Combined heat and power proposal held from committee, will be reworked

TRENTON – A bill that would establish a program for combined heat and power as well as other alternative-energy sources was held from committee Monday and will be worked on, its sponsor said.

The bill, A1384, would follow on the heels of the state’s solar-energy program, and attempt to set up a portfolio requirement for combined heat and power, flywheel energy storage, and paper-derived fuel, according to its sponsor, Assemblyman Upendra Chivukula, (D-17), Franklin Township.

However, the bill needs work, he said, and was held from the Assembly Telecommunications and Utilities Committee.

He said the Division of Rate Counsel raised concerns about cost, and environmentalists raised concerns about biomass and paper fuel.

In essence, the bill as originally written:

Would have the Board of Public Utilities set up regulations requiring power suppliers and generators to obtain a percentage of kilowatt hours sold from alternative energy;

Suppliers and generators could comply with this mandate by purchasing alternative energy certificates;

The minimum percentage must reach 5 percent by the 12th year of this program’s existence;

And if at any time there is an insufficient number of alternative energy certificates to satisfy the required percentage, then BPU must establish a compliance payment.

Another aspect of the bill would allow BPU to use funds collected under the alternative energy compliance payment as grants for alternative energy generation at government facilities that can demonstrate a return on investment within five years.

Chivukula said he plans meetings with various groups to address concerns and then bring the bill back before committee.

“The challenge we face,’’ he said, “is that with a 22.5 percent standard for renewable energy, even if you take five percent from solar and five percent from wind, we’re not there.”

Biomass, he said, can offer a creative way to help meet that need.

But the N.J. Sierra Club, for example, has reservations about biomass, about paper-derived fuel, and about unintended consequences.

Sierra Club Director Jeff Tittel said that there is a concern that under the bill’s current wording some party might think it could start burning newspapers rather than recycling them.

And they have issues with biomass because they say it increases pollution from climate change.

Chivukula said, though, that biomass needs to be in the discussion about alternative energy.

Chivukula said that with what has happened to New Jersey’s solar industry as certificate prices have dropped, with the slow pace of getting wind energy in place, and with the difficulty of attracting capital for alternative energy in general, paper mills and biomass sources could help with jobs and the economy.

“I’m excited about the legislation,’’ he said, but he conceded it needs work before it receives a public hearing in committee.

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  Combined heat and power proposal held from committee, will be reworked