The president of the New Jersey Board of Public Utilities covered a lot of ground in a recent fireside chat: who makes money on the electric grid, what New Jersey pays to move power, how electric vehicles can help the grid and whether nuclear plants have a future here.
Ben Hertz-Shargel also dropped this nugget: Those topics make up about a tenth of what the agency has going on.
Hertz-Shargel said the BPU can look sleepy and dry from the outside, an agency where everything takes 90, 180 or 270 days. The reality, he said, is a lot of work arriving at once.
“There are so many things happening at once, and we are just trying to manage so many workflows,” he said. “It is a legitimate challenge.”
The chat, moderated by BINJE Editor Tom Bergeron, closed the first day of the inaugural Hermann Sustainability Summit at the New Brunswick Performing Arts Center. And it detailed a bit of his day-to-day life since Gov. Mikie Sherrill nominated Hertz-Shargel on June 5 to succeed Christine Guhl-Sadovy as President of the agency.
Hertz-Shargel, who came from Wood Mackenzie, where he was global head of grid edge, and earlier designed demand-response technology at EnergyHub, brings a unique background to the role.
Hertz-Shargel has a doctorate in mathematics from UCLA and an undergraduate degree in computer science from Northwestern. And he said he spent much of his career building software solutions.
There are plenty of ideas to follow, but reforming how utilities make money may be one of the most essential, he said. And it is one of the changes Sherrill called for in her executive orders.
“Right now, utilities are incentivized to build big infrastructure because they earn a rate, basically a guaranteed rate of return on this infrastructure, and it is not aligned with customer outcomes,” he said.
The BPU is requiring utilities to set up virtual power plant programs — an interim one for a couple of years, then a long-term one with a tariff. Customers with electric vehicles, home batteries and smart thermostats who opt in to the program would be paid when the grid needs relief. Down the road, he said, the big battery in an EV could pay its owner – as long as they enroll – by sending power back to the grid.
The board has new muscle on transmission, too. Under the Advanced Grid Technologies Act, signed by Sherrill, it can regulate supplemental transmission projects for the first time — the local lines utilities have built for years with almost no oversight. Hertz-Shargel said New Jersey pays more for them than any other state on a normalized basis.
“We now have the ability to say we are in the loop here, and so every project that comes forward, you got to show it to us,” he said.
He also wants to move solar and storage away from flat incentives and toward pay based on the value they give the grid. Behind all of it, he said, is a tension with no right answer: cut costs for ratepayers now or invest now so costs fall later.
New Jersey does not do this alone. Hertz-Shargel represents the state among regulators from the 13 states and Washington, D.C., in PJM Interconnection, the regional electricity market. He said the states are speaking with one voice on regional transmission lines and on reforming PJM, where, he said, there has been a governance failure.
On nuclear, Hertz-Shargel said the BPU will hold a procurement under the bill Sherrill signed and will move ahead only if it is a net benefit to ratepayers. Developers must get federal financing, and windfall profits in PJM would go back to ratepayers.
“No one pays a dime until the thing is actually producing power, so the developer takes all the risk there,” he said.
