Says Ocean Spray is moving its Bordentown processing facility to Pennsylvania largely because of costs associated with the Regional Greenhouse Gas Initiative.
Diane Allen on Monday, May 9th, 2011 in a press release
Sen. Diane Allen blames Regional Greenhouse Gas Initiative for Ocean Spray’s pending departure from Bordentown facility
Editor's Note: This Truth-O-Meter ruling is the subject of a story found here.
Before Gov. Chris Christie announced plans in late May to withdraw from a cap and trade program, Republicans had added a new ingredient to the ongoing debate: cranberries.
In early May, Ocean Spray announced plans to close its Bordentown facility, where the growers' co-op makes beverages, and relocate operations to the Lehigh Valley in Pennsylvania.
On May 9, Republicans held a news conference and issued a press release to call for an end to the state’s involvement in the Regional Greenhouse Gas Initiative. Under RGGI -- or "Reggie" as it’s called -- energy companies buy allowances to comply with a cap on carbon dioxide emissions.
State Sen. Diane Allen (R-Burlington/Camden) cited Ocean Spray's move as an example of how the RGGI was hurting the state's businesses.
"As a former president and CEO of a small business, I can attest to the impact rising energy rates have on an employer’s ability to add jobs and expand," she said in a May 9 news release. "Just ask Ocean Spray, which last week announced it will be moving its Bordentown processing facility to Pennsylvania, in large measure due to the costs associated with RGGI."
PolitiFact New Jersey dug into her claim and quickly found it didn't have much juice: Five news articles and two TV segments about Ocean Spray's move didn’t mention any connection between the decision and RGGI.
We checked with Adam Bauer, a spokesman for the Senate Republicans, who said Allen’s comments were based on information she received from longtime cranberry grower Bill Haines Jr. According to Ocean Spray, Haines served on the Ocean Spray board of directors between 1996 and 1999, and then again in 2002.
Haines never called us back, so we asked Ocean Spray.
Company spokesman John Isaf said in an email that higher energy rates factored into the decision to leave Bordentown, but "not the RGGI program or its contribution to the rate."
The decision, he said, "was based on a variety of factors -- lower energy costs, improved transportation and distribution (warehousing/freight) logistics; proximity to supply chain partners and customers; lower labor costs; other utility cost advantages (water/wastewater/gas); and a more efficient and modern infrastructure and facility," Isaf said in the statement.
"While energy costs were one of several considerations that went into our decision, and NJ’s costs are significantly higher than other states, we were looking at the total rate paid, not the RGGI program or its contribution to the rate," Isaf said.
That's enough for the Truth-O-Meter, but we thought it was also worth exploring the senator's underlying point, that the cap-and-trade portion is driving up electricity costs.
Utility representatives and experts have an answer: not so much.
According to Karen Johnson, spokeswoman for Public Service Electric and Gas, which supplies power to the Bordentown area, the cap-and-trade portion doesn’t affect electricity bills very much for a customer in Ocean Spray’s rate class.
For the average customer in that rate class, the cap-and-trade portion -- meaning the cost of purchasing allowances -- accounts for 0.4 percent of the annual bill, Johnson said.
Judi Greenwald, vice president of Innovative Solutions at the Virginia-based Pew Center on Global Climate Change, said the effects of RGGI on utility costs have been mostly undetectable.
"The rate impacts have been miniscule and probably not even perceptible," Greenwald told us.
Across the 10-state region within the RGGI, the emissions cap accounted for between 0.24 and 0.61 percent of average residential electricity bills in 2010, according to a fact sheet prepared by RGGI. That impact represents 46 extra cents per month for a typical household’s electricity usage, according to the RGGI.
In many cases, electricity prices in New Jersey are based on bids submitted by suppliers in non-RGGI states, according to Peter Shattuck, a carbon markets policy analyst for Environment Northeast. For instance, if a supplier in Pennsylvania, which is not part of RGGI, sets the price, New Jersey utilities are not facing RGGI-related charges, he said.
So let’s review:
Allen claimed that Ocean Spray was leaving Bordentown "in large measure due to the costs associated with RGGI." Yet Ocean Spray said it did not consider RGGI and its impacts on the energy rate.
On top of that, a PSE&G spokeswoman and energy experts said RGGI has had a minimal impact on utility costs.
We rate Allen’s statement False.
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