State Takes First, Tentative Steps Toward Energy Efficiency Standard

Revamped nuclear subsidy bill includes mandate for utilities to curb amount of energy customers use

energy efficiency
The state is getting more serious about conserving how much gas and electricity its residents and businesses use.

Tucked into a complex and controversial bill (S-877) that would ask ratepayers to subsidize nuclear power in New Jersey is a new mandate that utilities begin reducing energy use by their customers.

It is not quite an energy-efficiency portfolio standard — a goal long sought by clean-energy advocates but never adopted by state regulators. The provisions also fall short of targeting the amount of reductions achieved by neighboring states in energy efficiency, according to clean-energy advocates.

Lumped into legislation that also includes new requirements to expand the state’s reliance on solar power, not to mention a nuclear subsidy that could cost up to $300 million a year, it has left some questioning what is the rush in hammering out a radically new energy future for New Jersey.

Information overload?

“It’s a lot to look at in a very short period of time,’’ said Stefanie Brand, director of the New Jersey Division of Rate Counsel, who opposed the bill when it only involved subsidies for three nuclear units owned by Public Service Enterprise Group. Although supportive of energy efficiency and solar, Brand argued the state should not rush to decide all these policies at once.

Other clean-energy advocates were more adamant.

“This is supposed to mollify the clean-energy community, but it is an insult,’’ said Doug O’Malley, director of Environment New Jersey. “This is not a plan to get us to 100 percent clean energy by 2050.’’ The latter is the cornerstone of Murphy’s clean-energy platform.

Missing targets

In general, critics of the bill say it does not offer specific targets for achieving some of the goals in Murphy’s clean-energy agenda — like embracing his call to set an ambitious renewable-energy portfolio standard for offshore wind.

“There are key building blocks in there, like energy efficiency, solar, and offshore wind, but the details are missing,’’ said Tom Gilbert, campaign director for ReThink Energy NJ and the New Jersey Conservation Foundation.

The energy efficiency provisions were a late addition to the nuclear subsidy bill, added last Thursday a couple hours before the bill was referenced to a Senate committee without a vote. It is scheduled to be acted on by the Senate Budget Committee Monday.

The provisions essentially change language in the nearly two-decade old energy deregulation law from stipulating the state Board of Public Utilities “may’’ adopt an energy-efficiency portfolio standard to “shall’’ require utilities achieve a 1.5 percent annual reduction in gas and electric use from 2017 levels.

“It does not go far enough,’’ said Dennis Wilson, an energy entrepreneur who has been working in energy efficiency for the past dozen years. “It should be 2 percent.’’

Gilbert agreed. “It does not set the bar high enough,’’ noting other states in the Northeast have achieved 2 percent energy-efficiency savings. “It’s got to be done right.’’

Like others, Wilson questioned why the nuclear bill is being rushed through in the early days of the new legislative session. PSEG says the plants could become unprofitable within two years and has warned it could close them without financial incentives.

PSEG is “very supportive’’ of Gov. Murphy’s clean-energy agenda, particularly his emphasis on investments in energy efficiency, said Michael Jennings, a spokesman for the company. PSEG has invested about $400 million in energy efficiency, he said.

“We are largely supportive of the energy-efficiency standard in the proposed legislation and believe that if done in the right way, establishing targets to drive deep energy savings will be of great benefit to our customers, New Jersey’s economy, and the environment,’’ Jennings said.

But Wilson argued the language in the bill fails to include a provision to decouple distribution revenue from sales volume, a step that would encourage utilities to invest in energy-efficiency projects. “Energy efficiency cannot be maximized without decoupling put in place,’’ he said.

In a separate matter, Public Service Electric & Gas is seeking a decoupling provision in a base-rate case it has filed with the New Jersey Board of Public Utilities. That case has yet to be heard by the agency.