NJ’s Two Biggest Utilities Finish Near Bottom on New Energy-Efficiency Scorecard

Tom Johnson | February 24, 2020 | Energy & Environment
PSE&G and Jersey Central Power & Light wind up in bottom 10 on ACEEE scorecard
Credit: Daniel Reche via Pixels
Energy efficiency?

The nation’s 52 largest electric utilities have dramatically increased energy savings, a trend, in part, driven by a push to curb greenhouse-gas emissions, according to a new scorecard by the American Council for an Energy-Efficient Economy.

But New Jersey’s two biggest electric utilities lagged far behind many of their peers, finishing in the bottom 10 based on metrics used by the ACEEE. Public Service Electric & Gas, the state’s largest utility with roughly 2 million customers, ranked 42nd while Jersey Central Power & Light finished 48th.

The scorecard comes at a time of rapid transformation in the utility sector, changes impelled by warnings from scientists that time is running out to avert the worst impacts of climate change and needs to dramatically reduce use of fossil fuels.

In New Jersey, the Murphy administration is aggressively seeking to shift how energy is used, moving to cleaner renewable sources of energy and forcing utilities to reduce how much electricity and gas they use. At the same time, the state is looking to curb greenhouse-gas emissions by 80 percent below 2006 levels by midcentury.

Tracking power trends

The ACEEE scorecard found that as a group the utilities boosted their annual energy savings by 20 percent since 2015, almost enough electricity to power 1.8 million homes. Two notable trends: utilities are increasing efficiency investments in low-income communities (on average) and speeding the adoption of electric plug-in vehicles.

New Jersey is moving to adopt some of those strategies, including a comprehensive program to build out the infrastructure for electric vehicles, but state regulators have failed to act on proposals from utilities to play a part in that venture.

The state Board of Public Utilities also is hoping to propose rules that would require electric utilities to reduce customer energy use by 2% a year by this spring, under a law signed by Gov. Phil Murphy in 2018.

Explaining NJ’s lackluster finish

To utilities and many environmentalists, the main reason New Jersey lags behind in energy efficiency is it has no mechanism to compensate utilities for the lost revenue when they spur customers to use less gas or electricity.

According to Steve Nadel, ACEEE’s executive director, states that scored the highest were ones that have established energy-efficiency resource standards. They also offer financial opportunities for utilities to maintain and increase revenues while increasing energy efficiency. That remains a big hurdle in in New Jersey, where no consensus has been reached about what a new energy-efficiency program will entail.

PSE&G alluded to that issue in responding to the ACEEE scorecard.  “The ranking reflects New Jersey’s current approach to energy efficiency,’’ said Michael Jennings, a spokesman for the utility. It has been by far the most aggressive utility in funding investments in energy efficiency.

The utility has filed a $2.8 billion energy-efficiency proposal with the BPU, which has put off acting on it until it adopts new regulations for the program mandated by the 2018 Clean Energy Act. Instead, last week it approved a six-month extension that will allow PSE&G to spend $130 million on five of its existing energy-efficiency programs.

PSE&G said it is participating in the current stakeholder effort to develop new regulations; Jennings said the utility hopes to integrate the best practices cited by ACEEE for reducing customer energy usage. “If that occurs, the rankings of New Jersey utilities should improve,’’ he said.

But David Pringle, a consultant for Clean Water Action, questioned why PSE&G is always trying to shift costs on to ratepayers. “Why doesn’t PSE&G do these projects on their own and have their shareholders pay for it?’’ he asked.

JCP&L echoed sentiments similar to PSE&G’s. “We look forward to implementing additional energy-efficiency programs and assisting the state and the Murphy administration in achieving their energy-saving goals,’’ said Cliff Cole, a spokesman with the utility.