New Jersey plans to go fossil-free by 2050. Its plan for doing so flows from a strategy to roll out charging stations for electric vehicles, solicit successive rounds of offshore wind development, and build an array of incentives to businesses and public-sector players in neighboring states.
For Newark native Joe Fiordaliso, managing this intricate strategy as president of the state Board of Public Utilities caps a 14-year stretch as a regulator with a mandate to deliver clean energy for citizens, incentives for purchasers, and economic progress over the years to come.
And he does mean years. We're consolidating his thoughts into another burst of fresh thinking from across our network. While we continue with remote work and face the confusing times ahead we know that the clean energy transition can't wait- and that those who see clean energy driving a whole clean economy can light the way.
What's on the horizon for New Jersey after the Covid-19 crisis? When we spoke with Joseph Fiordaliso, the president of the state's Board of Public Utilities, the vision includes electric cars and buses, wind turbines in the ocean, and busy factories making wind-energy equipment. A Newark native with a crackly voice, Fiordaliso has regulated utilities in three Garden State administrations. He says the current one, with Phil Murphy at the helm, can forge the deals and commit the investment to run the state's highways, factories and neighborhoods (and boardwalks!) on fossil-free fuel in the next 30 years.
We spoke to President Fiordaliso on March 11, when we were already carefully all washing hands but before New Jersey and other states froze most economic activity to slow the coronavirus spread. But the efforts he described roll on. The day we published this piece, the state announced an investigation into ways of sourcing clean fuel in light of federal efforts to protect coal. See the announcement here.
We've edited the interview for succinctness. If you want to read the whole transcript, email us and we'll get it to you.
CEFF: How do you see your role in implementing the new Energy Master Plan?
Fiordaliso: The Board, besides being the regulatory agency, is also the office of clean energy. All the governor's initiatives and visionary outlook for a carbon-neutral economy falls within our shop here. Solar is still a major component, but wind has become a major focus. By 2035, we want to have 7500 mw of offshore wind generation. We are also looking at microgrids and other forms of technology that will bring us to the governor's goal of a carbon-neutral environment by 2050.
We are developing an efficiency program with the cooperation of utilities, and that will be another big component. And we're building infrastructure to support the hundreds of thousands of electric vehicles we want to have on the road.
CEFF: How much can state governments do to create a market for carbon-free infrastructure?
Fiordaliso: We are currently getting very little help from the federal government. Most initiatives come up from the states, and we will continue. We're revolutionizing the energy generation industry.
CEFF: What is this like for you every day?
Fiordaliso: It is challenging, it is exciting, it is revolutionary—something that will benefit future generations. That to me is exciting, that they will look back and say y'know, they weren't so dumb after all! They tried to chart a course to get us to a carbon neutral environment. I'm excited every day I come in here. I have five grandchildren. I keep thinking of them. I really believe that we have a moral obligation to mitigate the effects of climate change.
CEFF: In that context, is there a hierarchy for seeking outside investment?
Fiordaliso: Offshore wind is going to provide a lot of outside investment. If you look at a map, New Jersey is a prime hub for manufacturing offshore wind equipment in the Northeast. Manufacturing can come back!
When people say renewable energy is expensive, I agree with them—but we also have to look at the cost of not doing something and at the economic benefits achievable because of renewable energy. In solar, as an example, over 7000 New Jerseyans have jobs because of solar and ancillary jobs. Offshore is going to be even bigger.
CEFF: How do you block that out?
Fiordaliso: We have our Economic Development Authority assisting with all that. We're recruiting a company for our first solicitation for 1100 megawatts in the water by 2024. It's a Danish company, so we are getting a lot of international attention. Any industry is going to bring other industry, as small as a deli.
Once we get our ducks in order, it's going to be sitting down with utilities and negotiating. Whoever does it better, that's fine—the glory is going to be a carbon-neutral environment.
CEFF: What is your strategy on transportation?
Fiordaliso: The state's number-one emissions source is transportation. That's 40 percent. So we're looking at electric vehicle charging, and working with New Jersey Transit. Another area of investment necessary is the infrastructure: charging stations and so on and so forth, to alleviate range anxiety.
CEFF: Why invest in the network before cleaning the grid?
Fiordaliso: They say if you build it they'll come. The grid has to be able to accept charging that is necessary. We're not going to a renewable-exclusive portfolio tomorrow. In the meantime, you have to utilize power, generate power from nuclear and gas-fired plants, until we're ready to wean ourselves. You need the bridge to get us to that goal. The bridge is nuclear, is natural gas. How do we treat people with EV charging at their homes? Does everybody plug their car in at the same time? When I say upgrading the grid, that's what I mean. We have to look at all angles here. It's a matter of planning for contingencies that become evident when you're doing this. It's a lot of work but it's worth every drop of sweat.
CEFF: How can finance accelerate the transformation, from efficiency to switching?
Fiordaliso: A lot depends on efficiency. Hopefully we'll be able to work out partnerships by the end of the year—on programs they're going to run for energy efficiency, what programs we're going to run, are we going to be partners in it, are they going to do everything? Some utilities have already submitted filings. Once we get our ducks in order, it's going to be sitting down with utilities and negotiating. Whoever does it better, that's fine—the glory is going to be a carbon-neutral environment.
CEFF: How do you balance ratebasing, or letting utilities charge for upgrades, with cheering on new competition between utilities and others?
Fiordaliso: Ratebasing is always an issue. It's going to affect you and me. Everything has to be balanced. You have to determine the best amount of service for the least money. Our business is to attract people to New Jersey, so we have to keep rates competitive.
When we started solar in the early 2000s, grants and subsidies helped. We have a Societal Benefit Charge on everybody's energy bill. But with solar, we've been moving more and more away from those incentives—as industries mature you pull back on the amount of incentive you provide.
CEFF: How are you coordinating with other agencies?
Fiordaliso: The Department of Transportation has been very active, as have the departments of Labor and Environmental Protection. There has been a lot of interagency cooperation here [because] we are obligated to go out and preach the word, if you will. We also have to keep in mind that there are very powerful forces out there that don't want us to succeed for very parochial interests.
CEFF: So where does finance come in with new products?
Fiordaliso: We have to set up a structure. When we rolled this out in early 2000, Joe and Son would come in and put solar on your rooftop. Suddenly some entrepreneurs would say wow, this is a way to make a buck. Now larger players got into it because they saw an opportunity. That's one of the great things about capitalism. That's the bait, if you will. Also, they look at the regulatory climate. How strict is that climate? If you make it attractive enough, they'll come.
CEFF: What are your next steps?
Fiordaliso: As far as wind is concerned, we want 7500 megawatts in the water. A second solicitation is coming out this year, and we're in proceedings with the first solicitation. I have people calling my office every single day who want to get involved financially. Our structure is in place, it's a matter of executing those plans. The Energy Master Plan has already put New Jersey on the map. We have solicitations coming from Denmark, Germany, almost all over the world.
New Jersey is in a very good spot to be a hub for manufacturing, which helps investors in a warehouse and in that corner deli that's going to sell you your butter roll and your coffee. Shame on us if we don't take advantage of that opportunity. When I finally retire, I want to have helped that corner deli.