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Summary
Since 2003, the New Jersey Clean Energy Program has offered statewide customer energy efficiency programs and has been administered by the Office of Clean Energy within the Board of Public Utilities. Prior to this, the regulated energy utilities in New Jersey had been responsible for administering electric and natural gas efficiency programs. A collaborative of stakeholders, called the New Jersey Clean Energy Council, provides input to the Board of Public Utilities on programs.
New Jersey utilities spent $95.9 million on electric efficiency and $90.1 million on natural gas efficiency, saving 242,270 MWh and 453,557 Dekatherms in 2007. |
| Customer Energy Efficiency Programs |
Energy efficiency and renewable energy programs in New Jersey are administered by the Office of Clean Energy within the Board of Public Utilities (BPU) under the New Jersey Clean Energy Program. Under New Jersey's restructured electric utility industry prior to 2003, the utilities were required to administer and implement energy efficiency programs with oversight from the Board of Public Utilities. The utilities worked together through a collaborative to coordinate their efforts and ensure program consistency. This approach was taken for the initial "Comprehensive Resource Analysis" (CRA) period—2001–2003—and was the result of the BPU’s Final Decision and Order on the CRA proceeding, issued March 9, 2001. In this order, the BPU directed the utilities to administer the energy efficiency and renewable energy programs jointly.
In 2002, the New Jersey BPU began a re-assessment of this administrative structure. In 2003, the BPU established the New Jersey Clean Energy Council as advisors to the BPU. The council provides planning assistance for the administration of the programs. It also was charged in this initial order to work with BPU staff to assess components of the programs and make recommendations based on the findings. The BPU decided in 2003 to revise the structure of program administration and implementation. The BPU chose to give responsibility for program administration to the Office of Clean Energy—an office within the BPU that administers the New Jersey Clean Energy Program. The utilities are still responsible for collecting revenues for the programs, but they transfer these funds over to a third-party fiscal agent supervised by the Office of Clean Energy. Utilities use third-party market managers to implement their programs.Individual energy efficiency and renewable energy programs are offered statewide, with each utility providing program services to its customers.
New Jersey electric utilities reported efficiency program savings of 242,270 MWh and in 2007. In 2007, natural gas programs saved 453,557 Dth.
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Energy efficiency programs are funded by a systems benefits charge assessed against all investor-owned electric and natural gas utilities. The SBC is a non-bypassable fee assessed by the energy utilities at the point of use for both natural gas and electricity. The state spent $90.1 million on natural gas efficiency programs in 2007 and $82.4 million in 2008. According to the Energy Information Administration, New Jersey electric utilities spent $$95.9 million on energy efficiency in 2007.
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| Energy Efficiency Resource Standard |
Legislation passed in June 2007 authorizes (but does not require) the Board of Public Utilities (BPU) to adopt an electric and a gas energy efficiency portfolio standard with goals as high as 20% savings by 2020 relative to predicted consumption in 2020. New Jersey is working on two sets of energy-saving goals---one as part of contracting with the state's Clean Energy Program and another that would apply to each electrical energy supplier. As part of the contracting process for management of programs, the BPU projected that 2008 programs would save 547 GWh - or 0.67% of 2008 sales. Incentives are provided for meeting these goals, with greater incentives for achieving 120% and 140% of the goals. The BPU has yet to pursue a binding EERS that would require each electricity supplier/provider to meet energy efficiency goals.
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On October 12, 2006, the New Jersey Board of Public Utilities (BPU) approved requests by New Jersey Natural Gas Co. and South Jersey Gas Co. to replace their existing weather normalization clauses (WNC) with a conservation incentive program (CIP) that would capture gross margin variations related to both weather and customer usage. (Weather normalization clauses mitigate the financial effects of weather on utilities and their customers.) The three-year pilot programs, which were initiated outside of a base rate case, apply to residential and most commercial customers. The decoupling mechanisms include new conservation programs that will be funded by the companies. (Decoupling reduces the financial disincentive for utilities to support energy efficiency by separating utilities’ profits from their levels of sales.) Additional programs are expected to be added during the three-year pilot. The BPU may extend, modify or terminate the program at the end of the three-year pilot. If the program is not extended, the WNC program will be reinstated. BPU Docket Nos. GR05121019 and GR05121020.
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| Reward Structures for Successful Energy Efficiency Programs |
As described above under the "Energy Efficiency Resource Standard," the contractors selected by the Board have performance goals and rewards built into their contracts.
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| Energy Efficiency as a Resource |
New Jersey's restructuring statute requires that utilities perform “comprehensive resource assessments” for energy efficiency and renewable energy resources, which account for system needs and costs.
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Last Updated
11/11/2009
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