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Discussion Points Department of Environmental Protection FY 2019-2020 Discussion Points 1. In 2004, the “Highlands Water Protection and Planning Act” was enacted into law. The national Highlands Region has been recognized as a landscape of special significance by the United States Forest Service and is designated as a Special Resource Area in the State Development and Redevelopment Plan. The State portion of the national Highlands Region is nearly 800,000 acres, or about 1,250 square miles, covering portions of 88 municipalities in seven counties. The New Jersey Highlands is an essential source of drinking water, providing clean and plentiful drinking water for one-half of the State's population, including communities beyond the New Jersey Highlands, from only 13 percent of the State's land area. The “Highlands Water Protection and Planning Act” promised landowners in the Highlands preservation area that they would be properly and fully compensated for the loss in property values they suffered as a result of the law. Yet, over the last 14 years, the State has not met this commitment in full. Last year, the department indicated that they had received 246 offers from landowners to sell their land in the Highlands. • Question: How much funding has been spent by the State and other entities to compensate landowners in the Highlands region for property value loss? How much funding is still needed to provide full compensation for property value loss? How many of the 246 offers from landowners in the Highlands have the department purchased? What were the funding sources for these purchases? Answer: Since August 10, 2004 the DEP has spent nearly $174.5 million to acquire 30,290 acres in the Highlands. Local governments and nonprofit organizations have used $105.1 million in Green Acres funding to preserve 12,030 acres. In addition, the Highlands Council undertakes its own acquisition/funding initiatives. According to the Highland Council’s 2018 report, approximately 314,796 acres of the Highlands Region, or 37%, is currently preserved. Of that, 209,767 are in the Preservation Area and 105,029 are in the Planning Area. We do not have a number for total value in the Highlands, but DEP has received 253 offers from landowners to sell their land, with an asking price of $179 million. We are currently working with 64 landowners, with another 21 that are under consideration. The asking price for pending offers is nearly $26.9 million. (Asking price does not represent appraised values.) Since last April, the DEP invested nearly $6.5 million to preserve 1,920 acres in the Highlands. Local governments and nonprofits preserved 389 acres using $2,539,422 in Green Acres funding. We expect additional requests for acquisition funding from local governments and nonprofit organizations under our March 2019 funding round. Acquisitions in the Highlands were completed using funding from the Corporate Business Tax dedication and the Garden State Preservation Trust, supplemented with federal grants. Local government and nonprofit organizations match their Green Acres awards with local open space taxes, local general funds, and private funds. 1 Department of Environmental Protection FY 2019-2020 Discussion Points (Cont’d) 2. The Regional Greenhouse Gas Initiative (RGGI) is a regional cap and trade program to reduce greenhouse gas (GHG) emissions from the power sector. The program began holding auctions in 2008. Nine states in the Northeast and Mid-Atlantic currently participate in the program. New Jersey participated until Governor Christie pulled the State from the program in May 2011. On January 29, 2018, Governor Murphy issued Executive Order No. 7 to start the process of re-entering the RGGI compact. Under the executive order, the department was required to initiate the rulemaking process for promulgating regulations for the administration of New Jersey’s full participation in RGGI. The department is also required to create guidelines for the allocation of funds realized by the State as a result of New Jersey’s participation in RGGI. According to the executive order, these guidelines will ensure that funds are allocated to projects that will serve communities that are disproportionately impacted by the effects of environmental degradation and climate change, and which will alleviate the negative effects on human health and the environment. Supplementary budget information forecasts $5.75 million in FY 2019 revenues to the Global Warming Solutions Fund, where revenues from RGGI participation are deposited. In addition, Governor Murphy sent a letter on February 16, 2018 to the RGGI states notifying them of New Jersey's intent to rejoin RGGI "as a partner in reducing greenhouse gas emissions, improving the health of residents, and growing the economy in our region." Last year the department indicated that once it successfully negotiates its CO2 emissions allocation with other RGGI states, it would be able to complete the rule making. The compact limits the overall amount of carbon that can be generated in the power sector. Each state has an annual carbon allowance budget. Fossil fuel-fired power plants producing 25 megawatts or more within the RGGI states purchase carbon emission allowances at state auctions held quarterly. States then use the proceeds from the allowance auctions to invest in energy efficiency, renewable energy, and social programs. Each state decides how they will spend their revenue. • Question: When does the department believe the negotiations for the CO2 emissions will be complete? When does the department believe the rule making process will be complete? Answer: The RGGI states will formally vote to add New Jersey at such time that both of our rule proposals are adopted and effective. The Department held public hearings regarding the rule proposals on January 25, 2019 and provided a 60 day comment period which closed on February 15, 2019. The Department anticipates adopting the two rules by early summer 2019. • Question: Given that RGGI has functioned for 10 years, does the department believe that RGGI’s current mission should be modified or expanded, for example, beyond the power sector, to improve its effectiveness? Could RGGI serve as model for other regional initiatives to control greenhouse gas emissions? Does the department believe that the auction as it currently operates sets a high enough price on carbon emissions? That RGGI carbon allowances should be stricter? 2 Department of Environmental Protection FY 2019-2020 Discussion Points (Cont’d) Answer: The Department considers RGGI one of many tools/strategies to address climate change and reduce greenhouse gas emissions. The Department is working collaboratively with other State Agencies and researching many other methods to address greenhouse gas emissions in other sectors. Including expanding electric vehicle charging infrastructure and the number of electric vehicles utilized, enhanced waste management methods, control strategies on halogenated gases and more. An example outside of the electric generation sector is the Transportation Climate Initiative or TCI which looks to implement a regional cap and invest system for the transportation sector. The Department is currently evaluating the feasibility of participating in such a system. The RGGI market operates like all other markets in that price is established based on demand for the commodity. The Department along with the BPU has evaluated the projected costs of allowances under various market conditions and determined that New Jersey will realize emission reductions by participating in RGGI without resulting in an undue cost burden to ratepayers. The Department is comfortable with the predicted market reactions to New Jersey rejoining RGGI. New Jersey along with all the other RGGI members will continue to assess the effectiveness of the RGGI program throughout the program’s duration. 3. The Drinking Water Quality Institute (DWQI), which advises the department on drinking water standards, recommended maximum contaminant levels (MCLs) for PFOA (perfluorooctanoic acid) in March 2017 and PFOS (perfluorooctane sulfonate) in June 2018. The U.S. Environmental Protection Agency conducted testing from 2013 to 2015 and found these chemicals in 3.4 percent of New Jersey public water systems, almost twice the national rate of 1.9 percent. In a joint statement, the Governor’s Office and the department acknowledged the need for a quick turnaround for adopting new regulations for these contaminants, yet did not specify when the recommendations of DWQI would be adopted. • Question: What are the considerations in adopting the standards recommended by DWQI? What is the plan for implementing MCLs for New Jersey public water systems? If there is not a plan, why not? What is the timeline for implementing MCLs for New Jersey public water systems? If no timeline is set, why not? Answer: The rate occurrence for New Jersey vs. the nation noted in the question refer to PFOS. The rates are even more concerning for PFOA, which were detected in nearly 11% of samples in New Jersey as part of the same sampling effort as compared to 2% nationwide. PFAS contamination is not unique to New Jersey but it does occur at a higher rate here. That’s why New Jersey continues to be at the forefront with respect to both the science and the regulation of these contaminants. 3 Department of Environmental Protection FY 2019-2020 Discussion Points (Cont’d) Pursuant to the Safe Drinking Water Act (SDWA), the Department is authorized to promulgate MCLs after considering the recommendation of the Drinking Water Quality Institute (DWQI) if there are adverse health effects associated with a contaminant and the contaminant may be found in public water supplies in New Jersey. At the Commissioner’s direction, the Department can move forward to propose and adopt an MCL as an amendment to the NJ Safe Drinking Water rules. The adoption of an MCL includes not only the setting of a standard but also establishes which water systems will need to monitor for the contaminant and at what frequency.
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