No Fast Enactment by NJ of Measures on Energy Efficiency

Analysis that was expected to underpin state’s implementation of clean-energy law now to be examined by BPU advisory group

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The state plans to take another deep dive into a consultant’s analysis of how New Jersey should go about mandating how gas and electric utilities curb energy use by customers before it arrives at any decisions.

In accepting a study by Optimal Energy, the New Jersey Board of Public Utilities repeatedly noted that the findings and recommendations in the study are “preliminary’’ and do not bind the state to any new policies.

“We are not endorsing the findings, just accepting it as complete,’’ said BPU president Joseph Fiordaliso.

The analysis was expected to establish a framework to implement a year-old clean-energy law that requires utilities to reduce electric use by 2 percent annually and gas use by 0.75 percent per year. The study, made public only earlier this month, drew criticism from utilities over its lack of detail.

Overall, the analysis concluded the energy efficiency goals advanced by the law are achievable, and, if so, save customers $14 billion over the next decade — a finding endorsed by environmental groups which said it could help the state achieve its climate goals, including having 50 percent clean energy by 2030.

Frustrated by inaction

Clean-energy advocates have long been frustrated by New Jersey’s failure to curb energy use, which is widely viewed as the most cost-effective way to combat climate change and improve air quality.

“New Jersey has had over 20 years to develop an energy efficiency program and yet we are still going around in circles,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “Energy efficiency is the lowest hanging fruit. It should be the easiest thing to do.’’

In discussions among commissioners yesterday at the BPU’s bi-monthly meeting, many details about how to do so remain to be worked out. To help achieve that goal, the board approved setting up an advisory group to help develop recommendations for how to implement the law.

BPU Commissioner Upendra Chivukula described the analysis as a first step. “There is a lot of work that needs to be done,’’ he added. Fellow Commissioner Dianne Solomon agreed, saying there are concerns about aspects of the study as well as about some of its recommendations.

For the most part, utilities were unhappy the analysis neglected to identify who would administer the energy-savings programs given that gas and electric companies would be required to meet the targets set by the state and subject to penalties if they failed to meet them.

Critical issues unresolved

Other critical issues also are unresolved. For instance, the analysis fails to discuss how utilities would be able to recover losses in revenue suffered when customers reduce gas and electric use. Most of the states achieving the biggest energy savings around the country have mechanisms aimed at recouping those losses, eliminating a major disincentive for utilities to invest in such programs.

Another unanswered question is whether the state should establish energy-savings programs for specific utilities, taking into consideration their unique demographics, population density, and energy loads.

All these issues are likely to be debated by an advisory group to be appointed by Fiordaliso with input from his fellow commissioners. They are likely to come back with recommendations for the board’s staff by the end of the year.

“We are pleased to see it [the creation of the advisory group] move forward,’’ said Mary Barber, New Jersey director of clean energy for the Environmental Defense Fund. “We are hopeful it will be fully representative of the interests of the sector.’’

Others were more pessimistic. “Clearly, the BPU is hearing from the stakeholders ‘we must have more time,’’’ said Doug O’Malley, director of Environment New Jersey. “At some point, we need to implement the law.’’