New Jersey Turns to Distributed Resources to Enhance Energy Resilience

Superstorm Sandy caused tremendous damage, as well as hardship and loss of life, in communities across New Jersey – with a total of over $37 billion in physical damages alone, according to a Rutgers School of Public Affairs and Administration study released in October 2013.

Given current and rising levels of atmospheric CO2 and other greenhouse gases, New Jersey and states up and down the Eastern Seaboard, as well as across the U.S., can likely expect more in the way of extreme weather events and greater variability in weather patterns.

Aiming to strengthen New Jersey's resilience to power outages and energy shortages, the Christie administration on July 23 announced it has taken a big step forward in establishing the New Jersey Energy Resilience Bank (ERB). It will be the first state-sponsored fund of its kind dedicated specifically to enhancing the resilience of energy infrastructure and supplies to extreme and variable weather patterns and conditions.

With an initial $200 million from the mid-Atlantic state's Community Development Block Grant-Disaster Recovery (CDBG-DR), the ERB is to “support the development of distributed energy resources at critical facilities throughout the state,” according to a New Jersey Board of Public Utilities (NJ BPU) press release.

The legacy of Superstorm Sandy

Superstorm Sandy caused extensive damage to New Jersey's energy infrastructure, leaving some 5 million residents without electricity. Infrastructure and supplies of petroleum and natural gas were damaged or disrupted, as well as those for electricity.

Residents of coastal Monmouth and Ocean counties were among the hardest hit, though the monetary value of damages were nearly as large inland in Bergen county, N.J. Spotlight highlighted in March 2013. Residents of Toms River were not allowed to return to their homes for more than three months after Superstorm Sandy hit in late October 2012.

“More than 8,800 residences, nearly 90 percent of those individual houses, were damaged, 1,000 severely, according to the state Department of Community Affairs,” N.J. Spotlight reported.

Nearly 5,100 businesses were affected as well. A rollercoaster in neighboring Seaside Heights washed into the sea. All told, nearly 60 percent of Seaside Heights' residences (1,929 of them) were damaged, along with over 200 businesses, many along its famous boardwalk.

The benefits of distributed energy resources

Critical facilities, such as hospitals, wastewater treatment plants and universities, where distributed energy resources – combined heat and power (CHP) co-generation, fuel cells and off-grid solar inverters with battery storage – were able to weather Superstorm Sandy better than others. It's these sorts of distributed energy resources the ERB intends to finance.

According to state Board of Public Utilities (BPU) President Dianne Solomon: "The launch of the Energy Resilience Bank, the first of its kind in the nation to focus on resilience, is yet another effort of the Christie administration to increase energy resilience at critical facilities throughout New Jersey.

"Increasing energy resilience, whether through the Energy Resilience Bank, the BPU approved resiliency improvement measures implemented by utility companies or N.J.’s Clean Energy Program, will minimize the potential impacts of future widespread power outages due to major storms like Superstorm Sandy.”

In addition to enhancing the resilience of the state's energy infrastructure, spurring greater deployment of distributed energy resources will also benefit residents in terms of lower and more stable energy costs, a cleaner environment and improved energy efficiency. As state Economic Development Authority (NJ EDA) CEO Michele Brown elaborated:

“Distributed energy resources proved extremely resilient following Superstorm Sandy; unfortunately, due to high initial costs, many critical facilities do not have these energy resilience solutions in place. The ERB will help address this unmet need by providing technical and financial support to critical facilities across New Jersey to ensure they have a path for building energy resilience.”

The New Jersey Energy Resilience Bank

According to New Jersey's Action Plan amendment, ERB will focus on providing capital, primarily in the form of low-interest loans and grants, so that critical facilities, such as waste and wastewater treatment plants and hospitals, can deploy distributed energy resources. It's envisaged funding will expand to include other critical facilities, including police, fire and emergency services buildings, as well as schools that can function as emergency shelters.

In addition to the initial $200 million in CDBG-DR funds, the BPU approved a sub-recipient agreement with the state's Economic Development Authority to work jointly to establish and manage the ERB. This includes collaborating on the program's design, which in turn includes technical, operational and financial conditions that applicants will need to meet to qualify for ERB funding.

The BPU and EDA also announced the hiring of two individuals to fill two leadership positions with the Resilience Bank. Mitch Carpen was named ERB's executive director, and Thomas N. Walker was named deputy director. As director, Carpen will be responsible for managing ERB's project investment pipeline, which includes overseeing the selection and closing of individual deals as well as setting ERB's strategic direction. Walker, as ERB deputy director, will serve as head of policy and internal operations.

*Image credits: 1) NASA; 2) Fox News; 3) U.S. Coast Guard