Public-Private Collaboration: Smart Energy Policy

Tuesday, December 23, 2014 - 14:17

The Editor interviews Tricia Caliguire, Special Counsel in the Environmental & Energy Group of McCarter & English, LLP. Ms. Caliguire represents clients in the energy, utility and environmental sectors.

Editor: You served as chief counsel to the New Jersey Board of Public Utilities and as policy advisor for energy in the administration of Governor Chris Christie. As a former government insider, can you please describe the policymaking process?

Caliguire: When I started in Governor Christie’s Office of Policy and Planning we went through a pretty long and involved listening process. We met with a variety of stakeholders who had interest in energy and environmental issues and talked about the issues that were important to them and some of the obstacles they'd experienced in trying to do business in the state. The governor was very interested in promoting New Jersey as a place to live, a place to work, and a place where businesses could come in and expand. He talked early on about energy as a tool of economic development, and how innovative policies surrounding the costs and the delivery of energy can help existing companies grow as well as attract new businesses from other parts of the country or the world.

One initiative started with the governor directing the Board of Public Utilities to revise the Energy Master Plan with an emphasis on promoting economic development, energy reliability and environmental protection. Stakeholder outreach followed.

Editor: Give us some specifics about how the revised Master Plan had an impact on companies operating in New Jersey.

Caliguire: The first goal was to reduce the cost of energy across all consumer classes – residential, commercial and industrial, and the second was to promote a diverse mix of energy resources and in-state generation. At about that same time, the governor signed a bipartisan piece of legislation that offered ratepayer subsidies for new combined cycle gas/electric generation units that devoted their energy output to New Jersey, which aligned with the goals he had set. We did a lot of work at PJM, which is the regional transmission organization, to make sure that the governor's policies were understood, and we encouraged changes in some of the PJM programs to benefit New Jersey.

Editor: What issues are getting the most attention from the government?

Caliguire: Speaking only about the agencies I was responsible for and while I worked in government, the goals outlined in the Energy Master Plan were the focus – reducing the cost of energy for all consumers, promoting new, clean, in-state generation, and promoting new technologies, energy efficiency, conservation and renewables.

In the final Energy Master Plan, the governor announced a proposal to address the crash in the market for solar renewable energy certificates, which at the time threatened the viability of the solar market, which is a very successful home-grown industry. The Solar Act of 2012 included much of what the governor proposed; the results have been stabilization of the market and projected steady growth. While we will see fewer of the large, grid-supply solar projects on farms and open spaces, there are still opportunities for commercial and residential consumers to use solar to reduce energy costs.

The BPU and the Economic Development Authority recently announced the first funding opportunity of the new Energy Resiliency Bank. Assistance is being made available, on a competitive basis, for renewable and/or distributed generation projects at specific public facilities. Additional funding will be available in 2015 for hospitals and healthcare facilities, and then for other public facilities.

The BPU’s Clean Energy Program just closed two new solicitations – one for battery storage, which we see as essential to the widespread use of renewables, and the second for biopower. Frequently, while I was in the governor’s office, companies would come to us looking for assistance, and the first programs we usually talked about were those offered through the Clean Energy Program. 

Editor: What state legislation is on the horizon?

Caliguire: This October, state Senators Bob Smith and Kip Bateman introduced a bill (S-2444) that would mandate increases in the renewable portfolio standard every five years to a high of 80 percent by 2050. This would have tremendous consequences for electric bills, the system of electricity distribution, and even land use.

Editor: How has your experience in the public sector informed your client representation at McCarter & English?

Caliguire: My work in the governor’s office and at the BPU showed me that credible representatives advocating on behalf of their clients can help tailor legislation, rulemaking and policy. As a result of my experience, I can honestly tell clients that I understand how best to frame and present their concerns. And, in some cases, I helped draft the very regulations and legislation that my clients are trying to navigate.

Editor: As an industry veteran now working from the corporate side, would you describe the most critical legal and policy issues facing businesses and what the stakes are for New Jersey and other states?

Caliguire: This question is best considered from the perspective of two different types of corporations – those that are in the energy production industry and those that consume energy (which is virtually everybody else). For energy producers and related companies, I think the more critical issues are national in scope: Will demand response be barred from participating in wholesale markets? What will the final greenhouse gas regulations look like? How do we balance the need to reduce CO2 emissions with the risk of overdependence on natural gas (and, then, what about the recent action in New York State to ban fracking)? Did we learn anything during last winter’s polar vortex? For those that consume energy, this is all-important because of the impact on prices and concerns about reliability. If we had not had coal plants operating last winter, we would have been at risk for brownouts – and possibly blackouts – during the polar vortex. As it was, many residential and commercial customers saw dramatic increases in their energy bills. 

With respect to New Jersey’s position, the response to EPA’s Clean Power Plan was highly critical. When PJM was asked by the state commissions to model compliance with the draft regulations, ours was the only state that voted against doing so. 

Editor: Are business opportunities emerging from current and anticipated legislative and regulatory developments?

Caliguire: Consumers of energy need to be shown that being “green” also means saving money. There are opportunities to use energy efficiency, renewable energy and conservation measures in residential and commercial new construction. While in the public sector, I worked with officials at major home and hardware stores and a college in New Jersey about the opportunity to incorporate smart technologies into campus living/learning centers and look forward to building on those efforts. Superstorm Sandy showed the benefit of microgrids and distributed generation. Finally, we are unlikely to reach the aggressive renewable portfolio standards being considered across the country, including in New Jersey, without advances in energy storage.

Editor: How do you advise in-house clients regarding their efforts to engage constructively with government regulators?

Caliguire: I was proud to work with many bright and dedicated public servants. While most of the attorneys I have dealt with were cordial and professional, from time to time I would be surprised by their obvious lack of regard for government employees. The answer is easy enough: treat people the way you want to be treated. And remember: no one likes surprises. Be honest. Help the agencies help you. 

Editor: Are there partnerships that you see having a positive impact?

Caliguire: The BPU holds monthly renewable energy stakeholder group meetings, and the feedback the agency staff gets at those meetings has been useful. It has had an impact on the regulatory process.

Editor: Are there any sleeper issues that in-house counsel should have on their radar?

Caliguire: There is a bill pending in the New Jersey legislature that would prohibit local governments from being sued in Spill Act cases. That is a development – significant if it passes, yet somewhat off the general radar – that we will continue to monitor on behalf of our clients.

Please email the interviewee at tcaliguire@mccarter.com with questions about this interview.