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NJ Municipalities Cash In On Energy Efficiency

Federal stimulus funds help local governments cut costs by cutting energy usage.

With local governments facing another year of belt tightening, many towns and counties are banking on cutting their energy bills by undertaking a wide range of energy efficiency projects.

Tapping into a pool of federal stimulus money earmarked for energy efficiency, 494 local governments, including a handful of county governments, have applied to the state Board of Public Utilities (BPU) to do energy upgrades at their facilities.

That represents about 90 percent of the 512 municipal and county governments eligible to participate in the program, called the Energy Efficiency Conservation Grant block program, according to Greg Reinert, a spokesman for the BPU. The towns and counties are eligible to receive up to $20,000 from the federal stimulus program, which can be supplemented with money from the New Jersey Clean Energy Direct Install program.

To date, based on the grants already awarded, the average governmental entity is expected to reap savings of approximately $18,000 annually on their energy bills through upgrades, such as improving their heating, air conditioning and ventilation systems or retrofitting lighting in buildings, Reinert said.

"What makes these energy efficiency programs so advantageous is that little or no matching funding is required," said BPU President Lee Solomon. Additionally, a county or municipal government, can, in many cases, fully fund the energy efficiency projects by combining federal grants with financial incentives from New Jersey’s Clean Energy program, according to officials.

That’s what the township of Millburn did.

Millburn’s total project cost of $52,567 includes upgrades to lighting and HVAC systems in the municipal building. With a Direct Install incentive of $31,540 and a $20,000 federal grant, the project has a net cost to the township of $1,027, which it expects to recoup in less than two weeks. Overall, the township expects to save $63,000 on its energy bill each year after the upgrades.

Under the state’s energy master plan, New Jersey has set a goal of reducing its energy consumption by 20 percent by 2020, a target many officials say may be difficult to achieve. New Jersey’s clean energy program is funded by a surcharge on customers’ gas and electric bill, although there is some talk of scaling back that program.

The deadline for applying for grants from the federal stimulus program expired on December 31, 2010, according to Reinert. Local and county governments that have applied for funding will now have to use state-approved contractors to draw up work plans to undertake the energy efficiency projects, Reinert said. Under the federal law, the money has to be allocated to the governments by the end of March, he said.

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