Commercial Outfits Could Get Big Break on Energy Efficiency Projects

Tom Johnson | October 18, 2012 | Energy & Environment
New program lets companies earn credit against oversized surcharges on power bills

The state is moving to allow large commercial and industrial facilities to offset huge surcharges on their gas and electric bills to pay for projects to reduce energy use.

The program, established under a law signed by Gov. Chris Christie in January, would allow certain large energy users to establish a credit against their so-called Societal Benefits Charge (SBC) to pay up to one-half of the costs incurred for purchase and installation of energy efficiency products and services.

The surcharge is a long-running sore point for businesses, particularly those using a lot of electricity and gas, amounting in some cases to more than $1 million a year. The money funds a variety of programs, but most prominently New Jersey’s clean energy program and a low-income energy assistance program.

Even though the state’s business community funds about 63 percent of those costs, corporate lobbyists say their members get short shrift when it comes to dispensing funds to reduce energy consumption. The state’s Energy Master Plan also noted that for every dollar invested in energy efficiency projects in the commercial and industrial sector, the return is $11, compared to a $4 return in the residential sector.

The master plan advocates a 17 percent reduction in energy consumption in New Jersey by 2020.

While the measure is backed by business interests, consumer advocates are opposed because they fear it might spike costs to residential customers if a big chunk of the SBC-funding was diverted back to commercial and industrial customers.

The impact of the surcharges on residential customers’ bill currently runs about $22.39 a year; for midsized commercial and industrial customers approximately $4,231.52 annually; and for larger commercial and industrial facilities at least $11,763 each year.

The state Board of Public Utilities plans to hold a stakeholders’ meeting next Wednesday to discuss a straw proposal to implement the law, but some corporate lobbyists are worried it could prevent their clients from participating in the program, as currently drafted.

“In concept, it’s a good idea because it will provide large commercial and industrial customers with some relief,’’ said Steven Goldberg, an attorney who represents the New Jersey Large Energy Users Coalition, a group representing pharmaceuticals and larger manufacturers.