ASSEMBLY PANEL APPROVES CHIVUKULADIEGNANMcKEON MEASURE TO EMPOWER MUNICIPALITIES TO SHARE ENERGY SERVICES

ASSEMBLY PANEL APPROVES CHIVUKULADIEGNANMcKEON MEASURE TO EMPOWER MUNICIPALITIES TO SHARE ENERGY SERVICES

MUNI REP. JABLONSKI, CONSULTANTS GABEL & DeSANTI TESTIFY, LEAGUE’S DRESSEL ON THE BILL

(TRENTON) The Assembly Telecom and Utilities panel on Thursday unanimously approved a measure sponsored by Commitee Chairman Upendra J. Chivukula and Assemblymen Patrick J. Diegnan Jr. and John F. McKeon that would empower municipalities to share energy services.

“This is a breakthrough measure that would empower towns to lower costs and leverage efficiencies by pooling their resources to purchase and develop safe and reliable energy sources at more affordable rates,” Chivukula (D-Somerset) said.

The measure (A-3668) would authorize three or more municipalities to establish a shared services energy company (company) that could enter into contracts with municipal electric utilities, other public agencies, and private entites for the purchase and sale of electricty at wholesale rates. The terms and conditions of these contracts would be in keeping with federal law.

Similar ‘companies,’ commonly referred to as joint-action agencies exist in 37 other states.

The bill would override the existing “Uniform Shared Services and Consolidation Act,” which does not permit such joint operations.

“When it comes to the generation and transmission of electricity, economies of large scale can result in lower unit costs and electric rates. Considering the high cost of infrastructure development, the ability to invest in bigger power projects serves as an advantage. This measure would allow us to do that,” Diegnan (D-Middlesex) said.

“By enabling municipalities to enter into effective shared service contracts and allowing for aggregation in the marketplace, this measure would drive competition and help lower costs that could be passed on as savings to the taxpayer,” McKeon (D-Essex) said.

The Essex county lawmaker served as mayor of West Orange for 12 years.

The panel received testimony from James A. Jablonski of the Public Power Association of New Jersey, a municipal utility (MUNI) and consultants Steve Gabel and Fred DeSanti who represent utilities, power companies and municipal electric cooperatives.

The legislative committee of the New Jersey League of Municipalities (League) which represents the state’s 566 local governments plans to evaluate the impact of the measure next week.

“We believe this bill may provide an additional option to help municipalities lower energy costs. We look forward to examining  possible cost savings from shared service partnerships for the purchase and delivery of electricity,” said Bill Dressel, the League’s executive director.

The measure would also authorize the ‘company’ to develop sources for the utilization of renewable capacity and energy at wholesale rates in addition to the generation and transmission of electric power and energy.

Assemblyman Joseph R. Malone III (R-BordertownBurlington) is a prime sponsor of the bipartisan measure.

The Assembly Telecommunications and Utilities Committee hearing is available on-line at http://www.njleg.state.nj.us/media/archive_audio2.asp?KEY=ATU&SESSIO=2010

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Gita Bajaj
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