Potential Identified for Big Energy Efficiencies in NJ

Analysis suggests 20 percent cut in electricity use and 11 percent cut in gas use possible, with achievable savings of $14 billion

energy efficiency
New Jersey has the possibility of cutting its electricity use by 20 percent and its gas use by 11 percent by the end of the next decade, according to a new draft analysis of the state’s energy efficiency potential.

The study by Optimal Energy, an analysis expected to form the basic outline of a more comprehensive statewide policy for reducing energy use, found a portfolio of new energy efficiency programs could produce a net benefit savings of $14 billion.

The Murphy administration has identified slashing energy consumption in New Jersey as a key component of its overall goal of transforming the state to 100-percent clean energy by 2050. A law Gov. Phil Murphy signed a year ago mandates the state’s electric utilities to reduce use by customers by 2 percent a year, and gas customers by 0.75 percent annually.

Energy efficiency is widely viewed as the most cost-effective way to clean the air and combat climate change while at the same time saving consumers and businesses money — no small benefit in a state with some of the highest energy costs in the nation.

“There’s nothing cheaper than energy that you don’t use,’’ said Fred DeSanti, a lobbyist who represents solar developers. “Clearly spending money not to use energy is the first thing we have to do.’’

We could watch the savings grow

For every dollar invested in energy efficiency, the state would gain $2.57, according to the analysis by Optimal Energy, a Vermont-based consultant retained by the Board of Public Utilities. It estimated the total cost of implementing the programs at $8.9 billion, not all incurred by ratepayers. Net benefits would amount to $13.9 billion, after costs, the analysis said.

The 91-page draft looked at thousands of energy efficiency measures for both electricity and gas in the residential, and commercial and industrial sectors, ranging from retrofits of major equipment, like furnaces and boilers, to installation of smart thermostats, to more efficient lighting fixtures, such as LEDs (light emitting diodes).

“It sets pretty ambitious targets for the state,’’ said Eric Miller, policy counsel for the Keystone Energy Alliance, who said the goals would make New Jersey a leader once again in energy efficiency. In the most recent ranking by the American Council for an Energy Efficient Economy, New Jersey ranked 29th in overall energy-efficiency savings.

The projected $14 billion in savings by achieving the study’s targets are realistic, according to Miller. “In Pennsylvania, we are in year ten of our program and we’ve achieved $8 billion in savings,’’ he said, with less ambitious goals.

“It seems like a road map on how to ramp up New Jersey’s energy efficiency programs in a big way,’’ agreed Doug O’Malley, director of Environment New Jersey. The analysis shows the importance of maximizing investments from the state’s clean-energy program into programs to reduce energy use, he added.

Way too modest

But Dennis Wilson, CEO of Sunowner, a renewable energy and energy efficiency firm, called the initial five years of energy reductions only a modest ramp-up, especially given what didn’t happen during the eight-year term of former Gov. Chris Christie.

Dennis Wilson, CEO of Sunowner, Inc
The draft does not reflect the large amount of “low hanging energy efficiency’’ potential that could be quickly achieved, Wilson said. Nor does it discuss or propose the need for natural gas utilities to achieve larger carbon reduction by permanently reducing fossil-fuel uses in homes for hot water and heating, he said.

How the seven gas and electric utilities in the state go about achieving those goals is still largely undetermined, and at what cost. Public Service Electric & Gas, by far the state’s biggest utility, is currently in the midst of a $2.8 billion energy efficiency case before the BPU.

Its proposal, involving 22 programs targeting most of its customer segments including low-income households, has won praise from environmental groups and business segments, but it’s opposed by the state Division of Rate Counsel. Among other things, that office said the filing is premature because the BPU has yet to adopt regulations for the energy-efficiency programs.