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State Fails to Participate in Program That Could Cut Energy Costs, Report Finds

The state is failing to take advantage of a two-year-old program that offers huge opportunities to significantly reduce energy costs without laying out any capital, according to an advisory group recommending changes in the draft Energy Master Plan (EMP).

For that matter, local school boards and governments are missing the chance to save on energy bills, reduce greenhouse gas emissions, and, perhaps most importantly, create well-paying jobs, the group said.

These lost opportunities result from a failure to take advantage of the Energy Savings Improvement Program (ESIP), a law signed by former Gov. Jon Corzine in 2009 that has yet to live up to its expectations.

No procurements to achieve energy savings have yet been made for any state building or facility, according to the report by the Clean Energy Fund Working Group, which is advising the administration on aspects of the draft plan.

“It is clearly a program that needs to be pursued more aggressively,’’ said Steven Goldenberg, an energy lawyer who chaired the group. “It pays for itself.’’ In some cases, the program can achieve energy savings exceeding 25 percent, he said.

This apathy toward the program, the report noted, is particularly troublesome because the state is expected to “lead by example’’ in curbing energy use, according to the EMP. Further, the program's lack of success undermines one of the key goals of the master plan: to significantly reduce the amount of energy used by residents, businesses, and the state itself over the next decade.

That goal likely will not be achieved unless the state and local governments get more aggressive about replacing aging equipment used to supply energy needs at various facilities.

“There appears to be a compelling and immediate need for state and local governments to upgrade critical infrastructure that has, in the passage of time, become inefficient, obsolete, or outlived its expected useful life,’’ the report said.

The law allows government agencies to enter into performance-based contracts with energy companies that allow them to pursue energy efficiency projects without any capital expenditures. The agencies pay off the projects over a 15- to 20-year period through the energy savings they realize.

That has not happened, the report said.

“While the opportunities and potential benefits presented by ESIP are considerable, the actual savings achieved to date have been modest at best,’’ the report said.

At the state level, the report blames the lack of participation on “unresolved procurement-related issues’’ between various state agencies.

In some cases the state has relied on short-term fixes, such as renting boilers and chillers (used to cool facilities or equipment) rather than investing in the replacement of the equipment. These temporary solutions, the report said, have continued for years, eventually costing more than simply replacing the equipment in the first place.

For instance, according to the report, some institutions have resorted to using refrigeration trailers to avoid building permanent facilities,.

Among its recommendations, the working group suggested that the New Jersey Board of Public Utilities (BPU) evaluate its staffing requirements and consider whether hiring additional people will help state and local governments increase participation in the program. It also recommended that ESIP projects be included in the Governor’s so-called Tool Kit," a program aimed at helping local governments reduce property taxes.

The report also suggested that the state target dollars to helping develop combined heat and power (CHP) plants at certain facilities. CHP is a cleaner and more efficient way to produce electricity and could be of particular value for hospitals and college campuses.

“To date, the ESIP implementation is a large missed opportunity for the state,’’ said Goldenberg, who also cited its significant environmental benefits in helping to reduce greenhouse gas emissions. New Jersey has aggressive targets for reducing emissions that contribute to global warming.

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