What does the state’s Energy Master Plan mean for businesses?

The state’s Energy Master Plan is one of Gov. Phil Murphy’s most significant policy moves. It represents an effort to move New Jersey to producing all of its energy needs through clean sources by 2050 through a variety of changes to production and distribution processes, and to changes in the way consumers power their businesses and homes.

While the goal may be admirable, many business owners and executives are concerned about the timetable and costs of those changes. Mike Taylor is one of them.

Taylor is the owner of Combined Energy Services in Sussex County and a member of the New Jersey Propane Gas Association. The group is a statewide trade association representing propane gas and distribution services companies with 120,000 customers — residential, industrial and commercial.

NJBIZ recently spoke with Taylor about Murphy’s plan and its implications. What follows is an abridged version of that discussion. The questions and answers have been edited for length and clarity. The full interview is available at NJBIZ.com/njbizconversations.

And you can help keep the conversation going by signing up for the NJBIZ energy panel discussion on Oct. 18. For more information and to register, go to njbiz.com/events.

NJBIZ: Among the components of the Energy Master Plan and one of the most controversial, is the electrification requirement — essentially for businesses and residences to go completely electric and do away with fossil fuels. This conversion requirement, I’m told is at the heart of your group’s opposition. Can you take me through that? What, specifically, are your objections as a business owner and the association’s objections as a trade group?

Mike Taylor: Sure, sure.  So, the state of New Jersey [is] forcing electrification upon everything, and it’s in terms of climate change. I don’t think anybody is against having cleaner fuels, but the push to bring this on so rapidly is, it’s realistically impossible. … And people are saying. I’m leaving New Jersey … it’s a common theme. We here in New Jersey and New York State – people are going to leave because it’s unaffordable at a certain point. Usually, they say, when I retire, when my kids graduate and my parents pass away – it’s a common theme that we have a steady stream down I-95 and people are leaving the state, because it’s unaffordable. Forced electrification is going to increase this rapidly.

New Jersey, as you know, already has some of the highest property taxes in the United States, some of the highest electric costs. And now we’re going to force businesses and homeowners to convert to electricity. This is just unimaginable. What’s going to happen?

Q: There are a couple of layers to that and I wanted to unpack it a bit. First, the cost. The Murphy administration has its own cost estimates, and they’re saying it’s a lot less than what critics are saying. How are they wrong? What’s the problem with the estimates that that the administration came up with?

A: First … New Jersey is the largest natural gas state by percentage in the country. I believe it’s 75% of the homes and businesses in new jersey use natural gas. There’s 10% use heating oil and propane gas. So, we’re in the more rural areas. Natural gas is the main thrust, and people rely on that in New Jersey.

They’re going after large boilers, which is anything over 1 million BTUs. Sounds like a big boiler. But in the State of New Jersey there are over 8,300 boilers of that size. Those boilers are your schools, your municipal buildings, your manufacturing, industrial facilities, hospitals, learning centers, distribution warehouses … Those are going to be starting this December. They’re going to be forced to convert to electric right off the bat. The state estimates it’s going to be over $2 million per system to convert these to electric heating. On top of that, the operating costs are going to be four to five times, admittedly in the state’s report, for electricity over natural gas or other products.

So, it’s lunacy, and it’s just simply going to hit our jobs first. We’re going to go after the large boilers and senior citizen housing complexes. It’s going to raise rent. It’s going to force all the manufacturers to increase costs of everything we touch — health care. Everything’s going to go up. That’s a really wild way we’re going.

Q: You also mentioned how quickly this was moving. You mentioned a deadline in December for this to start. Is that what you are looking for, then? Are you looking for them to delay the implementation of this? To eliminate the conversion mandate altogether? What would you like to see happen at this point?

A: Well, we would like constituents to start waking up and looking at it because they’re starting with large buildings but the next thing – the whole master plan, the long run – is going to go after all the consumers, your small businesses, and your homes.

I’ve got to be honest. People have to start looking at this. No one’s against clean energy. We all want it, whether it’s nuclear, wind, solar, hydro. But it just can’t be forced upon us this quickly. It’s just going to break the consumers in the state. It’s going to push more people to leave.

Q: OK. I guess the question, then, is you mentioned that everybody’s in favor of cleaner fuels, and everybody is worried about climate change. New Jersey, as you know, is particularly vulnerable with a hundred miles of shoreline, and everybody remembers Sandy and Ida, and all sorts of other tropical storms that seem to be getting worse. What should the state do at this point? Again, should it be delaying implementation until those kinds of alternative fuels are online?

A: I really think that there’s going to be technology developing that you and I can’t even fathom. Fifteen years ago, if you would have told me, “Hey, Mike, I need you to come on live – we’re going to do a podcast.” I’d say “What are you talking about?” I really think the development of hydrogen or things that we can’t even fathom for energy sources will be here in the next 50 years. But to put the brakes on what we have here, this domestic energy choice in the United States — natural gas and propane are clean burning. We also have renewable factors coming into play. We’re starting to mix in agriculture, putting soybeans into natural gas and propane. So, we’re seeing renewable products developing rapidly.

I just can’t see, Jeff, where we’re going to be able to say, “Hey, here’s the deadline. You have no choice. You have to switch.” The grid can’t handle it. There are no alternatives available. We could fill the entire state with solar panels. We’re not going to make a dent with what we need here for energy in the state. And it’s just It’s not going to be affordable.

So at the end of the day when you have a pizzeria that is used to paying for natural gas or propane gas, You’re going to tell them, “Hey? You have to convert your oven to electricity, and it’s going to cost you four or five times more. We’re going to be paying 50 bucks for a pizza in New Jersey.