A controversial regulation that would require the electrification of all boilers beginning in 2025 was dropped this week from the New Jersey Department of Environmental Protection’s PACT rules — a move applauded by the slew of business and labor organizations that opposed it.
The Protecting Against Climate Threats regulations guide the state’s Energy Master Plan. The boiler provision was immediately panned by such groups following its December 2021 introduction, with opponents citing enormous costs and the burden on carbon footprint.
In September, a coalition of these groups called on legislative leaders to pause the regulation until its costs and impacts could be fully assessed.
“After an outcry from businesses, nonprofits, and unions, we were heartened to see NJDEP remove the recent regulations [for] the costly boiler electrification requirement, which would have cost schools districts, municipalities, and businesses $2 million for each boiler,” said Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey. “However, our concerns still remain that the Governor’s Energy Master Plan ultimately mandates all commercial buildings and residential homes be converted to electric, despite the astronomical price tag and strain on our already fragile electric grid.”
NJBIZ Conversations
Eric DeGesero of Fuel Merchants Association of New Jersey sat down with NJBIZ to discuss the Energy Master Plan, how the governor should go about fighting climate change and more. Click here to read – or watch – the conversation.
DeGesero has been one of the key voices leading the coalition’s efforts to remove the mandate.
The New Jersey Business & Industry Association (NJBIA) also welcomed the move. In a statement, NJBIA Deputy Chief Government Affairs Officer Ray Cantor described the decision as “both appropriate and appreciated.”
“Cost estimates to replace a 1.5 MMBTU gas boiler with an electric boiler begin at an estimated $2 million, when including the retrofitting of the building and conversion of the electrical system,” said Cantor. “There are approximately 1,500 apartment buildings; 1,500 K-12 public schools; 1,200 commercial, industrial and manufacturing facilities; 195 county government buildings; and 143 auto body shops, in addition to religious facilities and other buildings that would have been impacted by this provision.”
A dodged bullet
Both DeGesero and Cantor stressed that they are not opposed to clean energy, but have concerns about the current path to get there.
“While we all support the goal of clean energy, New Jersey businesses and families deserve policies that incentivize and support a clean energy transition, rather than mandate only one energy source,” said DeGesero.
“NJBIA maintains our concerns about the costs and feasibility of an all-electrification policy that continues to be a mandate of the Murphy Administration,” said Cantor. “Clean energy cannot realistically be a single-source proposition.”
They each expressed hope that the Legislature would consider Senate Bill 2671/Assembly Bill 3935, which requires a thorough review of the cost and efficacy of an electrification-only policy and legislative authorization before it is mandated.
In a statement on behalf of Senate Republicans, state Sen. Anthony Bucco, R-25th District, said that business owners, renters, school districts and local governments dodged a bullet they could not afford.
“Gov. [Phil] Murphy’s plan to force the replacement of efficient, clean, and cost-effective gas boilers with electric versions short-circuited because it didn’t make any sense,” said Bucco. “His plan would have required thousands of businesses, schools, apartment complexes, and government buildings to pay millions each to convert to electric boilers that cost four times as much to operate as existing gas boilers. It would have been a massive and unnecessary cost for both businesses and taxpayers.”
Bucco added that this is a victory, for now.
“But we need to make sure this proposal isn’t resurrected in the future,” said Bucco. “We’ll keep fighting to ensure that the other provisions of Gov. Murphy’s Energy Master Plan, which would result in tens of thousands of dollars of unnecessary costs for families and homeowners are removed as well.”
“DEP will continue to stakeholder the boiler issue as part of our second round of PACT Climate Pollutant Reduction initiatives to ensure that the eventual regulation of boilers achieves a reduction in greenhouse gas emissions at a reasonable cost,” NJDEP told NJBIZ in a statement
The boiler electrification issue was discussed at-length during an October NJBIZ Energy Panel Discussion.
Editor’s note: This story was updated at 4:45 p.m. ET Dec. 9 to include a statement from NJDEP.
