Economic self-interest can go two ways. The most obvious is to focus on increasing personal wealth, letting the chips fall where they may. The second is a broader view that understands we are all in this together, especially as concerns our physical environment.
If we are to stabilize or improve what is a rapidly deteriorating situation, we as a world community must accept that saving the environment is a necessity and not just an individual prerogative.
Facing this struggle, policymakers must develop ways to manage energy use, both conservation and energy efficiency, says Richard Thigpen, vice president of state governmental affairs for the PSE&G Services Corporation. Challenges, however, abound, one of the foremost being “How are we going to pay for it?”
Thigpen will speak on “Hot Topics in Energy Management: Integrating Green Solutions” at the Mercer Economic Summit on Thursday, March 12, at 2 p.m. at the conference center at Mercer County Community College in West Windsor. Cost: $60. For more information contact email@example.com, call 609-924-1776, ext. 105, or select “Events” at www.princetonchamber.org.
The moderator will be Nicholas Asselta, commissioner of the state Board of Public Utilities; panelists include Richard Sandner, business manager for the New York Metro area of Covanta Energy; Shane Williams, director of new hospital construction for Capital Health; and Lisa Westerfield, director of business development for Structure Tone and cofounder and past chair of the U.S. Green Building Council’s New Jersey chapter.
Thigpen says we need to focus in particular on how to generate electricity, as it is one of the primary ways we generate the carbon dioxide that feeds global warming. And, adds Thigpen, other ways of generating electricity might have their own harmful environmental effects. Burning coal, for example, leaves a residue that must be disposed of and releases sulfur dioxide into the atmosphere that falls as acid rain.
As we rethink how we generate energy, says Thigpen, we need to remember that energy growth and economic growth go hand in hand. “Nobody yet has figured out whether we can achieve economic growth while reducing the growth of energy,” he says. Because saving the environment is not a choice, however, policymakers are approaching energy management and its financing from a variety of perspectives:
Increasing renewable energy sources. Public policy is pressing New Jerseyans to increase the amount of electricity generated from solar or wind power. But probably the biggest problem with solar energy is that it costs significantly more than the environment-damaging alternatives, and even with rebates, few people have the financial resources to go solar.
To encourage energy suppliers serving retail customers to move toward solar, New Jersey has a renewable portfolio standard that will require them by 2021 to include 22.5 percent qualifying renewables in their energy mix.
One way to fund solar and wind power is by developing a market for renewable energy credits, in which companies unable to generate enough solar power would buy renewable energy credits. Management of that market would be the responsibility of the BPU, which will ensure that the value of the renewable energy credits is appropriate and that those who need them will be able to buy them.
Thigpen adds that a federal investment tax credit is available for solar energy. The bottom line, though, is that people will have to pay more for solar, and public policy will need to work with the private sector to come up with a solution.
Using more nuclear power. Nuclear power may be about to get a second hearing, says Thigpen, because it carbon-free and may have the potential to produce the largest amounts of electricity at the lowest costs — without generating carbon or pollution. But it does, of course, produce nuclear waste, which raises political hackles. “There is not a clear public consensus around nuclear power, but I think it is growing,” says Thigpen.
Conserving energy by funding efficiency for low- and middle-income households. Also pushing us as a society toward energy conservation is the rising cost of energy itself. “To control prices, you have to control demand,” says Thigpen.
Whereas the upper-middle class might be able to afford the upfront investments necessary for more efficient appliances and other conservation measures, for many middle and lower-income households, buying more expensive energy-saving hot water heaters, air conditioners, and washing machines is out of the question.
“We can’t afford to leave poor people out of the game in saving energy,” says Thigpen. “They have to be part of the package. If we leave out 30 to 40 percent of the population, the problem is exacerbated for the rest of society. It will leave the problem still on our doorstep.”
Finding a way to finance a reduction of energy usage in these middle and lower-income households, however, raises a number of problems. First of all, says Thigpen, people resent having to pay for other people’s energy efficiency. And even when money is available, for example, through the stimulus package just put into law, technical issues come to the fore. What, after all, should be done with homes that are structurally unsuitable for new technologies?
“The question is whether to spend a few thousand on improving windows, providing insulation, sealing doors, fixing hot water heaters, and getting more efficient appliances in a house that is structurally dilapidated,” says Thigpen. And what should be done for the residences of people who rent rather than own?
Another issue is identifying who is going to do the work and finding money to pay them. “It can be a source of new jobs, particularly for the inner city community,” says Thigpen. “But how to get this paid for, that’s the $64,000 question.” On the other hand, he adds, “We can’t afford not to pay for it. Prices are going to continue to rise if we don’t manage demand.”
Installing smart meters. Smart meters tell consumers how much it costs, for example, to leave the television on while they are at the movies. They also connect into the central electricity grid and inform consumers about the hourly fluctuations in the cost of electricity. Since it is more expensive to operate appliances during peak demand periods, knowledge of costs might change consumer behavior.
Moving consumption away from periods of peak demand reduces the cost of the whole system. “One of the biggest costs of electricity is building and maintaining the infrastructure to maintain the highest demand periods and to handle maximum capacity,” says Thigpen. “This is about 1 percent of the time, but it imposes enormous costs on the system.”
Thigpen grew up in East Orange; St. Louis, and Wilmington, Delaware. His mother is a social worker, and his father, formerly a home builder, is now involved in politics. He received a bachelor of arts in political science from Brown in 1982 and holds a J.D. from Columbia.
From 1988 to 1990 he was an associate at New York law firm Thacher Proffitt and Wood in the mortgage-backed securities practice group. From 1990 to 1996 as district director for New Jersey Congressman Don Payne and from 1996 to 1999 as executive director of the Democratic State Committee.
In 1999 Thigpen was a co-founding partner of 1868 Public Affairs, where he consulted on matters including lobbying, strategic planning, public relations, and government relations services to clients in New Jersey, New York, and Washington, D.C.
In 2007 Thigpen was named vice president of state governmental affairs for PSE&G. There he is the chief state lobbyist and works with nonprofits and government to support community activities. He is also a political analyst for the New Jersey Network and an academic associate for PublicMind, Fairleigh Dickinson, Polling and Survey Research Institute.
Although in the past the percentage of support for energy efficiency work had been low, says Thigpen, the amount of funding connected to energy issues has been steadily increasing. “We have to internalize the necessity of energy efficiency — how to save on individual bills and how collectively to control energy prices and how to protect our environment,” observes Thigpen
In the short term, the going will be tough as we try to balance how much people are willing to pay with the strong likelihood that demands on electricity will continue to increase. Computers, laptops, cell phones, and televisions all use electricity, and the newest high-definition televisions use five to six times the electricity of the older sets, says Thigpen.
“Most people are accumulating those items,” he says. “If we are lucky, we can slow the rise of energy consumption, if not turn it around.”
But Thigpen hopes we will develop effective solutions to manage our energy use. “Necessity is the mother of invention,” he says. “As time goes on, we are not going to have a choice.”