On January 27, 2020, Governor Murphy unveiled a series of broad regulatory proposals seeking to establish a “clean energy future” framework in the Garden State. The sweeping changes − billed as first-in-the-nation “comprehensive and aggressive suite of climate change regulations” − are laid out in three separate, but interrelated administration documents:

  • A newly updated New Jersey Energy Master Plan from the New Jersey Board of Public Utilities
  • Governor Murphy’s Executive Order 100
  • NJDEP Commissioner McCabe’s Administrative Order 2020-01

These new energy and climate change requirements would dramatically impact land use, development, utilities, energy consumption, and numerous other areas of everyday life.

How does the Governor’s Plan Impact New Jersey Businesses and Development?

Governor Murphy’s Executive Order and Commissioner McCabe’s Administrative Order provide a broad framework but no specifics. Over the next year, drafts and proposals of specific actions are to be developed. Sills Cummis & Gross will continue to stay abreast of these issues and the regulatory and statutory roll-out and provide updates as they become available.

However, background discussions have already raised concerns regarding:

  • Restricting new infrastructure for natural gas transmission;
  • Mandating “clean energy” for new or expanded uses;
  • Increasing flood hazard designations and further restricting development based on postulated potential future flooding;
  • Altering statistical methods for estimating impacts from rainfall;
  • Further restricting development in coastal areas and areas near waterways;
  • Short-circuiting rule making requirements;
  • Mandating use of theoretical estimates of potential climate change impacts; and
  • Additional permitting and regulatory burden as well as enforcement activity concerning air emissions, stormwater discharge, remediation, solid waste management and wastewater operations.

The New Jersey Energy Master Plan

The 291-page updated Energy Master Plan (EMP) outlines seven “key strategies” and an implementation plan with fixed steps and timelines targeted to reach the Administration’s goal of 100 percent clean energy in the Garden State by 2050. Issued by the New Jersey Board of Public Utilities, the January 27, 2020 EMP is responsive to Governor Murphy’s Executive Order No. 28 (2018) and declares “near unanimous scientific consensus that the global threat of climate change is grave.”

In seeking to correct a “trajectory and effort” that is “insufficient” to achieve the state’s climate change goals, the EMP outlines a framework for achieving statewide “carbon-neutral electricity generation” through a net-zero carbon footprint either by eliminating carbon emissions or balancing carbon emissions with carbon removal.

The EMP’s seven “key strategies” are as follows:

Strategy 1: Reducing Energy Consumption and Emissions from the Transportation Sector – encouraging electric vehicle adoption, electrifying transportation systems, and employing emission-reduction technology.

Strategy 2: Accelerating Deployment of Renewable Energy and Distributed Energy Resources – developing offshore wind, community solar, solar incentive program, solar thermal, and energy storage; advancing market-based clean energy development programs; and supporting distributed energy resources (DER) through reduced regulatory burden and financing.

Strategy 3: Maximizing Energy Efficiency and Conservation, and Reducing Peak Demand – enacting utility energy efficiency standards for natural gas and electricity, improving energy efficiency programs followed by adoption of new clean energy and energy efficiency financing mechanisms, and strengthening building and energy codes and appliance standards.

Strategy 4: Reducing Energy Consumption and Emissions from the Building Sector – supporting decarbonization and electrification of new and existing buildings, expanding statewide net zero carbon homes incentive programs, and revising building codes energy requirements while establishing a building decarbonization roadmap.

Strategy 5: Decarbonizing and Modernizing New Jersey’s Energy System – investing in grid technology including Integrated Distribution Plans, modifying rate design, and reducing natural gas reliance.

Strategy 6: Supporting Community Energy Planning and Action in Underserved Communities – for these communities: incentivizing local, clean power generation, prioritizing clean transportation, and supporting municipalities’ community energy plans.

Strategy 7: Expanding the Clean Energy Innovation Economy – investing in developing clean energy knowledge, services and products with an eye toward exporting them, attracting supply chain businesses and supporting clean energy research and development.

Governor Murphy’s Executive Order 100

Under Executive Order 100, the Governor directs the NJDEP to adopt Protecting Against Climate Threats (“PACT”) regulations within two years in order to “usher in systemic change, modernizing air quality and environmental land use regulations, that will enable governments, businesses and residents to effectively respond to current climate threats and reduce future climate damages.”

The gubernatorial directive, with a five-page preamble and 26 “Whereas” clauses detailing policy backdrops, mandates the NJDEP undertake several steps within two years of the Order:

  • Establish a greenhouse gas program to monitor and report “significant sources” of emissions of carbon dioxide and “short-lived climate pollutants” such as black carbon, hydro- and perfluorocarbons and methane.
  • Monitor progress toward reduction of those greenhouse gas emissions toward the limits established in the Corzine-era Global Warming Response Act, N.J.S.A. 26:2C-41, a law largely ignored by the Christie administration.
  • Establish criteria to “govern and reduce” carbon dioxide and “where necessary, short-lived climate pollutants.”
  • Modify regulatory and permitting programs to include climate change considerations, such as sea level rise, into; specifically, land use, water supply, storm- and wastewater permitting and planning, and solid waste and site remediation permitting. (Executive Order 100 also requires the NJDEP Commissioner to issue her own Administrative Order within thirty days that identifies an initial round of NJDEP regulations to be updated in this on-going two-year roll-out.)

NJDEP Commissioner McCabe’s Administrative Order 2020-01

NJDEP Commissioner Catherine McCabe issued Administrative Order 2020-01 on January 27, 2020 outlining steps to be taken in the next six months to address emissions and climate change using the “best available science.”

Specifically, the NJDEP staff was directed to undertake the following action:

  • Prepare a report by June 30, 2020 that recommends regulations and measures “necessary to reduce greenhouse gas emissions and short-lived climate pollutants” to meet the State’s 2050 emissions reduction goals, and then promulgate those regulations within 18 months and adopt same within 24 months.
  • Propose regulations and “regulatory action” within 12 months establishing a greenhouse gas monitoring and reporting program to identify all significant sources of statewide greenhouse gas emissions and also establish criteria to monitor, govern and reduce greenhouse gases, and adopt same within 18 months.
  • Propose regulations within 12 months to incorporate climate change considerations with specific reference to sea level rise and chronic flooding, into the Coastal Zone Management Rules, Freshwater Wetlands Rules, Flood Hazard Control Act Rules, the Stormwater Management Rule, and “any other regulations or guidance which reference or otherwise address flood storage, flooding or inundation” and adopt same within 24 months.
  • Revise the “Guidelines for the Preparation of an Environmental Impact Statement/Environmental Assessment” to also incorporate climate change considerations.
  • Incorporate climate change considerations as well into all relevant NJDEP grant, loan and contracting programs as well as planning, policy, guidance, communications and educational materials within 12 months.
  • Finalize and issue sea level rise guidance within 60 days that describes the general framework, core principles, and methodology for Department programs to determine the most appropriate sea level rise projection applicable to a project and adaptation measures to include in the planning process.
  • Each NJDEP Assistant Commissioner will undertake a broad, sweeping review within 90 days to identify and prepare “short- and long-term action plans” within 180 days to identify:
    • Regulations that would be “appropriate to revise to incorporate climate change considerations”;
    • Statutory legislation that is “necessary or appropriate” to enable NJDEP to fulfill the goals of Executive Order No. 100 and the Administrative Order;
    • Areas where an NJDEP program “can contribute to sustainable and resilient development and redevelopment”;
    • Climate change education and communications opportunities and plans for the regulated community and residents; and
    • Ways to coordinate and support inter-governmental climate change efforts.

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With these broad, sweeping policy proposals, there are clearly many more details to come, so stay tuned. Governor Murphy’s Executive Order 100, which directed the NJDEP Commissioner to issue this Administrative Order 2020-01, instructed that these regulatory proposals are to be “updated from time-to-time.” Sills Cummis & Gross will continue to stay abreast of these issues and the regulatory and statutory roll-out, and will provide updates as they become available.