MID-ATLANTIC SOLAR ENERGY INDUSTRIES ASSOCIATION v. Christie

Citations: 14 A.3d 760; 418 N.J. Super. 499Docket: A-3374-09T4, A-4047-09T4, A-5948-09T4, A-5949-09T4

Court: New Jersey Superior Court Appellate Division; March 4, 2011; New Jersey; State Appellate Court

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The case involves the Mid-Atlantic Solar Energy Industries Association appealing against Governor Chris Christie regarding the validity of a provision in the 2010 Supplemental Appropriations Act, which allowed for the transfer of up to $158 million from the Clean Energy Fund to the General Fund of New Jersey. The court, in its decision dated March 4, 2011, upheld the validity of this transfer, thereby rendering moot three other appeals that contested interim executive actions related to the same funds. The Clean Energy Funds are sourced from a societal benefits charge imposed by electric and gas utilities, as authorized under the Electric Discount and Energy Competition Act (EDECA). The Board of Public Utilities (BPU) regulates the charge and is mandated to allocate funds for various purposes, including energy efficiency and renewable energy programs, in collaboration with the Department of Environmental Protection (DEP). The court's opinion emphasized the legislative framework governing the collection and administration of these funds, underlining the BPU's role in funding decisions.

Following the enactment of the Electric Discount and Energy Competition Act (EDECA), the Board of Public Utilities (BPU) initially allowed utilities to directly expend money collected from the societal benefits charge for energy efficiency and renewable energy programs. In 2003, the BPU established the Clean Energy Fund to independently manage these funds. Although initially deposited with a private fiscal agent, the funds were later transferred to the State Treasury. A 2007 amendment to EDECA permitted the BPU to use the societal benefits charge and other assessments to fund energy efficiency and renewable energy initiatives, leading to the inclusion of additional funding sources in the Clean Energy Fund.

Despite EDECA's restrictions on societal benefits charge usage, the Legislature authorized transfers from the Clean Energy Fund to the General Fund through various Appropriations Acts. Notable appropriations included $10 million for energy efficiency projects and ecological studies in 2008, and similar allocations in the 2009 and 2010 Appropriations Acts. The 2010 Supplemental Appropriations Act specifically authorized a $158 million transfer from the Clean Energy Fund to the General Fund, continuing a pattern of legislative appropriations.

On February 11, 2010, the Governor issued Executive Order 14, instructing the Division of Budget and Accounting to reserve sufficient funds to balance the State budget, resulting in a $158 million reserve from the Clean Energy Fund. This reserve was reflected in subsequent BPU budget revisions in April and June 2010. The Mid-Atlantic Solar Energy Association appealed the Governor's Executive Order and the BPU budget revisions, as well as the 2010 Supplemental Appropriations Act that mandated the $158 million transfer.

Mid-Atlantic's three appeals regarding the reservation of $158 million in Clean Energy Funds and a fourth appeal concerning the legislative authorization for transferring that sum into the General Fund have been consolidated. The court determines that the transfer, as stipulated in the 2010 Supplemental Appropriations Act, is valid, which renders Mid-Atlantic's other appeals moot. The appeal centers on whether the Legislature can reallocate funds from the Clean Energy Fund for General Fund use, despite N.J.S.A. 48:3-60(a) stipulating that funds collected via a social benefits charge are meant for specific purposes. The court affirms that the Legislature has the authority to amend prior laws through an Appropriations Act, citing precedents that recognize such legislative power. Section six of the 2010 Act is deemed an exercise of this authority, effectively allowing the funds to be appropriated for broader uses, similar to amending N.J.S.A. 48:3-60(a). Mid-Atlantic's argument that the Clean Energy Fund consists of "private money" is rejected; the funds are collected under state law and administered by the Board of Public Utilities (BPU) as part of the state treasury, with the BPU determining their use. The characterization of the funds as "public" or "private" is not seen as critical for affirming the Legislature's authority to transfer them.

The Legislature retains the authority to modify the purposes for which funds are allocated, as evidenced by their authorization to transfer up to $158 million from the Clean Energy Funds to the General Fund, a decision upheld as valid under the 2010 Supplemental Appropriations Act. This act is aligned with the goals of the Annual Appropriations Act, which ensures sufficient funding for appropriations. Consequently, the appeals by Mid-Atlantic are rendered moot due to the enactment of the General Appropriations Act for Fiscal Year 2011, which supersedes Executive Order 14 that initially reserved the funds. Moreover, Mid-Atlantic's challenge to the Board of Public Utilities (BPU)'s budget revisions, intended to reflect the fund transfer, is also moot. The court declined to address Mid-Atlantic's late-raised argument regarding the BPU's alleged failure to consult with the Department of Environmental Protection (DEP), noting that the issue was improperly presented and that the BPU had complied with consultation requirements in its budget preparations. As a result, the appeal affirming the transfer's validity is upheld while dismissing the other appeals as moot. Additionally, the Legislature authorized a further transfer of $10 million from the Clean Energy Fund in the 2011 Annual Appropriations Act, which Mid-Atlantic has not contested. The court opted to exercise its original jurisdiction to address the legal issues despite the BPU's argument that the challenge should be brought in the Law Division.