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New Jersey Regulators Enable Major Progress on Energy Efficiency

June 10, 2020
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Washington, DC — A New Jersey Board of Public Utilities order issued on Wednesday sets the stage for the state’s utilities to implement far more ambitious energy efficiency programs that help households and businesses reduce energy costs.

“This order is a big win for ratepayers and the climate, because it will help cut utility bills and heat-trapping carbon emissions,” said Rachel Gold, utilities program director at the American Council for an Energy-Efficient Economy (ACEEE). “Now it’s up to the utilities and the New Jersey Division of Clean Energy to get the job done and deliver results.”

“The order is also great news for economic development in the state during the recovery from the COVID-19 pandemic, especially for the many small businesses that deliver energy efficiency services to families and other companies,” said Gold.

The board’s action stems from the state’s 2018 Clean Energy Act, which included provisions requiring utilities to help customers reduce electric use by 2% and gas use by .75% each year. The new order requires utilities and the state’s Division of Clean Energy to go beyond these goals and meet annual energy savings targets that ramp up to 2.15% of electric use and 1.1% of gas use in the fifth program year. It takes these steps to help them achieve that:

  • It defines a more central role for utilities to deliver energy-saving programs and shifts the state’s role to oversight and programs that require coordination with other state policy-led efforts;
  • It establishes a performance-based cost recovery mechanism to incentivize utilities to maximize the energy savings they help their customers achieve and to compensate utilities for lost revenue;
  • It sets a process for future updates and community engagement to ensure the success of energy efficiency efforts over time, including expansion of the Energy Efficiency Advisory Group to include working groups on workforce development; equity; evaluation, measurement, and verification (including codes and standards); and marketing.

“In the last few years, New Jersey has struggled to move out of the middle of the pack nationally on energy efficiency policy, but if the utilities are successful in implementing the order, that will change now, big time,” said Gold. “The commissioners and staff deserve praise for working to make a smart policy, especially during the pandemic.”

ACEEE previously submitted comments on draft proposals for this order earlier this year and provided technical assistance on these issues throughout the implementation process.

 

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