Article

Scope of Clean Energy program demands better oversight

Legitimate concerns about the administration of New Jersey's Clean Energy Program have been raised and must be addressed.

I must acknowledge that a program of this size and importance needed more resources for management and oversight than what was put in place when the program was established. Since 2004, we at the Board of Public Utilities have taken steps with the Treasury Department to address these deficiencies. But we can and will do more.

The Clean Energy Program, in accordance with a state law enacted in 1999, uses money raised by a surcharge on electric and gas utility bills to fund investments in renewable energy and energy efficiency. Initially, the state's seven electric and gas utilities administered these programs. A study commissioned by the DiFrancesco administration found that much of this money was at risk of being wasted. Thus, after significant public input, in 2003 the BPU took over the administration of the program and the direct management of the renewable energy portion.

The program has achieved extraordinary successes that are especially important at a time when much of the country has been facing skyrocketing prices for natural gas and electricity. Only six solar electricity systems were installed before the BPU took over the program.

Today, our renewable... more [truncated due to possible copyright]  

I must acknowledge that a program of this size and importance needed more resources for management and oversight than what was put in place when the program was established. Since 2004, we at the Board of Public Utilities have taken steps with the Treasury Department to address these deficiencies. But we can and will do more.

The Clean Energy Program, in accordance with a state law enacted in 1999, uses money raised by a surcharge on electric and gas utility bills to fund investments in renewable energy and energy efficiency. Initially, the state's seven electric and gas utilities administered these programs. A study commissioned by the DiFrancesco administration found that much of this money was at risk of being wasted. Thus, after significant public input, in 2003 the BPU took over the administration of the program and the direct management of the renewable energy portion.

The program has achieved extraordinary successes that are especially important at a time when much of the country has been facing skyrocketing prices for natural gas and electricity. Only six solar electricity systems were installed before the BPU took over the program.

Today, our renewable energy program has helped to install almost 1,500 solar systems with more than 18 megawatts of capacity. It provided the seed money to make possible the now iconic wind farm at the doorstep of Atlantic City's marina district. The renewable program has grown almost 300 percent annually for the last three years and will have almost this same growth rate this year.

Because of this exponential growth in the program, New Jersey now represents 15 to 20 percent of the U.S. solar market. We are the second largest solar market in the U.S. and among the top five markets in the world. And, due to energy-efficiency measures implemented in the Clean Energy Program, New Jersey homeowners and businesses will save more than $2 billion in energy costs in the next 15 years. These are remarkable accomplishments.

Unfortunately, while the Office of Clean Energy staff members are experts in energy efficiency and renewable energy, we lacked expertise possessed by the Treasury Department in accounting or state procurement practices. That inexperience has led to the problems in management and oversight identified in the Treasury's 2004 draft audit report.

When the former treasurer notified me in July 2004 that his office had been alerted to potential problems, I knew the program was too valuable to allow any issues to go uncorrected. For that reason, I asked Treasury to audit Clean Energy and all of BPU's programs.

In 2004, we also agreed with the Treasury's recommendation to move the program's funds into Treasury-managed accounts. Additionally, in 2004, I requested that Treasury take over our fiscal operations through a shared services agreement, which later led to an interdepartmental agreement between our two agencies beginning in January 2005. Therefore, even though the BPU did not receive Treasury's December 2004 draft audit report until March 2006, and even though the draft report was never finalized, and as a result, contained significant inaccuracies, we were able to make real improvements.

In addition, we are working with Treasury to bring contractors on board to improve the financial and accounting expertise available to the program.

Going forward, we must complete the procurement process to bring the needed expertise and staffing support to the program. The Office of Clean Energy began this competitive procurement process in January 2004 and, with the assistance of the new treasurer, we are now nearing completion of these procurements in a fair and competitive manner.

The BPU commissioners also welcome more thorough investigations into the BPU and the Clean Energy Program, from its inception to the present. Allegations that the board somehow acted improperly in setting up the program or in placing the program's funds with a fiscal agent outside of Treasury do not comport with the facts.

As it does with all board orders, the Attorney General's Division of Law reviewed and approved the order that directed that the fund be established and a fund manager be hired. The board issued that order in a public meeting, with approval by all five commissioners and after an intensive process of public participation. The Division of Law then negotiated the contract with the fiscal agent. I have no doubt that any investigation would confirm this.

My fellow commissioners and I are dedicated to identifying ways to improve our policies and practices to better administer the Clean Energy Program. Equally important, we will carefully plan out the next stage of this program in order to sustain the expected growth. By thoughtfully preparing for the future, we can provide a stable foundation and grounding that will allow New Jersey to take the renewable energy and energy efficiency industries to the next level.

.


Source: http://www.app.com/apps/pbc...

AUG 13 2006
http://www.windaction.org/posts/3942-scope-of-clean-energy-program-demands-better-oversight
back to top