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Extremely Complex and Significant ALEC Privatization Give-Away Moving Quickly Though Legislature With Little Public Awareness or Debate

Bill Provides For Secret Contract Negotiations

At this point, virtually anyone still breathing knows about ALEC – the American Legislative Exchange Council – and the corporate interests they serve and the role they play in drafting pro-corporate stealth “model” state legislation.

So, any ALEC “model” bill must be presumed to be a stealth effort and fraud against the public interest and get extra scrutiny.

So, why are NJ Democrats supporting (another) ALEC model bill, premised on austerity and small weak government, to attack environmental protections and the public interest in ideological pursuit of privatization?

Why is none of this a scandal or discussed in the NJ media?

Even the recent NJ Spotlight quick analysis says nothing about the bill being an ALEC model and downplays the implications of the bill.

I’m getting way ahead off myself, but even without the ALEC model bill link, this alone should send up red flags, because the bill is premised upon:

The need to upgrade the State’s energy infrastructure come (sic) at a time of fiscal austerity and budgetary restraint.

In addition to the ALEC corporate model bill and austerity ideology, the bill shares aspects of what Naomi Klein has called “The Shock Doctrine” – corporate interests use a crisis to privatize public resources and push a controversial corporate agenda through below the radar.

I thought that was Governor Christie’s and the Republican agenda.

I am referring this time to the model bill from ALEC titled the “Environmental Services Public-Private Partnership Act“, a bill that:

Provides an arrangement through which government utilizes the private sector to produce goods and services that would otherwise be provided or funded completely by government.

Sounds like privatization, no?

(hit this link for a complete list of all ALEC attacks on State environmental laws and protections -be sure to scroll down to find the full list).

The NJ version of this ALEC model bill is A4082 Aca [1R]  the “Government Energy Reliability and Savings Public-Private Partnership Act.” 

The bill is sponsored by Assemblyman Chivikula (D-Middlesex.Somerset), Chairman of the Assembly Telecommunications and Utilities Committee , the Committee of jurisdiction, and co-sponsored by fellow Democrats Caride (Bergen/Passaic) and Eustace (Bergen/Passaic).

The bill is moving quickly and below the radar .

Austerity, privatization, energy reliability, Shock Doctrine, and ALEC. That is some combination of warped thinking and ideology that is backing this bill.

The government and taxpayer bear all the financial risk and the profits are privatized, all while promotion a fossil fuel energy industry agenda.

The bill already was approved by the full Assembly on June 24, 2013 by a mostly party line vote of  51-20.

According to the sponsors, the bill is designed to:

The bill is really about “creating a market” for private profiteers and giving away public assets and opportunities.

Under the Trojan Horse guise of creating “public private partnerships”, the bill would ensconce within State government a “P3 Unit” to promote private interests and thereby institutionalize private sector interests within State government.

This is the fox designing the hen house – it makes the traditional concept of “government capture” by special interests seem like child’s play.

That installation of private interests inside government would have significant implications.

A vague and broad definition means a whole hodgepodge of “energy projects” would qualify, making the bill effectively policy neutral – dirty fossil partnerships (fossil co-gen, CHP, garbage incineration, eta l) and renewable energy project are eligible.

Failure to restrict “partnership” negotiations – which ostensibly provide a profit premium to the private sector –  to renewable energy undermines sound energy policy and virtually assures that money will drive energy policy decisions under these “partnerships”, with little public benefit to balance the subsides out.

At the same time, other provisions of the bill would undermine what’s left of the fabric of effective environmental, economic, and consumer protection/public utility regulation of the energy industry.

These so called “partnerships” pose strong potential for abuse and are rifle with corruption, insider dealings, crony capitalism, pay to play, and other ripoffs.

The concept of “energy reliability” has been used to scare people of NJ into approving and paying for boondoggle projects, e.g. threats like: “the lights will go out if we don’t do this”.

So called necessary “energy reliability” projects include billion dollar boondoggle inter-state electric power distribution lines  like the Susquehanna-Roseland project through the Delaware Watergap; construction of new in-state gas power plants; dangerous and destructive gas pipelines through NJ’s most sensitive forests, under the Wanaque reservoir, through the Pinelands, and in NJ’s densely populated urban areas.

The bill would set up a confidential, secret, and non-transparent contract negotiation process – with exemptions under NJ Open Public Records Act for “proprietary” and critical economic info- for “partnership agreements” between government and the energy industry.

That process is rife with potential for abuse – revenue sharing agreements and all sorts of kickbacks and corrupt financial games are encouraged.

The bill would expand current deregulation, privatization, and subsidies to the energy industry, and without effective safeguards and controls, adequate government oversight, public involvement, transparency, or countervailing public interest benefits.

The bill amounts to a giveaway to private interests at the expense of the taxpayer, the environment, and sane energy policy.

Tellingly, the professional, independent and non-partisan Office of Legislative Services was unable to prepare an estimate of the costs of the bill.

That alone should send up a huge red flag – ripoff!.

But none of these issues have been discussed, except within Trenton circles.

Deregulation and privatization of the energy industry have been disasters. So has so called “negotiated procurement” led to widespread abuse (e.g. see the “McEnroe” 1985 law that involved negotiated contract process to build garbage incineration, while deregulating the profits made at those facilities.)

So why are Democrats pushing this ALEC model bill that would promote all this?

Christie Silence in Wake of Paulsboro Toxic Train Disaster Contrasts With Obama’s Executive Order in Response to Texas Fertilizer Explosion

NJ Has Severe Risks Due to Dense Populations Nearby Chemical & Rail

Earlier this week, I contrasted NJ Gov. Christie’s response to the Paulsboror Toxic train derailment with Louisiana Gov. Jindal’s (see this).

But the better contrast is not with Jindal, it’s with President Obama.

Christie’s silence, neglect, failure to act – and the gross mismanagement by his DEP, including false statements that downplayed public health risks – is no accident.

It is a matter of policy, and direct result of the Governor’s “regulatory relief” policy under Executive Order #2.

That Order calls for “immediate regulatory relief”, which includes rolling back NJ’s strict state standards to their federal minimum counterparts. Across the board, DEP is on a short leash and any new DEP regulations are strictly verboten – just not to be even discussed.

(curious, the NJ press corps has reported the Christie slogan “red tape” HUNDREDS of times, but never – not once – used the actual Christie EO term to describe the policy, which is “regulatory relief”.  Just another example of media bias and parroting of slogans).

The powerful chemical industry exercises an effective veto over the Christie Administration – and the NJ Legislature too.

So no wonder Christie was AWOL and DEP was downplaying risks and doing nothing to even suggest the need for new regulations.

But the NJ situation under Gov. Christie is very different than President Obama, who took action in the wake of the deadly April explosion at a Texas fertilizer plant.

Per AP report:

The massive explosion at the plant in the community of West, Texas, killed 15 people, leveled hundreds of structures and damaged three of the town’s four schools. It also prompted new scrutiny of regulations at chemical plants and the risks posed by deadly chemicals to people living in surrounding areas.

In contrast to Gov. Christie, who has done nothing in response to the Paulsboro tragedy, on August 1, President Obama issued and executive Order to improve the regulation of and reduce risk from chemicals.

(for Beltway Inside EPA coverage of the Order, see : Obama Order May Boost Bid For Stricter EPA Fertilizer, Plant Safety Rules

(for the expected Republican attack on regulation and the chemical industry’s attempt to avoid EPA regulation in favor of laxer oversight under Homeland Security, see this story).

Here is the Obama Order:

Executive Order — Improving Chemical Facility Safety and Security

Section 6 of that Order is key – it provides:

c) Within 90 days of the date of this order, the Administrator of EPA and the Secretary of Labor shall review the chemical hazards covered by the Risk Management Program (RMP) and the Process Safety Management Standard (PSM) and determine if the RMP or PSM can and should be expanded to address additional regulated substances and types of hazards. In addition, the EPA and the Department of Labor shall develop a plan, including a timeline and resource requirements, to expand, implement, and enforce the RMP and PSM in a manner that addresses the additional regulated substances and types of hazards.

While it is targeted at risks from ammonium nitrate fertilizers in response to the Texas explosion, it could have a dramatic impact in NJ.

Let me suggest a few reasons why the Order has been ignored this far in NJ, and how it could have an impact:

1. The Order calls for improved coordination among federal, state, and local regulators on chemical safety and emergency response  –

that is clearly in response not only to Texas, but the Paulsboro train derailment.

2. The Order calls for EPA to consider an expansion in types of risks regulated.

This too is clearly in response to paulsboro, where huge gaps in regulation were found in transportation, railroad, and local emergency plants and industry risk management plans.

EPA may consider risks from rail transportation and storage, HUGE issues here in NJ.

3. The Order calls for consideration of whether additional chemicals should be regulated.

NJ is a major chemical producing state – NJ has unique risks due to dense populations living very close chemicals plants ands railroads – the “kill zone”.

4. The Order includes identification of needed  legislative initiatives.

5. The Order creates a process to consider additional requirements – best practices could include “inherently safer technologies” and “toxics use reduction”

Sec. 7. Identification of Best Practices. The Working Group shall convene stakeholders, including chemical producers, chemical storage companies, agricultural supply companies, State and local regulators, chemical critical infrastructure owners and operators, first responders, labor organizations representing affected workers, environmental and community groups, and consensus standards organizations, in order to identify and share successes to date and best practices to reduce safety risks and security risks in the production and storage of potentially harmful chemicals, including through the use of safer alternatives, adoption of best practices, and potential public-private partnerships.

Now the question becomes, will this Order even get media and environmental group attention in NJ?

A similarly important Obama Executive Order on Sandy got zero converge and no engagement by NJ “environmentalists” see:

• Obama Executive Order on Sandy Provides Sharp Contrast With NJ Gov. Christie’s Response

How can this be happening again?

 

Another Toxic Train Derailment Highlights Need for Stricter Regulation

Louisiana Gov. Involved, Immediate Evacuations, Public Given Accurate Scientific Warnings – But Not One Word From Gov. Christie

Lessons Learned From NJ’s Failures in Paulsboro Last Year

[Updates below]

Yesterday, there was another toxic train derailment involving vinyl chloride, this time in Louisiana – see:

• Derailed train in Louisiana carrying highly toxic substances, Jindal says
• Train derailment leads to haz-mat situation, evacuations

The accident highlights unacceptable risks and the need for stricter rail and chemical safety laws and regulations, particularly for a densely populated state like NJ, with hundreds of thousands of people at risk as a result of living nearby chemical plants and rail lines.

But a really interesting set of conclusions arise from the contrast between how Louisiana and NJ officials responded to the derailment.

You don’t have to even read those articles to note glaring contrasts with last fall’s Paulsboro NJ train derailment – just read the headlines.

Note that even the headline blares that vinyl chloride is some very dangerous stuff.

But in NJ, emergency reponders and the public were LIED to about the risks of the chemical vinyl chloride, leading to multiple lawsuits by well over 100 residents and emergency responders.

But that’s not all the headline tells us.

Note that the State government is involved and that the State spokesperson is the Governor.

Governor Jindal not only is involved and on top of the situation and the science, but he even visited the site.

We have not heard one single word from Gov. Christie about the trauma suffered by the people of Paulsboro, the safety of the emergency responders, the dangers of train derailments, and the risks of toxic chemicals.

Not one word (for early community reaction to that, see  New Jersey Governor Christie continues to ignore Paulsboro residents).

(nothing from Gov. Christie, even as the Pausboro train bridge collapse became a national poster child for crumbling infrastructure)

But there are even more significant contrasts.

In Louisiana, the vinyl chloride had not even leaked, yet there was an evacuation in a 1 mile radius.

In contrast, after a catastrophic release of vinyl chloride, the people of Paulsboro were told to “shelter in place”, with only a small initial evacuation zone which expanded as emergency responders got pressure from critics.

The Paulsboro derailment was the subject of a recent series of investigatory hearings by the National Transportation Safety Board – I plan to write about that soon.

But one things seems clear: Louisiana has avoided and/or learned from the major mistakes made by NJ in Paulsboro.

Another sad fact is even clearer:

NJ – once a national leader in chemical risk management and emergency response –  is lagging behind and less aggressive than Louisiana.

This is another legacy of Governor Christie’s “regulatory relief” policy under Executive Order #2.

[Update #1: I tried to find data on the Town (or Parish) and people where the derailment occurred.

My hypothesis was they they were poor, black, and minority – these populations suffer disproportionate burdens of environmental and health risks and undesirable land uses, like railroad lines and chemical plants –  textbook environmental injustice.

Looks like I was right: Wiki

The racial makeup of the parish was 56.51% White, 42.13% Black or African American,  0.14% Native American, 0.20% Asian, 0.01%Pacific Islander, 0.31% from other races, and 0.70% from two or more races. 0.91% of the population were Hispanic or Latino of any race. 16.7% reported speaking French or Cajun French at home.^[8]

The median income for a household in the parish was $22,855, and the median income for a family was $28,908. Males had a median income of $29,458 versus $18,473 for females. The per capita income for the parish was $12,042. About 24.70% of families and 29.30% of the population were below the poverty line, including 37.70% of those under age 18 and 27.50% of those age 65 or over.

But the fellow conservative Republican Gov. is far more open and responsive in Louisiana than NJ – shame on Christie.

[Update #2:  More contrast – keep in mind that NJ experienced at actual catastrophic release of vinyl chloride. That has not happened in the Louisiana derailment, but the Gov. there is taking precautions and has a evacuation in place.

Jindal declares state of emergency due to train derailment, hazardous leaks

Another Ratepayer Ripoff

Investments in Conservation & Renewables Yield Far Greater Benefits

If They Build It, You Will Pay

Hold on to your wallets, because here comes another ratepayer backed boondoggle.

South Jersey gas and electric ratepayers will be forced to pick up the huge cost of providing private gas pipeline infrastructure to serve the privately owned re-powered B.L. England power plant. They also will bear the risk of cost increases and the private entities will recover the costs plus profits on those investments.

The South Jersey Gas Company (SJG) is already before the Board of Public Utilities (BPU) right now seeking an almost 9% rate increase – an $11.48 per month increase for the typical homeowner – perhaps resulting from a 2010 BPU approval of $450 million infrastructure investment.

This half billion dollar boondoggle is sure to increase rates even higher, particularly due to unique risks associated with the economics and financing of fracked gas, which the NY Times called a “Ponzi scheme”.

So, lets look at the costs and risks of this project and examine how BPU addressed them.

Shockingly, Rate Counsel raised no objections.

According to original estimates by South Jersey Gas, pipeline construction would cost $63 million. That estimate was recently increased to $90 million.

The final cost is likely be even higher, including multi-million dollar “mitigation” or “offset” bribes to the Pinelands Commission for their approval – so lets say $100 million.

According to South Jersey Gas documents, the re-powering of the B.L. England plant will cost $400 million.  Again, final costs are likely to be much higher – let’s say $500 million.

And those costs do not including the plant and pipeline operating costs or the costs of the gas.

The source of the gas for this pipeline project is Marcellus shale fracking.

Anyone who knows anything about the financing and production and depletion rates of fracked natural gas wells knows that high up front capital costs and steep depletion curves lead to dramatic reductions in both energy return on investment (EROI) and the traditional economic return on investment (ROI).

Simply put, it costs more energy and more money to produce diminishing amounts of gas.

So steep gas price increases are baked into this billion dollar boondoggle cake.

So, now let’s take a look at how the Board of Public Utilities addressed these huge technical, financial, and economic risks to ratepayers.

Did BPU do a rigorous review of the underlying production/depletion and economics of fracked gas drilling and look out for you?

Or did BPU focus on assuring South Jersey Gas Co. (SJG) profits?

On June 21, 2013, the BPU issued a mere 4 page Order approving construction of the gas pipeline – click to read.

First of all, the SJG petition for approval was submitted by SJG to BPU on March 8, 2013.

From what I can tell from reading the Order, it looks like there was no public interest, independent expert testimony, or environmental group intervention in the BPU review of the SJG petition.

Nor was there any pubic hearing or formal consultation with the Pinelands Commission, or review by independent experts in the environmental, engineering, and economics of frack gas well drilling and financing.

There was one public hearing in Upper Township. It was sparsely attended and no expert witnesses were involved.

The BPU Order claims that “No members of the public voiced opposition to the pipeline alignment.”  

This may be true, but it is absurd on its face and points to major defects in the BPU review of the project – which might as well have been held in the Governor’s Office.

The Board did not review this project for consistency with the climate change and emission reduction goals and energy policy adopted in the 2007 Global Warming Response Act. NO CLIMATE CONSIDERATIONS WHATSOEVER. Shocking negligence.

It appears that BPU conducted – at best – a cursory policy review and cherry picked certain pro-gas aspects of the Christie 2011 Energy Master Plan.

The Board deferred response to environmental concerns raised by the public (at that one public hearing) to the environmental permitting process.

These are HUGE flaws, especially because the environmental permits – both for the pipeline construction and the BL England plant re-powering – do NOT consider the key issues, such as project need and justification, alternatives, global warming, fracking gas, Pinelands, et al impacts.

Despite these procedural and substantive weaknesses, the petition was quietly and quickly approved by BPU in just weeks, a remarkably rapid approval.

The substance of the BPU Order is provided on just 4 pages.

I’ll try to touch on issues as they are presented in the order:

The pressure in the pipeline will be 700 pounds per square inch.

This is a high pressure line, almost triple the 250 pressure in a typical SJG line.

This high pressure raises major issues regarding: 1) pipeline safety; 2) pipeline capacity and growth inducing potential; and 3) pipeline gas leak and greenhouse gas impacts associated with pipeline emission rates.

Natural gas has a huge greenhouse gas warming potential – at least 25 times that of CO2 – so pipeline leaks and [lifecycle gas] emissions are a major concern and have the potential to wipe-out any carbon reductions from converting BL England from coal to gas.

High pressure also implies a huge potential capacity (capacity is a function of the volume of the pipeline times the pressure. Higher pressure can move much more gas).

BPU implied the pipeline would promote “reliability” and serve as backup for 63,000 customer  in Cape May.

But a recent SJG press release states a FAR larger number: 267,000!

Once online, the annual throughput of gas to the BL England facility will be about 20 million dekatherms, essentially equal to the amount of gas SJG currently provides to approximately 267,000 homes in a year. 

Just how much gas is SJG bringing into the region? How much new growth with this gas support  – and all of it located in the highly vulnerable shore region and environmentally sensitive Pinelands?

No capacity estimates were even presented by BPU – another major flaw.

Safety risks are greater under high pressure – it appears that BPU merely deferred to SJG representations on safety issues.

Pinelands forest fire risks were not even considered.

And I saved the best for last.

Although the Pinelands Commission lawyer, Ms. Roth, emphatically stated publicly at the July 27, 2013 meeting that the Commission was NOT anticipating a Memorandum of Agreement (MOA) with BPU at that time, the BPU’s June 21, 2013 approval already INCLUDES A MOA WITH THE PINELANDS COMMISSION! see @ page 3:

Like I said, it’s Chinatown!

Open Space Debacle – Preliminary Results Now Final

A Tough Love Statement to my friends at KIG

[Update below]

I recently wrote a preliminary coroner’s report as a post mortem on the presumed death of the open space sales tax Resolution.

But the brain dead corpse was put on life support, while the legislative doctors frantically sought life saving amendments.

But despite those efforts, the corpse expired at 5 pm last night, prompting this coroner’s statement to the “Keep it Green” (KIG) Coalition parents:

On The Death of Open Space

It is unfortunate that a [41] 51 year old program has died.

The program died as a result of un-natural causes.

I will characterize the cause of death a result of political malpractice driven by selfishness, cowardice, compromised integrity, poor judgement, lack of analytical skills, and the narrow and elite  perspective of the KIG parents.

This was a needless and premature death.

Before the parents can be licensed to pursue another Open Space child, the following non-negotiable mandatory conditions shall be met:

1. New Money

Due to a structural budget deficit, and billions of dollars of unmet social, infrastructure, and environmental needs, any initiative must generate new revenues.

2. Urban Equity

Allocation of funding must be equitable and address urban needs and environmental injustices.

3. Linkage to Climate Change Policy

The land preservation program must be subordinate to and integrated with climate change policy. There are multiple inter-connections, a discussion of which is beyond the scope of this note (and “forest stewardship” as currently conceived does not include them).

4. Planning and Regulatory Reform

The open space program must be based upon and implement a land use plan and regulatory policy.

In addition to the serious problems with the sales tax as the financing mechanism, it does not pass the straight face test simultaneously to be promoting development everywhere (including in high hazard shore locations just wiped out by Sandy) with every financial subsidy, regional planning, and regulatory dismantling conceivable and then to argue we need taxpayer dollars to purchase at risk flood prone properties.

It makes no sense for DEP to relax stream buffer and wetlands protections and promote new water and sewer infrastructure to serve new development in environmentally sensitive lands by mapping those lands in sewer service areas (thereby dramatically driving up land values), or by over-allocating water supply – and then say we need to preserve environmentally sensitive lands with taxpayer dollars.

These are just a few egregious illustrations of the contradictions that must be resolved – there are more flaws, including things like land appraisal value methodology.

I say not one more taxpayer dollar to land purchase until the regional planning (i.e. Highlands, Pinelands, and a New Coastal Commission); the DEP program planning; and DEP regulatory tools are restored and invigorated.

This would include enforceable reforms so the local home rule ratables chase is restricted from driving up land values and acquisition costs through zoning lands for development that should be preserved.

5. Political Credibility

There must be an effort to speak truth to power and hold politicians, government officials, corporations, and institutions accountable for their actions, regardless of their political power or ability to provide favors to the KIG coalition members.

And this specifically includes a requirement that they hold this Gov. accountable for the horrible planning and regulatory policy he has imposed that totally undermines sound policy.

Conclusion

The KIG coalition will have no credibility unless and until they advocate for a balanced land preservation, regulation, and planning framework that meets ALL of the above conditions. 

[Update – this KIG statement, blaming republican Senators NOT Gov. Christie, is a perfect example of a total lack of political credibility: NJ KEEP IT GREEN DISAPPOINTED IN SENATE REPUBLICANS’ FLIP-FLOPPING ON OPEN SPACE BILL

The Senators were responding to extreme pressure, threats, and arm twisting by Gov. Christie.

KIG is protecting Christie by exclusively blaming Senate Republicans.

KIG does not even MENTION Gov. Christie, despite his political threats and his failure to honor the promise he made during the 2009 campaign to establish a dedicated funding source.

That bullshit must stop.