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Insider NJ is committed to giving serious political players an interactive forum for ideas, discussion, and insight.

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♪ David: Welcome to Chat Box.

I am David Cruz.

heading into the final full month of primary season with the entire assembly in the governor's office being contested.

All of that in the context of a summer of rising utility rates, which we will discuss in our second half today.

And not to mention a pending transit strike and one might ask is this the time to be running for governor?

Our first guest says yes, a former helicopter pilot, prosecutor and member of Congress, we will come back representative Sherrill, hello.

Representative: thank you for having me.

David: Say you become governor, do you get the keys to the state, the police helicopter and then apply yourself around?

You could probably do that.

Rep. Sherrill: That would be great.

I have a feeling no, but it would be awesome.

David: I have a feeling it is a no also.

The next governor, as I said, will face challenging times.

Quite challenging across the country even.

If the fight is as Democrats insist against Donald Trump, why would you leave the house, isn't that the more significant battle for Democrats?

Rep. Sherrill: I think the fight is two tiered, I think it is against Donald Trump, but it is also for the future of New Jersey, and so I have four kids, and I have to tell you that that fight for the future is really important.

And I think it takes place in the states.

I think it is the state governors who have the executive power to truly take the fight to Donald Trump.

And it is not just cuts to Social Security or the Department of Education and what it would do to our state, it is not just having a strong Attorney General as I would fight back over what is going down in Washington that is harming New Jersey, but it is also fighting for the people of New Jersey, driving down housing and utility and health care costs, making sure every kid in our state has access to a great education and creating opportunity because the number one thing that Trump seems to be doing is shutting down opportunity everywhere, sort of creating this system where you climb the ladder and then you pull it up behind you and nobody else has access to success.

And that will be right here in New Jersey.

David: How do you fight Trump?

What does that mean?

are you going to stop ICE, defy orders to do something that you think is not in the state best interest?

What form or shape does that fight take?

Rep. Sherrill: I would echo Governor Mills, we are going to follow the law and Constitution, and that is very different from what Donald Trump is doing.

I think it is going to involve a several tiered plan, starting with ensuring that we are holding him accountable, that we are banding together with other strong governors to bring cases to him, realizing strong Attorney General, bringing cases.

For example, that would look like if he's not going to find the Department of Education as Congress has told him to do, if he's not going to fund Medicaid and Social Security, then he should send our federal taxes back to us.

He should send them back either in a block grant or other way so we can run program sees failing to run.

David: Let me dig into a couple of things closer to home, the state budget, $58 billion, the largest ever.

It is dependent on one shots, a couple billion surplus, federal cuts looming.

The budget chair says that new taxes and fees governors are producing our D.O.A.. What would governor Cheryl do in a worst-case scenario where there are Draconian federal cuts that impacts the budget?

What are you saving and sacrificing?

Anchors to the corporate transit fee, how do you fill those gaps in the budget if the worst happens summer -- happens?

Rep. Sherrill: We have to call back federal funding, if you suggest what cuts are you anticipating, if we are talking $880 billion of cuts to Medicaid, as has been proposed, that hits about half New Jersey state budget.

About one in three children are on Medicaid.

Nursing homes across the state are being run through Medicaid dollars David:.

So what does -- David: So what goes?

Rep. Sherrill: We have to claw that federal money back.

That is our money that we have sent to administer these programs.

If they won't administer them, they have to send it back.

I what do we have to do beyond that?

I cannot say it enough, we have to build more houses.

We have some of the second-worst inventory in the nation, prices on housing had up 50% in the last five years.

It is unaffordable for anyone who did not get into a home pre-COVID.

So we have got to build more, and that involves her immediate and commercial properties, that involves looking at places like Port Monmouth and rebuilding housing stock there, and it involves enough cases at -- that involves looking at places like Trenton.

It is close to transit with a ton of opportunities, centrally located in the state with job opportunities, so let's push there, and, unfortunately, the plan we have now to build out housing is not going to get New Jersey the housing it needs.

David: We talked to Jack Ciattarelli, running on The Other Side.

He says he supports affordable housing but limited to the state's urban areas and not in suburban New Jersey, shouldn't everybody kind of have affordable housing?

Rep. Sherrill: I don't think any of his plans are going to create opportunity.

I think he is totally focused on doing whatever Trump tells him to do.

I think he is dangerous.

And when he was planning to cut Planned Parenthood, it would be harmful to rights and freedoms.

I told people that he broke land speed records to get to Bedminster to kiss the ring of Trump and Elon Musk yet has said nothing about cuts to Medicaid or nothing about cuts to the Department of Education or proposed cuts to Social Security because he does not want to upset Trump, and he would just like to do his bidding.

David: I will take that to mean they disagree with him on that?

Rep. Sherrill: I disagree with him on how we are going to build out housing, and we have opportunities and accessory dwelling units, opportunities in places like some of the outline areas of Trenton and Port Monmouth.

So we are only going to build affordable housing and urban areas sounds very odd.

David: Are you all in on making the full pension payment every year?

Rep. Sherrill: I think when we look at our budget now, part of the reason we are in such great disarray is because this pension payment has been kicked down the road for so long, so you have a pension fund that we are paying about $7 billion a year into, and New York runs a larger pension fund, paying $1.5 billion, so if we don't address this now, we are just mortgaging the future for our children.

Yes, I'm really committed to making sure we are making our pension payments.

David: We had the senator on the show talking about utility rates, trying to untangle that crazy mess of acronym agencies.

It was basically electricity bills.

It is a complicated issue, except for ratepayers who are stuck with the bill.

How much have you been watching this issue and what can I governor do to help alleviate the crunch?

Rep. Sherrill: I have watch this closely.

When you look at the difference between our grid operator and how long it takes them to hook up power to the grid and how little clean sheet power they have hooked up to the grid and you -- compare it to the grid operator in Texas, the largest solar utilizer in the country, and they are doing it because it is so cheap, and how quickly you can move in Texas to hook this to the grid, you see a disparity.

I have to tell you that as a governor, I withhold PJM accountable, much like you see them doing.

Working with Josh Shapiro, also holding PJ unaccountable so we can have a better outcome in our region because this is unacceptable, and it is not only households with huge increases, but if you are going to start to see businesses move away if they have such high utility costs, I'm firmly convinced when you look at AI, Quantum, when you look at electric vehicles, when you look to the future, it is going to be the states that can solve the energetic can solve the energy needs of the future, driving power to the grid, having the amount of power we need while at the same time driving down costs for consumers and input.

The state that does that is going to be the state that owns innovation in the future, and I as governor will be committed to making sure we are that state.

David: One more question.

Your opponent, Ras Baraka, made a big show of criticizing the state Democratic Party and its suppose it preferred choice, mainly you, for being tone deaf and out of touch on issues like affordable housing, segregated schools, disparity and minority contracts with the state.

You don't want to call yourself the establishment candidate, but you have the support of elected officials and county organizations, the machine, whatever you would like to call it, there is a certain anti-establishment sentiment running for your party, particularly this year and last.

Do you feel like you have to walk a fine line between enjoying the benefits of party backing while demonstrating the independent streak?

Rep. Sherrill: I have always built up broad coalitions of people with grassroots support, with labor support, with people who have been disinfected with the party.

When I ran my first race in 2018, it was largely the grassroots that had made the 11 district -- put the 11th district in play.

I have always had to build a broad coalitions.

I never simply relied on Democrat parties.

David: It is different now, you have all the bosses seem you are the candidate.

Rep. Sherrill: I have worked hard to build Democratic Party support.

I really worked hard on grassroots support, I have been out to every right to listen to people.

In fact, I had two farms -- forums in Montclair last week.

I'm really proud of that.

To the point about some of the criticisms, I was a little surprised to hear them because I have said time and again, we have problems with structural racism in the state and the country.

I talk about how much as governor I would like to address our segregated school systems and how much of an affront that is to the state that we have some of the most segregated schools in the nation.

A lot of my affordability agenda is to create opportunity for everyone in the state because I think for far too long, we have not addressed that.

So I agree.

We have a lot of work to do to ensure every skill person in the state has accessed opportunity.

David: Got to leave it right there.

Mikie Sherrill, Democrat for governor, good to see you.

Appreciate your time.

Thank you.

Rep. Sherrill: Thank you for having me and have a great day.

David: Summer is coming, and you will want to blast the AC at some point soon, but as a lot of you know, Is when utility prices spike for most of us, just in time, why is this so, who can we blame and he will do something about it?

Here to answer those questions and more is Senator Andrew Zwicker, greetings.

Senator: Thank you for having me.

David: We figure a guy studies the laws of the universe was best qualified to explain this tangled mess Sen. Zwicker: -- tangled mess.

Sen. Zwicker: Maybe you could understand laws of the universe, perhaps, but understanding how prices are set New Jersey is a complicated matter.

I will do my best.

David: Let me start.

Most people are unaware of how the DPU interacts and howJCPNL set their rates, let's of public utilities.

What do they do?

Sen. Zwicker: They do exactly what it sounds like they do, which is they are in charge of regulating public utilities and that includes everything from working utilities to ensure the lights stay on to ensuring that programs to help low income residents pay utility bills are funded adequately.

They also work with PJM, the regional -- David: What does that stand for?

Sen. Zwicker: Pennsylvania New Jersey Maryland, three of the original states but there are 13 in total.

The idea is that if we all pull together, in principle, then we can drive electrical rates down.

So this organization is responsible for giving the generation of electricity onto the grid and transmitting it to New Jersey.

David: So they conduct these things called energy auctions.

Can you explain those and how did they get out of whack this year?

Sen. Zwicker: Yeah, so what they do is they say, OK, let's look at what we think is all of the energy across the region, how much do we need?

And then they have an option where they ask all of the power generators, the people who are making electricity, whether that is natural gas, solar, wind, coal, whatever it might be, to put in bids for what they would like to charge for the electricity.

What is astounding is that in one year, the average price that they offered went up by almost a factor of 10.

Not 10% or 50%, not even 100% but a factor of 10 in one year, and that is what is driving the rates increase that you talked about in the introduction.

David: This is something the governor recently sent a letter to another federal agency -- I don't want to give their acronym because we are overwhelmed with them right now, but the governor would like the feds to investigate whether there was some market manipulation of these auctions?

Sen. Zwicker: You have to ask, how is it going by a factor of 10 in a single year?

Inflation is hurting pocketbooks but that is not going up by factors of 10.

So the governor wrote a letter to the federal oversight of all a it saying what is going on?

Also, he is asking that they change their roles, and that is something that I brought up because the rules are what is artificially causing the price increase.

It will save New Jersey households $400 a year as opposed to right now having rates go up by $300 a year.

David: You are getting me more and more angry by the minute.

So, my question is, where is the market?

I think people assume that they make the electricity and sells it to me and you and we pay them every month but that isn't right, is it?

Sen. Zwicker: So, we changed New Jersey decades ago how energy is made and transmitted and distributed to our homes.

Most of the utilities no longer are generating any energy at all in New Jersey.

Public service through a different part of their organization does run some of our nuclear power plants.

But the rest of utilities make no energy at this point at all, which means we need to, whether it is built for solar, and at one point talked about building wind and we do have natural gas not owned by utilities, or we have to import the rest of them.

David: That made sense at some point?

Sen. Zwicker: Decades ago, utility points were increasing rapidly.

The idea was that there was concern that there was too much of a monopoly, that too few organizations and companies were controlling energy prices, so the state made a decision to break all of that app.

At the time, it made sense Andy Dick keep energy prices down.

-- and it did keep energy prices down.

So it is working back and did not work today, and we have to figure out a short-term fix and to make sure it doesn't happen in years ahead.

David: Rather than whoever was generating the power at that time and selling it, rather than just going 1, 2 or three companies or whoever it was, it is now a bunch of different companies that create a pool of energy that PJM sets a price point for and distributes, yes?

Sen. Zwicker: That is correct.

David: I kept hearing during these hearings that we also import more energy than we send out when the opposite used to be true.

Sen. Zwicker: Correct.

Part of that has to do with the fact that we closed one of our nuclear power plants because the company decided they were no longer economically feasible to keep it open.

Part of it is that we broke up a monopoly and so Governor Murphy had proposed when he first came into office in 2017, to see if we can't generate enough electricity with offshore wind power millions of homes.

Obviously, for a variety of reasons, both economics and the trump administration, that answer is now on hold, but things have changed dramatically.

At the same time, in your opening, you talked about the fact that summer is soon here.

Every single year, our summers are hotter than the year before.

Air-conditioned is becoming not just a necessity but a basic need.

It is a concern at this point with brutally hot summers happening.

We are seeing the need for electricity increase.

It is not just that we move the pattern generation out of the state but this PJM organization has created rules -- and this drives me nuts -- there are thousands of projects, powergenerating projects that are waiting for years to get approval to connect onto the grid.

If we just allow those to come on and if they change the rules, then our electrical rates would be going down.

Even more upsetting is about 90% of them are clean, renewable energy.

Without any greenhouse gas emissions.

David: So the increases for a few months or whatever is being proposed by the legislature?

But that isn't a solution because we just had to pay that couple of months down the road.

How are you all going to get the rates down?

What power you have?

Sen. Zwicker: Right.

A couple of different things.

The governor wrote that letter.

We are in the middle of the budget committee and we are looking at all the budget negotiations about what money may be available to try to at least in the short term provide some rate relief for New Jersey homeowners and New Jersey businesses.

And in the longer term we can do a couple of things.

We can authorize and update our electrical grid and I'm getting ready to propose a legislative package to change the wiring so we can push more electricity through the existing wires, and as we said, everybody turns on their air-conditioning, we would like to make sure the grid can handle this increased demand.

Then we have to do everything we can as a state to push PGM to change their roles, and the fastest way to fix this is to allow those thousands of projects, including right here in New Jersey, to get onto the grid.

And then in the longer term, we have got to look at how we can start to generate more power here New Jersey.

David: Why are these other projects not being allowed to join the fund?

Sen. Zwicker: A variety of reasons.

One of them is that PJM has rules that favor large fossil fuel power generation and the thousands of clean energy, solar and power projects are smaller ones that cumulatively are the equivalent of hundreds of new power plants, so they have not adopted their rules fast enough.

The review periods are much too long.

The federal oversight committee has told them they have to change the rules.

They still have not done it.

That is the quickest way while we work at how we are going to build more electrical generation here in New Jersey.

David: How do you change the law on this generation versus selling?

Is that something you all have talked about?

Sen. Zwicker: It is not a state law.

Let me answer your question, you're talking about changing the law -- David: Who can generate and who can sell?

Sen. Zwicker: In the hearings you referenced, we started talking about would we like to change the rules about who can generate power and electricity in New Jersey?

But we have to be careful because decades ago, when that is what we had in place, rates were rising rapidly.

Solino where we have a knee-jerk reaction where we say let's go back to the way it was because that will make it better.

It is different in how we approach this because in the end, we have to make sure there is enough electricity on the grid to meet the demand and that it is affordable for everybody.

David: On that note, Senator Andrew with the -- Andrew Zwicker, I don't know if you fixed it all, but good to come and try to clear this up.

Good to see you.

Sen. Zwicker: David: David: Thank you.

A program he notes that next week we are presenting a special one-hour addition of Chat Box, conversation with the Republican candidates for governor, live Wednesday, May 7 at 7:00 p.m. on NJPBS and streaming on YouTube.

We are working with our partners at WNYC radio so the great Michael Hill will join us.

No opening statements, no time clocks, just real talk, live on Wednesday night at 7:00 Kieron NJPBS and streaming on YouTube.

-- 7:00 p.m. on NJPBS and streaming on YouTube.

Thank you tom for joining us -- to Mikie Sherrill for joining us.

We are on blue sky now.

Subscribe to NJ Spotlight News YouTube channel to see with the rest of the team is up to.

I am David Cruz.

for all the crew at Gateway Center in downtown your work -- downtown, thank you for watching.

See you Wednesday.

Announcer: Major funding for "Chat Box with David Cruz" is provided by the members of the New Jersey Education Association, making public schools great for every child.

Promotional support is provided by Insider NJ, a political intelligence network dedicated to New Jersey's political news.

Insider NJ is committed to giving serious political players an interactive forum for ideas, discussion, and insight.

Online at insiderNJ.com.

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