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Gov. Murphy Continues Christie Corporate Subsidies

May Day Message: Murphy Embraces Same Race To The Bottom

Murphy Needs to Rescind The Same Energy Subsidy Deal To BL England Plant 

I’ve been noting how, thus far, Gov. Murphy – a self proclaimed bold green leader – while changing course on climate and energy policy, is continuing many of Gov. Christie’s environmental policies, particularly DEP regulatory policies, see:  Gov. Christie’s Executive Orders That Weakened Environmental Protections Are Still In Effect

I see similar continuity – and less contrast – in former Wall Streeter Murphy’s economic policy, based on recent news: BPU GRANTS SAYREVILLE STEEL PLANT DISCOUNT ON ENERGY BILL.

Gerdau Steel is getting a discount beginning tomorrow on its energy bill, savings that could help the Sayreville steel plant stay competitive with rivals.

The state Board of Public Utilities has granted the only active steelmaker in New Jersey a 50 percent reduction of a surcharge on its energy costs, which amounts to about $1.5 million annually, according to Gerdau.

The Gerdau Steel deal shares the same fundamental premises of former Gov. Christie’s Neoliberal economic policy: corporate subsidies, concessions to corporate blackmail of threats to relocate jobs, and a war on the public sphere: all things public and social.

That Christie-Murphy policy starves the public of resources to address social needs while further concentrating private corporate wealth and power.

The levy, dubbed the societal benefit charge,(SBC) is used to fund a variety of programs, including clean-energy initiatives, a low-income energy assistance effort, the cost of nuclear decommissioning, and cleanup of former manufactured-gas sites. The surcharge has been imposed on customers since the state broke up gas and electric monopolies. It falls most heavily on businesses that use a lot of energy.

It is part of the Neoliberal agenda to dismantle government, erode labor power, and maximize corporate profits.

Like Christie, Murphy sees public subsidies as necessary to sustain corporate profits (which are masked by the slogan “competitiveness”) a flawed view of the real causes of job loss, which have far more to do with US firms: 1) failure to invest in and modernize US plants, 2) exporting US manufacturing jobs to low wage and slave labor third world countries with few if any pollution control requirements. 3) Technology is the other major driver of “deindustrialization”, as automation and efficiency displace labor.

Gerdau Steel is a global corporation based in Brazil. They operate in 14 countries. They have no loyalty to NJ, the US, or US workers and communities.

Many economists criticized President Trump’s steel tariff’s as a blunt policy instrument and ineffective approach to protect US domestic manufacturing jobs. But they are predicted to increase the price of steel and US steel manufacturers’ corporate profits.

So, if Trump already bailed out the US steel industry with tariff protections, why do they need more NJ BPU energy subsidies?

My sense is that Wall Street financier Murphy thinks his “targeted” subsidies are a sharper policy tool and better approach than Trump’s blunt across the board tariff approach.

But from what was reported, the Murphy BPU subsidies do not require any capital investments or labor training, or corporate profit concessions at the Sayreville plant that would increase long term productivity and real competitiveness.

It is unlikely that the subsidies will provide enforceable mandates to keep the plant operating in NJ – they could shut down and leave, based on corporate decisions made in Sao Paulo, Brazil.

And by lowering the cost of energy, the BPU removes incentives to make the energy intensive plant more energy efficient and reduce its carbon footprint, which directly contradicts Gov. Murphy’s pledge of climate leadership.

Murphy tried to mask this obvious contradiction by excluding the clean energy portion of the SBC from the deal. But that’s just rhetoric and lipstick on a pig.

If Wall Street corporate Democrat Murphy were a true progressive, he’d be talking to economist Richard Wolff and forming a policy to promote worker cooperatives. If the Gerdau corporation is not making sufficient profits, why not sell the plant to the workers? Where are NJ unions in advocating real progressive policies like professor Wolff outlines?

Finally, the elimination of SBC surcharges to subsidize corporate profits has been done before.

In another continuity with Christie policy, news reports fail to mention the fact the BPU exempted the BL England power plant from both RGGI and SBC levies. As we wrote:

Here are some of the benefits of that lobbying, worth hundreds of millions of dollars granted by Christie controlled state agencies:

1.In an April 29, 2013 Order, BPU quietly granted huge tax breaks and subsidies to the Rockland Capital BL England Plant:

Source: BPU Order

2. This BPU Order also provided secrecy to cover up the amount of huge ratepayer subsidies to Rockland Capital.

I don’t recall any news reports about these subsidies.

And I don’t recall Rate Counsel Brand publicly raising any objections to these subsidies.

So, now I’m curious abut how widespread these corporate subsidies as waivers to the SBC charges is – did BPU waive SBC for all those new natural gas power plants Christie pushed through?

Can they be rescinded? Will Gov. Murphy rescind them?

Can the media ask BPU these kind of questions?

End note: here’s a challenge for a real investigative journalist:

When did this deal begin?, i..e when was the deal first presented to BPU? Is it a Christie proposal?

This is pure speculation, but there could be fingerprints of the NJ based Hugo Neu corporation on this deal. Connect the dots of Wendy Neu, who sits on the NRDC Board and was on Murphy’s Energy/Environment Transition Team. She also is a major Democratic donor, and friend of Gov. Murphy’s wife Tammy, a “promoter of policy” in the Murphy administration. Curiously, Tammy, a former George Bush Republican, was recruited by Al Gore to The Climate Reality Project. So, with NRDC and Gore connections, this deal could be Tammy inspired.

Are there any corporate or financial ties between Hugo Neu and Gerdau? Did Wendy whisper in Tammy’s ear, directly or through NRDC or the Murphy Transition Team?

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