The New Jersey Board of Public Utilities (Board) will soon implement its Energy Efficiency Proposal as required by the Clean Energy Act (CEA) and Energy Master Plan (EMP). Final Board action is anticipated in May of this year, with energy efficiency programs scheduled to commence in June 2021. According to the Proposal, the Board will ensure energy efficiency access for low-income communities; decrease energy burden; expand job opportunities; and increase economic development.
As chambers of commerce representing New Jersey’s African American and Hispanic-owned businesses— while we support the goals of the state’s energy efficiency transition, we urge the Board to increase investments in minority contractors— to ensure minority inclusion and to expand participation. Although energy efficiency is the fastest growing sector in the energy industry, few African Americans and Hispanics are included in the workforce, and few own businesses participating in the industry.
According to the American Council for an Energy-Efficient Economy (ACEEE), most businesses in the energy efficiency industry are small business enterprises, with the construction industry representing the vast majority of energy efficient companies— employing 91% of the workforce. These jobs include installation workers; technician or mechanical support; and sales, marketing, or customer service representatives. That said, “the construction industry, which accounts for the highest employment in the energy efficiency economy, has particularly large disparity ratios for African American-owned businesses” (emphasis added).
It is unclear why minority business enterprises (MBE) are excluded from the field— however according to the ACEEE report, the most common barrier is government preference to work with familiar and established companies. The report also cited lack of MBE awareness of specific opportunities.
Lack of MBE contracting has a direct effect on African American and Hispanic participation in the energy efficiency workforce. The 2020 U.S. Energy & Employment Report indicates that whites equal 77 % of workers in the industry, while African Americans and Hispanics represent 8% and 17% respectively.
Clearly, we can do better, and certainly if we are to achieve the objectives of economic development, the state must prioritize its investments in energy efficiency jobs and minority contracting inclusion. However, we must be willing to make the investments and incentivize New Jersey utilities to exceed identified targets.
Although the state has proposed to allow utilities to make investments needed for successful energy savings, jobs, and business growth, the Board must ensure that incentives are sufficiently layered to motivate maximum capital spend. But— utility investments should not result in higher energy prices for low-income consumers. To avoid rate spikes, utilities should be given the greatest ability to spread costs over time.
Investments of the type envisioned by the CEA and considered under the Proposal can provide needed opportunities for minority owned businesses in our state. The Board must commit to reverse the trend of minority underrepresentation in energy efficiency employment and business— and we must be willing invest now, particularly as New Jersey and the nation attempt to identify solutions to restart the economy.
John E. Harmon, Sr., IOM
Founder, President & CEO
African American Chamber of Commerce of New Jersey
Carlos A. Medina
President & CEO
Statewide Hispanic Chamber of Commerce of New Jersey