Agency Awards Contract to Firm to Oversee State’s Clean Energy Program

BPU hopes that three-year, $25 million contract will help make it easier, more efficient to award grants and incentives

Credit: Governor's Office/Tim Larsen
Richard Mroz, president of the state's Board of Public Utilities
After years of delay and litigation, the state has awarded a contract to a company to administer a program that helps residents and businesses reduce bills by cutting energy use and switching to renewable sources of energy.

The New Jersey Board of Public Utilities selected Applied Energy Group to manage the state’s Clean Energy Program at its monthly meeting on Monday. Applied Energy will operate under a three-year contract, worth approximately $25 million.

In selecting a single administrator for a program that oversees the expenditure of tens of millions of dollars each year, the agency hopes to streamline the process of awarding grants and incentives, which was previously handled by three contractors, including AEG.

Michael Ambrosio, a former executive director of the BPU, has served as program administrator of the state’s Clean Energy Program and is a senior vice president of AEG. The other contractors were Honeywell International and TRC Energy Services, which served as market managers in the program.

After AEG won the bidding for the contract two years ago, TRC and Honeywell contested the award citing favoritism and potential conflicts of interest. The state Treasury Department decided to rebid the contract and AEG once again was selected as the winner.

The rationale behind scaling back is that a single administrator would lead to cost efficiencies, afford more flexibility, and allow quicker response to market conditions, according to a special working group that first recommended the consolidation several years ago, a recommendation adopted in the state’s Energy Master Plan.

“We’re certainly happy it’s come to fruition,’’ said Steven Goldenberg, an energy lawyer who chaired the working group. “We’re confident in concentrating the duties in one entity we’ll get cost efficiencies.’’

The current regulatory structure has drawn criticism for creating undue customer confusion and project delays.

“The board’s work to reorganize New Jersey’s Clean Energy Program will offer ratepayers an improved experience and streamlined program offerings,’’ said BPU President Richard Mroz.

In addition to administering the overall program, AEG will be responsible for assisting the board’s staff in preparing a strategic development plan to move from one involving incentives and rebates to new, market-based programs.

The Clean Energy Program is funded by a surcharge on customers’ gas and electric bills, raising hundreds of millions of dollars annually, a large chunk set aside for programs to promote more efficient lighting and less energy-intensive appliances, furnaces, and air conditioners — as well as programs to develop various renewable-energy technologies.

It has been hampered in recent years, however, by accumulating large surpluses that have been diverted to plug holes in the state budget by Gov. Chris Christie and the Legislature. That has led to a scaling back of some programs as more than $1 billion in funds have been siphoned off.