PSE&G Looks to Extend Popular Energy Efficiency Program

Tom Johnson | March 7, 2017 | Energy & Environment
Initiative helps hospitals, local governments, multifamily houses use less energy to reduce electric and gas bills — would also add smart thermostats

At JFK Medical Center in Edison, workers maintain one of two new energy-efficient air-conditioning chillers installed at the facility.
Public Service Electric & Gas is seeking to continue a popular program that helps hospitals, local governments, and multifamily housing units reduce their electric and gas bills by using less energy.

In a filing Friday with the Board of Public Utilities, the state’s largest utility is seeking to spend a total of $95.3 million on an extension of its energy-efficiency program, along with a new pilot to install smart thermostats in residences.

The request, a fairly modest filing compared with typical programs sought by PSE&G, would expand a current initiative to cut energy use, a prime goal of the state’s Energy Master Plan and one that helps drive down costs for consumers by reducing electricity and gas use.

PSE&G has been the most active utility in New Jersey to spend on energy efficiency, investing almost $400 million in various programs to help curb the use of electricity and gas. PSEG executives often talk about the need to revamp ratemaking to incent more investments in energy efficiency.

The current initiative would invest $74 million, if approved by the BPU. The bulk would go to its existing hospital efficiency program ($25 million); multifamily housing program ($20 million); and Direct Install ($15 million), which helps government agencies and nonprofits reduce energy costs by providing expert advice and upfront financing with the balance paid off by future bill payments.

The filing includes two new initiatives, a smart thermostat program for homeowners that will offer a $150 discount for Internet-connected thermostats with a low monthly repayment. There also will be a pilot component to evaluate installation of thermostats for multifamily and lower-income customers. The utility proposes to invest $11.5 million in the program.

The other new initiative is a residential home-energy reporting program, which will use a variety of residential energy consumption data to identify savings opportunities and to lower energy bills. PSE&G proposes to invest $2.5 million in the program.

The utility also has plans to spend $21.3 million in various administrative expenses and IT enhancements to analyze data from the programs. Division of Rate Counsel Stefanie Brand, who has yet to review the filing in detail, called the cost “very high.’’

Brand was more positive about the pilot for smart thermostats. “They are a lot cheaper than smart meters and provide many of the same kind of savings for customers,’’ she said.

The utility is clearly intent on ramping up its spending on energy efficiency as executives at an annual investors’ conference in New York yesterday said they hoped to invest $250 million in energy efficiency and renewable energy over the next five years.