State Starts to Put Some Muscle Behind Push for Energy Efficiency

BPU straw poll proposes a framework for how utilities can help customers cut back electricity and gas use, slowing climate change
Energy-efficiency toolsCredit: Chau Doan/UNIDO
Tools to help determine energy efficiency of consumer homes.

The state is proposing a framework for how New Jersey can significantly cut electric and gas use, among the easiest and least expensive ways to achieve its aggressive goals to fight climate change.

In a straw proposal from the New Jersey Board of Public Utilities, the agency aims to explain how it will try to implement a 2018 law that mandates utilities curb customer electric usage by 2% a year and gas use by 0.75%.

The proposal seems to recognize long-standing criticisms that the state’s efforts to promote reduced energy use have fallen behind its neighbors by acknowledging it needs to enhance programs to achieve those targets, as well as the Murphy administration’s goal of 100% clean energy by 2050.

Easing back on peak loads

Besides increasing energy efficiency in New Jersey, the proposal also is designed to reduce peak energy loads, a factor that drives up costs to consumers and businesses; strengthen building and energy codes and appliance standards; and transition existing buildings to electricity from propane- and oil-fueled systems.

Much of that effort is geared to reducing fossil fuel use in New Jersey, a way to make progress with the Global Warming Response Act, which wants to decrease greenhouse-gas emissions by 80% below 2006 levels by midcentury.

In the energy efficiency plan, the BPU staff lays out what roles the state’s seven utilities and its own Office of Clean Energy will play in trying to achieve those goals. In general, it proposes the staff take the lead in delivering statewide policy programs, particularly those involving governmental entities.

It also offers ways utilities can help achieve the goals, based on the staff’s assumption that utilities are best suited to deliver certain energy efficiency and peak reduction programs due to current customer relationships.

Keeping a close eye on the utilities

“Given the Clean Energy Act, it is going to be hard to deny utilities to have a more active role in energy efficiency,” said Steve Goldenberg, an energy lawyers who has often clashed with electric utilities in the past. “You just have to be careful of what you give them.’’

Goldenberg, however, described the staff’s proposal as a “thoughtful and high-level analysis’’ regarding the future of the state’s energy efficiency programs.

The proposal did not address some major issues facing the development of the energy efficiency program, which will be the focus of other proceedings now being pursued by the board,

For instance, the plan did not focus on how utilities might recover revenue they lose by promoting aggressive energy reduction programs. The mechanism, sometimes dubbed “decoupling,” allows utilities to recover lost revenue if they can demonstrate energy-saving measures can save customers money.

Such mechanisms are in place in many states, especially in areas where significant energy savings are occurring. The agency is holding a hearing this Thursday on how to frame a cost-recovery mechanism, perhaps the most controversial step in New Jersey’s efforts to promote an effective program to curb energy use.

In addition, the state faces a big fight in developing a program to create incentives and penalties for utilities that fail to achieve the required energy-use reductions. That, too, is the subject of another proceeding before the BPU.