WNYC.

Ry Rivard: Thanks for having me.

Brian Lehrer: First, can you give us a little more detail about how much rates have actually been going up, and for whom?

Ry Rivard: Yes, all across New Jersey, we're part of a regional grid with 12 other states. New York is not one of those. New York listeners might be even less familiar than most people are with PJM, but it's this energy market that manages the physical infrastructure, as well as the energy market, the supplies, the power that goes across that infrastructure for the whole region. Because of regional price increases and a need for electricity, as Ciattarelli pointed out, within New Jersey, market conditions have driven up prices by-- It's really like $25 a month on average.

If you have a hot summer, if you have a big house, that average could be meaningless to you. It could be much more. That was a political crisis that Democrats in the New Jersey legislature started seeing and reacting to very early this year when they released a flurry of bills trying to temper price increases. Democrats across the region, as well as some Republicans in other states, have been attacking PJM. There's this regional issue that's really manifested itself as a hot political issue because you're seeing these huge power bills for some people coming weeks, months before the election.

Brian Lehrer: Here's a little bit of a testimonial from one listener already in a text. Listener writes, "I'm a regular residential electric customer of New Jersey PSEG. My electric rates went up from 21¢ per kilowatt hour in December," already too high at 21¢, says this listener, "to 31¢ per kilowatt hour in July." That's a 50% increase. "A freeze on rates," as they continue with the commentary, "is too little, too late at this point. We need rate reductions, not a freeze, and stronger regulation on the utilities is needed. Offshore wind is a good thing," adds that listener.

Another listener writes, "We got to stop subsidizing data centers," and we will definitely get into the AI data centers as a factor here. Listeners, why don't you call in, too, and tell us, if you live in New Jersey, how your electricity rates have changed in the last year or so to give us and everybody who's listening a little bit more context and, for that matter, what you would like to see done. 212-433-WNYC, 212-433-9692, call or text.

Ry, the Regional Plan Association report that I mentioned cites three main causes for the rate increases. More demand, less supply, and rising energy costs globally. Let's take each of these briefly, if you can. Obviously, if supply is dwindling while demand is rising, that's a formula for higher prices in a market economy. Can you say to what degree the supply of energy is dwindling in New Jersey and why?

Ry Rivard: It depends on where you put the focus. If you look just within the borders of New Jersey, Jack Ciattarelli has quite a point. Governor Phil Murphy, who is a Democrat, bet a lot of the energy's future on offshore wind and for a variety of reasons. Market forces that hurt the wind industry, and then the Trump administration that killed what was left of it in New Jersey, at least for now, offshore wind was not a good bet. That means that the hopes for new generation that Murphy had over the past eight years are largely fruitless.

That is a point that Ciattarelli is handing [sound cut]. There are some things that are just largely beyond New Jersey's control that Mikie Sherrill talked about. The rising demand for data centers in places like Virginia. It affects the regional supply and demand across this 13-state region, this market that we share. I think she would say also that PJM has had this complicated permitting process for approving new generation that has, environmentalists have long argued, disadvantaged clean energy.

That is another regional issue that has contributed to the problem that she is correct about. Both of them are talking past each other. Ciattarelli says, "Nobody's ever heard of PJM. Don't blame them for your problems." Sherrill is saying, "Well, New Jersey would be able to do more." Sherrill and other Democrats would say, "New Jersey would be able to do more even if the offshore wind industry wasn't doing so well if PJM was reformed," which is something that governors from across the region held a meeting about earlier this week in Philadelphia.

That's one of the big fights over supply and demand. Demand is definitely going up, and supply is definitely not keeping pace. It's a regional issue as well as a New Jersey issue. When Jack talks about nuclear, I think people have come around to nuclear. It's just very hard to permit in this country as anybody listening knows. We haven't had a new nuclear power plant in a long time.

Brian Lehrer: Well, let's go down a few of the other talking points that we heard from each candidate in the debate clip. Ciattarelli started by blaming Governor Murphy for some of this, saying Murphy shut down six different electricity-generating plants. Did Governor Murphy do that?

Ry Rivard: There were some plants that went offline, and there were some plants that were not approved. I haven't gone through Jack's entire list and lined it up, but there was definitely a turn against natural gas. There was a coal plant that came down. I don't really know that a lot of people are talking about, "We need new coal," at least not in the Northeast.

I think there's definitely been a turn against fossil fuels. The governor, though, has this clean energy plan where he wants 100% clean energy by 2035, which is another thing that Republicans have attacked in New Jersey. That has some sort of caveats. You can use renewable energy credits, where you buy a credit for clean energy that's generated outside of New Jersey.

You match it up to actual energy that's generated from natural gas in New Jersey, and you say it's all clean. There's been some polling by environmental groups that find when you talk about how 100% clean energy doesn't exactly mean 100% clean energy. It doesn't mean turning off all the natural gas plants, that the issue polls better. That's part of the swirl of dialogue, too.

Brian Lehrer: Ciattarelli said in the clip that Murphy did not expand the state's nuclear capabilities or accelerate solar. I think it's true that he didn't expand the state's nuclear capabilities, but did he fail to accelerate solar, which I would think would be a priority of Phil Murphy?

Ry Rivard: During the Murphy administration, just on nuclear for a second, there was a very controversial fee. It was about $300 million a year for New Jersey customers to keep the nuclear plants that we do have open. That's one thing that happened. That fee has gone away because of federal policies that keep those plants alive. On solar--

Brian Lehrer: I'm not sure. Just to clarify for me and the listeners, does that mean that the nuclear plants that currently exist in New Jersey are less likely to be able to keep operating, or the opposite?

Ry Rivard: No, no, no, no, no, the opposite. There was a state-level policy that was meant to keep them open, and that kept them open. Now, there's federal price supports that keep them open. There's been a transition from paying the bill, but that was to keep the nuclear plants open. While Murphy didn't add new nuclear energy, there were policies during his administration. It's controversial.

Brian Lehrer: Yes, that supported nuclear plants that exist now.

Ry Rivard: Exactly, exactly.

Brian Lehrer: On solar?

Ry Rivard: It's expensive to do solar. There's about 5 gigawatts of solar in New Jersey. It depends on how you want to look at it. I was at a press conference where the Board of Public Utilities was celebrating that. It's also relatively small, but New Jersey lacks some of the things that other states have. California has large swaths of desert, where you could put solar.

It's controversial, but there's been a tension between large-scale solar development and farmland, for instance, because you don't have a lot of land to put the solar on. The land that you do have is farmland, and New Jersey is the Garden State. There's been other fights within the, "Is solar happening quickly enough?" That meant it hasn't happened as quickly as it could in other states where there aren't these sensitivities, so it's relative.

Brian Lehrer: Is Ciattarelli proposing to expand the use of solar in New Jersey if he's criticizing Murphy for not? President Trump these days does not talk well of solar energy. It's not a Republican priority, but is Ciattarelli different from that at the state level if he's elected?

Ry Rivard: He's talked about an all-of-the-above energy approach that includes solar, nuclear, and natural gas.

Brian Lehrer: One more Ciattarelli point, and then we'll go on to Sherrill's from the debate. He proposes to withdraw New Jersey from this multi-state compact that you mentioned, called the Regional Greenhouse Gas Initiative. As you say, that doesn't include New York but does include some other northeast states. Ciattarelli said their carbon tax initiative has been a failure. Is there a carbon tax in New Jersey, per se?

Ry Rivard: There's a regional cap-and-trade program that New Jersey participates in. Sort of, yes. We get allowances, and then we get money back. It's a complicated regional system that Christie pulled us out of, Murphy put us back in, some states go in and out of participating.

Brian Lehrer: Leslie in West Orange is going to talk about their energy bills. Hi, Leslie.

Leslie: Hi. Good day. A couple of things. We live in Essex County, New Jersey. Our electric rate went from 19¢-plus a kilowatt to 30¢. I think it's a lot more than what I'm hearing. Secondly, when RGGI started and we went into the SREC environment--

Brian Lehrer: RGGI is that regional consortium.

Leslie: Hello?

Brian Lehrer: Yes, go ahead. I'm just clarifying.

Leslie: Can you hear me?

Brian Lehrer: Yes, I'm just trying to clarify the acronyms for the rest of the listeners, but go ahead.

Leslie: I'm sorry. What?

Brian Lehrer: Go ahead, Leslie.

Leslie: Can you hear me?

Brian Lehrer: Yes, you can continue.

Leslie: I'm sorry. At the time, the SRECs created an economic environment that really throttled up the development of solar. Then part of the deal was that utilities were required to increase their renewable energy sourcing by 2% a year, then Christie took us out of that. When you mentioned Murphy put us back into RGGI, did it also bring back the 2% mandate a year of increased renewables? Thirdly, how much of a negative effect has the withdrawal of the credits from the Trump administration impacted us? Thanks.

Brian Lehrer: Thank you, Leslie. Pick any one of those questions to answer.

Ry Rivard: She's talking about solar. That's the SREC program. An interesting tension that you've seen is if you have solar on your roof, you're benefiting from it. Anybody with a single-family house has this benefit. I think New Jersey policymakers have struggled because the subsidies for solar at first were quite generous and some would say exorbitant. They've been reined in, and people couldn't always benefit from them if you didn't have, for instance, a single-family home where you could have rooftop solar.

That's changing now as they have larger solar projects. They're trying to find places to put them, landfills, rooftops. They've also come up with programs like community solar, where people who don't necessarily own a home can take advantage and get a stake or benefit in the reduced cost from solar energy. That's been something that's happened where an individual homeowner will care about the SREC price, but a lot of people who live in an urban environment don't even know what that is. That's one thing to think about.

Then the other thing is there has been, as she pointed out, a gradual rationing up of the need for renewable energy with Murphy wanting this "100% clean energy by 2035" goal and Republicans saying, "Well, that's part of our problem. If we had an all-of-the-above, we could let market forces decide what we want." Sherrill has adopted this 2035 goal. She thinks renewable energy prices-- anybody who's listening who's familiar with Bill McKibben and his arguments around solar know that these prices have come down and thinks that that is going to beat the curve of a mixed bundle of things that include fossil fuels.

Brian Lehrer: Bill McKibben, coincidentally, is going to be a guest on the show later in the week. We're getting a number of testimonials from New Jerseyans, who have solar on their roofs on single-family homes, as you say, where it's the easiest to apply. One listener writes, "I haven't had a utility bill or negative bills since May." I guess that's when they put it on-- Oh, no, I'm sorry. I'm being unclear.

This listener says, "13 years ago, I installed rooftop solar on my residence. I was not completely sold on the benefits. Turned out I was wrong about the benefits, and they are real. I haven't had a utility bill or a negative bill since May. I think the gubernatorial candidates should demand that data centers in New Jersey and possibly warehouses install rooftop solar systems with battery backups to reduce the power demand on the grid by these data centers." Do the two candidates, Ry, have different approaches to the data centers?

Ry Rivard: I think if you look at what they're doing with PJM, that's one of the main things that Sherrill is talking about. One of the main issues within PJM right now is how to cope with rising demand from data centers. It's become an issue where local electeds, including statewide officials, the governor, for instance, have tried to have more influence over regional policy because we share supply and demand across the region.

Brian Lehrer: Across state lines. I'll note that Sherrill mentioned the data centers as an issue in her response in the debate. Ciattarelli did not.

Ry Rivard: There is some legislation to try and force data centers to bring their own power in New Jersey. That's been an issue at a regional level, too. The counter to that, which Republicans have pointed out, is if you're a state that makes data centers bring their own power, whereas other states don't, you're disadvantaging the development of an AI industry in your state, potentially. That's been the lineup that I've seen when they're head-on-head on policy is do it at a regional level or do it at a state level to try and figure out the data center demand.

Brian Lehrer: Last thing. We went down the Ciattarelli points from the debate clip earlier. We've touched now on a few of the Sherrill ones. The last Sherrill one, the biggest one, she's running ads to this effect. She proposes to freeze rates in an emergency executive order if she's elected governor. Can a governor even do that, and what do people say are the pros or the cons?

Ry Rivard: Obviously, it's good politics, but it would be difficult, I think, and legally questionable to make into real policy. How she does it matters a bit, too. One of the things that Murphy has done is take money that's been collected already from utility customers that's already in the budget, and use that to cushion the rate increases that took effect earlier this year. In that way, you see the rates technically going up, but not really going up on your bill because you're providing subsidies. That's one way to do it.

The other way to actually force utilities to not increase costs, we've seen that a national push to cut into utility profits, known as their rate of return or return on equity. If you did that in New Jersey, though, not to talk about PJM again, because it is an acronym that most people are not familiar with. In New Jersey, the utility companies themselves, PSE&G, for instance, is not in charge of the supply of power.

You could tell PJM, "You cannot raise power prices." Well, they don't actually control power prices. They control the cost of their own infrastructure. They get their money from when they build a new transmission line, from when they upgrade their distribution system, their substations. They get a return on that. You would then have to be able to freeze, if you wanted to freeze utility rates. Find some way to freeze this massive regional market.

I'm not sure how you can do that. The thing, ironically, that Sherrill has been talking about most as the villain in the price increase battle, PJM, and this regional energy market is the thing she has least control over. It's good politics. There are ways to cushion and to essentially, effectively freeze by providing subsidies. There's ways to lower the infrastructure-related costs of delivering electricity. How you freeze this market in its tracks, I don't know. That doesn't mean it can't be done. I just don't know.

Brian Lehrer: Folks, that's where we will leave it in our 30 Issues in 30 Days election series. Issue number three: Who can stop the soaring cost of electricity in New Jersey? We thank Politico's Ry Rivard, who covers regional infrastructure. Ry, thank you very much.

Ry Rivard: Thank you.

Brian Lehrer: Coming up tomorrow, issue number four. We're going to stay in New Jersey to ask who can control spiking housing costs. That's coming up tomorrow.

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