The latest NJBIZ panel discussion featured a group of New Jersey leaders in business and government discussing the always/ever-important topic of energy.

Moderated by NJBIZ Chief Editor Jeffrey Kanige, the panel included:

• Christine Guhl-Sadovy, president, New Jersey Board of Public Utilities
• Tim Sullivan, CEO, New Jersey Economic Development Authority
• Kenneth Sheehan, counsel, Genova Burns, and co-chair of the New Jersey State Bar Association Renewable Energy, Cleantech, and Climate Change Committee for 2024-25

The discussion kicked off with a look at the state’s energy challenges and priorities – hitting on a number of key points during that segment regarding reliability and of course costs.

“Let’s talk a little bit about what goes into those costs,” said Kanige. “Christine, what are the factors that business owners need to be concerned about, when they tell Kenneth or they tell me, that they’re worried about costs? What do you hear when they say that? What do you think your response needs to be?”

“We are always prioritizing cost in all of the policy decision-making that we are doing,” said Guhl-Sadovy. “At the end of the day, people care about what their bill is – whether you’re a commercial customer, whether you’re a residential customer, your bill is what matters. And that’s the bottom line. And a significant portion of that is the cost of generation. As we see a tightening of the supply-and-demand delta between generation – we’re seeing cost increases. The way that New Jersey procures energy is through an auction. We saw the auction results higher this year.”

The NJBPU president continued that as projected demand increase, the cost associated with that generation has the potential to increase as well.

“The things that, I think, are important – not just for the business community, but all customers to note – are, there’s some ability to control those costs in the form of energy efficiency. And that helps to reduce demand,” Guhl-Sadovy explained. “It helps to bring bills down – but it also helps to reduce the generation demand that is necessary, and hopefully increases that supply-and-demand delta. So that we can stabilize energy costs.

“As we look at our long-term future and our carbon reduction and clean energy goals – we’re moving away from fossil fuels,” she continued. “And that has a long-term potential implication of stabilizing costs. Because fossil fuels are volatile. The costs are volatile. Events around the world, extreme weather – all of those things go into fossil fuel commodity prices. So, as we move off of fossil fuels, we are looking toward the stabilization of costs as we make those investments in the long-term.”

Replay: Energy Panel Discussion

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“And Tim, the costs – obviously, everyone needs to be concerned about them,” said Kanige. “I’m curious, though, you mentioned opportunities. Christine mentioned opportunities. And there do seem to be some opportunities there. There is a move now away from, as Christine said, fossil fuels – it’s a priority of the Murphy administration. I guess the question is, then, is the infrastructure that we have now adequate to get us to where we need to go? Not only to meet the clean energy goals, but also to bring costs down. It seems to me that the EDA must be involved in some of those kinds of efforts to shore up the infrastructure, to get the grid and generation and storage and everything up running.”

“What can you tell us about where those kinds of projects stand,” Kanige asked.

“It’s a great question,” said Sullivan. “And I think President Guhl-Sadovy hit the nail on the head on the demand side of the equation increasing – being one of the big challenges here. But that’s a high-class challenge. It’s a high-class problem, because the economy is growing. There’s more people living in Jersey. There’s more people doing business in New Jersey. There’s more small businesses than ever before – something that Gov. Murphy and our team are very proud of. That’s driving more demand for energy broadly – electricity specifically.”

The NJEDA chief said that as it relates to infrastructure improvements – the generation side has to be top of that list. “And offshore wind represents, by far, the biggest opportunity both on the energy side of the equation, which I defer to Christine on for her expertise. But certainly, on the economy and jobs side of the equation,” Sullivan explained. “You’re talking about tens of thousands of jobs to install these wind farms – thousands of jobs in manufacturing, thousands of jobs in operations and maintenance, overwhelmingly, by the way, in South Jersey; overwhelmingly union jobs.”

He said that represents an extraordinary opportunity.

“Both to sort of buttress our generation side – add more clean, renewable electrons to the grid,” said Sullivan. “But also, to create enormous economic opportunity and job creation up and down the state – but particularly in South Jersey.”

Kanige asked Sullivan if offshore wind was the main focus at this point.

“Given what’s going on offshore, there’s been a huge push, particularly as you say in South Jersey, to kind of bring those facilities online. Not only generation, but distribution and storage,” said Kanige. “There was a setback with Ørsted months ago. What does it look like now from your perspective?”

“Wind is probably the single biggest opportunity. But it’s by no means the only area of opportunity,” said Sullivan. “Certainly solar – and again, I’d defer to the NJBPU President on almost anything to do with solar. But the EDA is in the process of standing up something called the New Jersey Green Bank, which has been a longstanding strategic goal of the Murphy administration. And we’re going to hopefully to be receiving a big slug of federal funds to support that – because we see opportunities up-and-down the spectrum. Certainly, on the large-scale generation side with things like offshore wind – but also on storage, on building decarbonization, on building energy efficiency.”

“We know have a number of programs we’re standing up in that regard,” Sullivan continued. “There’s a bunch of different ways to attack this problem.”

Infrastructure concerns

“Kenneth, let me ask you – do you hear the same kind of concerns that I do about the infrastructure, about the grid and reliability,” Kanige asked. “When I talk to folks about this, I get – yeah sure, it’d be great if we could decarbonize all of our facilities, if we can go to electric vehicles. But the technology just isn’t there. The infrastructure isn’t there. We can’t really do it yet. And so therefore, we are resisting a little bit on what we’re able to do and how quickly we’re able to do it. Are you hearing the same things?”

“I am,” said Sheehan. “You hear an interesting combination of New Jersey should be the first and the leader – and New Jersey should wait until everybody else has figured it out. You can’t do both. One of the things you do tend to hear a lot of is the concern over making sure that the reliability continues to be there. New Jersey is, as we used to joke, at the end of the extension cord. If we don’t produce the power, it’s got to come from somewhere else. And we are at the ocean – and there’s a lot of places. Until offshore wind gets going, it doesn’t come from there.”

He said that he does see a desire to spend a fair amount of money and a desire to have the existing infrastructure work until the new systems are in place. “I do want to give the BPU a little bit of credit,” Sheehan continued. “The BGS auction that they use to purchase power is one of the best processes in the country. It’s remarkably effective at limiting the cost of generation, even when the cost of generation is going up. Much of the costs that we’re seeing in Jersey are coming from charges that come from PJM and some of these other entities. It’s very strange where they are involved with New Jersey – but not responsible to New Jersey.

“So, you end up with an interesting conversation and interesting situation, where we have to pay for things we’re not in control of,” Sheehan stressed. “But anytime you are looking to put facilities or infrastructure through somebody’s backyard, they’re always going to say no. That being said, everyone wants more infrastructure to make sure that nothing goes wrong. So, I am hearing that – and we are seeing more and more of the – listen, yes, there should be more generation. But don’t put it off my beach. Or don’t put it on my mountain. Or don’t put it in my backyard.”

Closing thoughts

Throughout the 90-minute discussion, the discussion hit on issues such as the ones above as well as whether policy changes are needed; emerging technologies of changing energy production and distribution sectors; energy sources such as solar, nuclear and others; generation/distribution issues raised by the proliferations of data centers and AI technology; how the state becomes a clean energy leader; and more – while also taking some questions from the audience.

As the conversation wound down, Kanige asked the panelists for their final thoughts.

“Appreciate the opportunity to be part of this,” said Sullivan. “I think this is an incredibly important topic. And again, one that does not get enough attention. People’s power bills get plenty of attention – arguably too much. But the transmission framework, the generation framework – how much power we are going to need to fuel the economy is not something that most people are dialed in on. So it’s an incredibly important topic to be kicking around – and I don’t think there’s an easy set of solutions. I think Gov. Murphy and Christine, her colleagues at the Board and others throughout the government are doing a ton of work to position us for the right long-term investments.”

“But it’s a generational-type ambition, and one that does not come easy,” said Sullivan. “We’re going to keep at it.”

“I think this was a great panel and it’s a really good conversation,” said Guhl-Sadovy. “The main takeaway that I think everybody has gotten is that – yes, we need more generation. Yes, there are technologies that are proven, that are available that we are investing in. That we’re going to do that in a way that’s environmentally responsible and gets us to our clean energy goals. And that we are looking at this from a portfolio approach. When there are new technologies that come online, we want to take those very seriously. We don’t want to take anything off the table.”

“Our goal is 100% clean energy by 2035,” the NJBPU president continued. “That’s Gov. Murphy’s goal. We want to get there. And we want to do that in a way that keeps costs as low as possible for our ratepayers, and that provides economic growth opportunities throughout the State of New Jersey.”

“I would echo most of what the President just said there – and that I think everything’s on the table,” said Sheehan. “Let’s continue to move forward. Let’s make sure that we have safe, adequate, proper services at reasonable rates. I’m probably a little more bullish on the idea of let’s try some of the newer things. Let’s try some carbon sequestration. Let’s try some modular nukes. Let’s take a look at fuel cells once again if you want to. There’s a pantheon of options out there – and I think that the Board and the state and EDA have been pushing forward on that in a good, solid manner.”

Sheehan said he commends the agencies for that.

“I just ask them to keep thinking about businesses moving forward – the need they have for power; the need they have for reasonable rates; and the need they have for ensuring that that grid stays up and running,” said Sheehan. “And for the state to continue to do what it does.”