Senator Phil Haines, a member of the Senate Budget and Appropriations Committee asked Commissioner Joe Doria in a letter today to exempt power generation from the constraints imposed by the new Council on Affordable Housing regulations. Senator Haines is concerned that buildings and structures built by public utilities and alternative energy producers are not exempt from the 2.5 percent development tax the new regulations impose on commercial development. A copy of the letter is attached.
“The failure to exempt power generation plants from the COAH regulations will quite likely slow the construction of cleaner, more efficient generation stations,” Haines stated. “This will inevitably hike the cost of electricity for South Jersey consumers and increase pollution across the region.”
July 28, 2008
Honorable Joseph V. Doria, Jr.
Department of Community Affairs
101 South Broad Street
P.O. Box 800
Trenton, New Jersey 08625-0800
I am writing to call your attention to a provision of the recently enacted legislation to revise the State’s affordable housing laws (P.L. 2008, c. 46) that may impair the ability of this State to reduce heating and electricity prices for its residents, weaken our efforts at controlling the emission of greenhouse gases, and damage this nation’s effort to become independent from foreign sources of energy.
Specifically, I am referring to the provision of the legislation that mandates the imposition of a 2.5% non-residential development fee on the construction of “any building or structure, or portion thereof, which is designated to a use group other than a residential use group according to the State Uniform Construction Code. This fee is to be collected from a “developer,” the definition of which means the legal or beneficial owner or owners of a lot or of any land proposed to be included in a proposed development, including the holder of an option or contract to purchase, or other person having an enforceable proprietary interest in such land. While there are exceptions from the non residential development fee, buildings and structures built by public utilities and alternative energy producers do not number among them.
Given the language that was used in this legislation, it would appear that the 2.5% non-residential development fee must be imposed upon the public utilities that attempt to construct new power plants, as well as any person who intends to construct any structure to produce energy from renewable sources such as solar technology, photovoltaic technology, wind energy, fuel cells, and geothermal technology.
The imposition of a 2.5% affordable housing fee on the value of a multi-billion power plant project could have a damaging effect on the energy bills of New Jersey ratepayers, who will be forced to pay for this new affordable housing mandate every time they turn on a light switch or touch their thermostat. Worse still, builders of alternative sources of “green” energy will be forced to pay the non-residential development fee, thereby undermining our efforts to reduce our reliance on unstable foreign energy sources and combat global climate change.
Any legislative enactment that increases the cost of providing reasonably-priced energy to New Jersey ratepayers is disastrous public policy, and P.L. 2008, c. 46 clearly falls into this category. Policymakers should be concentrating on making New Jersey more affordable for its hard-pressed middle class and reviving our second-worst in the nation business climate, not enforcing social engineering schemes that will result in higher energy bills for residential and commercial customers alike.
I respectfully request that you endorse a legislative amendment that exempts from the 2.5% non-residential development fee any public utility power plant construction or renovation, as well as the construction of any structure that provides an alternative source of energy. We must work together to ensure that this legislation does not result in higher energy bills for the people of South Jersey.
I look forward to speaking with you on this issue in the future.
Sincerely,
Philip Haines
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