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State Energy Efficiency Policy Database

New Jersey

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Summary

Since 2003, the Office of Clean Energy within the Board of Public Utilities has administered the New Jersey Clean Energy Program, which has offered statewide customer energy efficiency programs. 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 electric programs have been successful in generating significant savings. However, portions of the state’s societal benefit charge (SBC) have been re-allocated to pay state energy bills in recent years, reducing potential energy efficiency programming.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


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. Prior to 2003, utilities were required to administer and implement energy efficiency programs with oversight from the BPU.

In 2002, the New Jersey BPU began a re-assessment of this administrative structure and 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. That same year, program administration was turned over to the Office of Clean Energy. Today, investor-owned utilities are still responsible for collecting the Societal Benefit Charge (SBC) for the programs, but then transfer these funds to a third-party fiscal agent supervised by the Board of Public Utilities. Individual energy efficiency and renewable energy programs are offered statewide to electric and gas customers of the public owned utility companies.

The state’s societal benefit charge has repeatedly been reallocated away from energy efficiency programming. In both 2012 and 2013, Governor Christie used a portion of the state’s Clean Energy Fund to pay state energy bills.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

New Jersey set energy savings goals of 20% savings by 2020 relative to predicted consumption in 2020 in its Energy Master Plan of 2008. However, these goals are advisory and lack consequence if they are missed. Utilities have not formulated any plans to achieve intermediate targets. Furthermore, the state’s clean Energy Funds have been raided to fill budget holes in the past, demonstrating the uncertainty surrounding energy savings targets.

The BPU has yet to pursue a binding EERS that would require each electricity supplier/provider to meet energy efficiency goals. Although they are required to submit individual energy master plans pursuant to the New Jersey Energy Master Plan, these have been delayed indefinitely


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August 9, 2013


Alternative Business Models

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, were extended through 2013 in a later Order (See BPU Docket Nos. GR05121019 and GR05121020).


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

In New Jersey, traditionally, there were third party “Market Managers” selected by the NJ Office of Clean Energy (OCE) to run the energy efficiency programs in New Jersey. These Market Managers were eligible to receive a performance incentive, however in 2011, the OCE requested that the Market Manager significantly reduce their budgets and eliminate their performance incentive (Docket Nos. Eo07030203 and Eo10110865).


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August 9, 2013


Energy Efficiency as a Resource

New Jersey's restructuring statute requires that utilities perform “comprehensive resource assessments” for energy efficiency and renewable energy resources. These assessments account for system needs and costs.


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August 13, 2013


Evaluation, Measurement & Verification

The evaluation of ratepayer-funded energy efficiency programs in New Jersey is not formally required but it is recognized that it is highly desirable and the Board approves an annual evaluation budget in an Order adopting annual program plans and budgets. Evaluations are administered by the both the utilities and the NJ Board of Public Utilities. New Jersey has formal requirements for evaluation articulated in 2010-2011 Evaluation and Research Plan and Protocols to Measure Resource Savings\Revisions to December 2009 Protocols. Statewide evaluations are conducted. New Jersey uses all of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/ProgramAdministrator (UCT), Participant (PCT), Social Cost (SCT), and Ratepayer Impact Measure (RIM). New Jersey does not have a primary cost-effectiveness test that it relies upon. The benefit-cost tests are required for total program and customer project level screening. New technologies must pass benefit cost screening at the measure level. The rules for benefit-cost tests are stated in BPU Docket No. EO08030164.


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August 21, 2013